The Dodgers broke baseball. Or at least that’s what everyone is saying. Ohtani. Betts. Freeman. Yamamoto. Skubal. The list goes on and on. With a payroll of $430 million, the Dodgers will spend more than double the median MLB team ($206 million) on player salaries this year. And if that wasn’t crazy enough, now that the trade deadline has passed, the Dodgers will officially spend more money on luxury tax payments than a dozen teams will spend on their entire payroll.
Some people will inevitably say the Dodgers are just a well-run organization with committed owners. They draft well, have invested heavily in analytics, and the ownership group isn’t afraid to write big checks for star players. But that’s not why the Dodgers are able to spend so much more money than everyone else.
The massive salary cap spending in Los Angeles has nothing to do with the draft, analytics, or even Shohei Ohtani’s marketing value. Instead, the Dodgers are able to consistently outspend everyone because of a unique deal the team signed more than a decade ago and a loophole in MLB’s rules that they intelligently exploit.
Let me explain.
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