The Dodgers are at it again.
The reigning World Series champions signed two-time Cy Young winner Blake Snell to a five-year, $182 million contract.
Like their blockbuster free agency deal with Shohei Ohtani last winter, Snell’s contract includes deferred money – $60 million, to be exact, nearly one-third of the entire pact.
The Snell contract brings the franchise’s deferred compensation ledger to nearly $1 billion – $962 million – far outpacing the rest of the league and infuriating fans of the 29 other teams.
Ohtani is deferring $680 million of his record-breaking $700 million contract.
In 2020, Mookie Betts signed a 12-year, $365 million deal with the Dodgers that included $115 million in deferrals.
Freddie Freeman and Will Smith are owed more than $100 million combined in deferred compensation.
Even Teoscar Hernandez, who signed a one-year, $23.5 million with Los Angeles last offseason, will be paid $8.5 million between 2030 and 2039.
And there’s still plenty of offseason for the Dodgers, who are said to be in on free agent Juan Soto, to add to those numbers.
Salary deferrals have been allowed under MLB’s collective bargaining agreement for decades – think Bobby Bonilla, who, starting in 2011, began getting $1.2 million a year from the Mets through 2035.
Other teams currently take advantage of the loophole as well.
The Mets, for example, will be on the hook for $76.5 million from 2032 through 2042 for the contracts of Francisco Lindor and Edwin Diaz, according to spotrac.com.
Red Sox star Rafael Devers will get $75 million in deferrals from 2034 to 2043 as part of his 10-year, $313.5 million deal.
But few teams have taken it to the level of the Dodgers, who not only won the World Series less than a month ago, but have also made the playoffs in each of the past 12 seasons while running one of the highest payrolls in the sport.
The deferrals allow teams to avoid luxury tax thresholds, leaving room for juggernauts like the Dodgers to continue to bring in talent while avoiding tax penalties.
The players get something out of it too – Ohtani could potentially evade $90 million in California taxes on his monster deal if he were to move outside the state once his deferrals kick in, prompting one Golden State lawmaker to call on Congress to close the loophole.
“It is disturbing that Shohei Ohtani and other individuals can perform a hidden ball trick using an obscure tax loophole to avoid paying hundreds of millions of dollars and it’s a concerning precedent,” state senator Josh Becker wrote in April. “The current system exacerbates the unequal distribution of taxes and creates an unbalanced tax structure and further perpetuates income inequality. SJR 14 calls on Congress to make wealthy individuals pay a fairer and more equitable share of taxes like the rest of us.”
As unjust as it seems, contract deferrals will be a part of baseball through at least December 2026 when the current CBA expires.
