Los Angeles Dodgers have no plan to stop spending so much

The Dodgers hear the noise.

About how their $400 million payroll is bad for baseball. About the financial and competitive disparities that their spending is exposing. About how they’re pushing the salary cap-less sport to an existential crisis.

It’s just that, after back-to-back World Series championships and more splashy acquisitions this offseason, team officials have essentially just shrugged at the conversation.

And, barring a significant change to the league’s economic structure in the next CBA, they certainly have no plans to alter their approach anytime soon.

“The expectation always has been, and should continue to be, that we expect to contend every year,” team president Stan Kasten reiterated in a recent interview with the California Post. “We’re the DODGERS. All caps. It’s the kind of franchise we are. Historically, it’s what our fans expect and what they deserve. And we will always be trying to deliver that.”

Indeed, from the Dodgers’ point of view, the club has been blessed with opportunity. They have big-market revenue streams, the most lucrative local TV in baseball, and most importantly a one-of-a-kind partnership with two-way star Shohei Ohtani –– enabling a level of spending the sport has never before seen.

“We are in a really strong position right now, financially,” president of baseball operations Andrew Friedman said at last month’s Winter Meetings. “And our ownership group has been incredibly supportive of pouring that back into our team and that partnership with our fans.”

In Los Angeles, it’s the kind of aggressive approach Dodgers fans have long been waiting to see.

Ever since the team’s Mark Walter-led Guggenheim ownership group dragged the franchise out of the dark (and bankruptcy-riddled) days of Frank McCourt’s chaotic stewardship, the Dodgers had been primed to go on this sort of spending spree. 

They’ve long been near the top of MLB in attendance and revenue. They’ve always been an attractive destination for big-name players. And they’re now more than a decade into the 25-year, $8.35 billion television contract* they signed with Charter Communications (Time Warner Cable at the time of the deal) that set the industry standard for local broadcast deals.

*An aside on that television deal: While there has been much recent speculation about a supposed “secret deal” the team and league had when the contract was first struck, which would’ve limited how much of the Dodgers’ TV money would be subject to the league’s revenue-sharing system, the reality is more complicated.

That initial agreement, which MLB made with McCourt during the club’s 2011 bankruptcy, was later modified to make the Dodgers’ new owners commit up to $1 billion more in revenue-sharing over the life of the deal, as the New York Post reported in 2013.

The real advantage now is the stability the contract has provided the team amid an era of cable cord-cutting that has upended much of the industry. As Sports Business Journal detailed in 2023: “Charter will pay the Dodgers’ rights fee in full, regardless of how many subscribers it loses with SportsNet LA.”

Despite that, the Dodgers operated with a level of fiscal constraint for much of their early years under Guggenheim and Friedman. They twice ducked under the luxury tax in 2018 and 2019. Before the Mookie Betts trade and $365 million extension in 2020, it’d been a half-decade since their last $100 million player acquisition.

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The real change over the last several years has had all to do with Ohtani –– and his decision to insist on deferring all but $2 million per year in his record-breaking $700 million signing.

That unprecedented contract structure supercharged the Dodgers’ economic capabilities. Sportico estimated the team’s revenue jumped by more than $200 million during Ohtani’s first season in 2024, making the Dodgers the first MLB franchise to eclipse the $1 billion revenue threshold. The club’s sponsorship business alone is now believed to make as much money as roughly half of the league’s other 30 teams do overall.

As a result, the Dodgers were able to do exactly what Ohtani had hoped when he signed: Add layers upon layers of star talent around him –– from Yoshinobu Yamamoto, Tyler Glasnow and Blake Snell, to this winter’s signings of Kyle Tucker and Edwin Díaz –– and build the closest thing modern-day baseball has seen to a super team.

And now, the team finds itself in an almost self-fulfilling financial cycle that does’t seem likely to end: Invest in a World Series-caliber roster, with the belief it will only make revenues stronger, which in turn will allow for more payroll spending and star-studded teams.

“The strength of our marketplace provides us with tools that not every market has,” Kasten said. “That’s well known. We’ve never shied away from it. In fact, we’ve done the opposite. We said, ‘We have a market that will produce for us and reward us if we do our job and do things correctly.’ … And that has been what has kept us going.”

All the outside noise be damned.