Last week, I wrote this article noting that a number of owners were “enraged” about the Dodgers signing Kyle Tucker and that some owners were going to push for a salary cap “no matter what.”
The Dodgers are doing a pretty good job of playing MLB’s villain team, the equivalent to the “Evil Empire” the Yankees were back in the 1990s and early 2000s.
Now comes a report written by Drew Lerner of Awful Announcing, citing ESPN’s Joon Lee, who says the Dodgers have been getting favorable revenue-sharing treatment for their TV revenue — and that this break for the Dodgers will continue for another 13 years. Here are the details:
In a recent report, Lee outlined how the Dodgers have historically benefited from the revenue-sharing system as a result of the club’s bankruptcy and subsequent sale in 2012. Lee reports that teams typically share about one-third of their local television revenue, but the Dodgers, in the midst of their bankruptcy proceedings in federal court, secured a much more favorable rate of about 10%.
Given the Dodgers have by far the most lucrative local broadcast deal in MLB (a ludicrous $334 million per year), Lee estimates the team could avoid contributing about $66 million per year to the league’s revenue-sharing pool under its special arrangement. That, of course, doesn’t sit well with fans of other clubs, who in recent years have seen the Dodgers buy their way to one of the most stacked rosters in the history of the game.
Previously, it was unknown exactly how long the Dodgers would retain these favorable terms. But Lee revealed in his report, citing a league source, that the agreement goes through 2039, when the Dodgers’ current local broadcast deal expires. In other words, the team’s built-in advantages could benefit them for another 13 years.
You can watch Lee’s full report at the link in that quote, or a summary of it here.
This was done, as noted, because the Dodgers declared bankruptcy during the Frank McCourt ownership era, which ended more than 13 years ago. New ownership took advantage of that, as well as the revenue coming in under their huge Charter Communications RSN deal, to become the most dominant team in the league. L.A. has won the NL West in 12 of the last 13 seasons, missing out only in 2021 when the Giants had that freak 107-win year and the Dodgers won “only” 106, which is tied (with 2019) for the second-most wins in Dodgers franchise history. They’ve played in five World Series in those 13 years, winning three (and probably would have made that four if not for the Astros cheating scandal in 2017).
From the Awful Announcing article, here’s how much the Dodgers have their proverbial thumbs on the scale:
Charter Communications, the telecom giant that owns Spectrum SportsNet LA, the television home of the Dodgers, would reportedly have to declare bankruptcy to wiggle its way out of the $334 million-per-year deal. That’s not something Charter, whose main business is providing broadband service to tens of millions of customers nationwide, necessarily wants to do.
So while other clubs are accepting cuts to local broadcast revenue as cord-cutting threatens regional sports networks, the Dodgers are sitting pretty. And it makes the team’s favorable arrangement look even more absurd to the average fan.
Whether the Dodgers will be able to maintain this arrangement with Charter until 2039 remains to be seen. The league may have an opportunity to rewrite some of its revenue-sharing procedures once the current collective bargaining agreement expires after this season.
But for now, the optics do not look great. The Dodgers aren’t paying their fair share and are able to buy whatever players they want.
The conclusion is absolutely correct, in my view. The Dodgers are getting a break that might have been reasonable 13 years ago, but it certainly isn’t now. As noted, this will almost certainly be something that’s brought up in the CBA negotiations coming up later this year.
One thing is certain. There’s not a level playing field in MLB. There should be, in my view, so that the teams that win most aren’t just the teams with the most money — they should be the teams with the best baseball management. If a salary cap, along with a floor and a guaranteed portion of MLB revenue to players, is how to accomplish that — then bring it on.
