LOS ANGELES — The Dodgers are at it again – not only spending big money but spending it creatively.
A year after Shohei Ohtani’s willingness to defer $680 million of his $700 million contract fueled a $1 billion binge of signings by the Dodgers, the reverberations are still being felt. The Dodgers have agreed to sign two-time Cy Young award winner Blake Snell to a five-year, $182 million contract as a free agent that is also constructed creatively.
Snell’s contract includes a $52 million signing bonus and, yes, a large chunk of deferred money, reportedly around $65 million ($13 million per year over the five years). The creative combination drops the average annual value of the contract to approximately $34 million – helping the Dodgers lower their annual payroll adjusted for Competitive Balance Tax purposes – but keeps the present-day value of the contract higher and minimizes Snell’s tax hit with the signing bonus.
The contract also reportedly does not include a no-trade clause or any opt-outs, but Snell is guaranteed a $5 million bonus if the Dodgers do trade him.
With Snell’s deal, the Dodgers have now deferred almost $1 billion in salaries:
• $680 million of Ohtani’s $700 million contract
• $115 million of Mookie Betts’ $365 million contract
• $65 million of Snell’s deal
• $57 million of Freddie Freeman’s $162 million contract
• $50 million of Will Smith’s $140 million extension signed last March
• $8.5 million of Teoscar Hernandez’s $23.5 million 2024 salary
It is unclear when Snell’s deferred money will be paid out. Currently, the Dodgers will start paying Freeman’s deferred money in 2028, Hernandez’s in 2030, Betts’ in 2033, Ohtani and Smith in 2034. The Dodgers’ deferred commitments to those five players will peak in 2034 and 2035 at $89.85 million each year.
No other team has used the deferred salary technique as aggressively as the Dodgers have in the past few years, and the situation could be up for discussion (and potentially adjustment) when MLB’s Collective Bargaining Agreement with the players’ union expires following the 2026 season.
But the Dodgers benefited from a massive increase in revenue with the addition of Ohtani in 2024 ($100 million or more by some estimates) and are clearly willing to re-invest it in the team.