Dollars & Sense

It was quite an (un)eventful off-season for the Boys in Blue. When the Diamondbacks swooped in and paid Zach Greinke 6/$206.5M, Andrew Friedman and company took a ton of flak. An oft-held belief is that the Dodgers have unlimited money, and that not signing Greinke was simply a bad business decision. Unfortunately for those not in the know, the facts don’t bear that out.

The Dodgers reported to Spring Training ready to defend their NL West crown. However, from nearly the first day of camp, the news out of Camelback Ranch could not have been worse. With the pre-season winding down and the Dodgers getting ready to head West, here is a list of their walking/limping/crutching wounded:

  • Brett Anderson (back)
  • Mike Bolsinger (ribs)
  • Andre Ethier (shin)
  • Yimi Garcia (knee)
  • Yasmani Grandal (forearm)
  • Alex Guerrero (knee)
  • Kike Hernandez (rib cage)
  • Howie Kendrick (calf)
  • Brandon McCarthy (elbow)
  • Yasiel Puig (hamstring)
  • Hyun-Jin Ryu (shoulder)
  • Corey Seager (knee)
  • Alex Wood (forearm)

And with each injury, the chattering class kept dredging up the Greinke deal. It is the naysayers belief that if the Dodgers had just opened the vault and paid Greinke what he wanted (and given him that risky sixth year), all these ailments would be healed; all these problems would be solved. There is a fair argument, however, that just the opposite is true.

The Dodgers’ payroll has exceeded the Luxury Tax threshold each of the past three seasons; and it is expected to do so again this year. Four or more seasons results in a 50% penalty. So, regardless of the number of years they gave Greinke, the Dodgers would be paying 150% of his salary in actual dollars. Or, said differently, at $34.6M/year, Greinke would have cost the Dodgers more than $50M. Is Zach Greinke worth $50M/year?

It bears repeating, but the Dodgers don’t have unlimited funds. Guggenheim Partners didn’t become a billion dollar company by being profligate or stupid. They are asset managers; they know how to manage assets.

So, rather than effectively spending $50M for one pitcher, Friedman and Farhan Zaidi decided to allocate those resources in a manner that provided depth — the type they know they would need if they wanted another chance at the Fall Classic.

Well, how’d they do? Here is a list of the Dodgers’ off-season deals:

  • Brett Anderson (1/$15.8M per a Qualifying Offer)
  • Scott Kazmir (3/$48M; but only $11M for 2016)
  • Kenley Jansen (1/$10.65M)
    Chase Utley (1/$7M)
  • Justin Turner (1/$5.1M)
  • Howie Kendrick (2/$20M; but only $5M for 2016)
  • A.J. Ellis (1/$4.5M)
  • Joe Blanton (1/$4M)
  • Kenta Maeda (8/$25M)
  • Yasmani Grandal (1/$2.8M)
  • Brandon Beachy (1/$1.5M)
  • Luis Avilan (1/$1.39M)
  • Scott Van Slyke (1/$1.225M; arbitration eligible)
  • Chris Hatcher (1/$1.065M; arbitration eligible)
  • Yasiel Sierra (6/$30M; but only $1M for 2016)
  • Louis Coleman (1/$750K)
  • Jamey Wright (Minor League contract)

The Dodgers signed 17 players (including 11 pitchers) for a total of $76.78M of 2016 dollars. Strangely (smartly?), the total value of all of the contracts the Dodgers gave out for those 11 pitchers is roughly the same as the actual value of Greinke’s deal. (As an aside, the well-informed might wonder about the defunct Hisashi Iwakuma deal, but it is fair to think that the Dodgers would not have signed Kazmir had they completed that deal; so that is essentially a financial wash.)

For the same $76M, the Dodgers could have re-signed Greinke and the position players listed above, and hoped for the best on the hill. Or, they could have invested in their depth and their future, and put themselves in a position to win this year, next year, and in 2018 — the last season before the Best Pitcher on Earth can opt out of his contract.

So, contrary to what Dylan Hernandez wrote in the Los Angeles Timesabout the Dodgers wasting the best years of Kershaw’s career, the Dodgers actually did exactly what Kershaw says they have done: “I can only speak for what’s happened since I’ve been here, and every single year I feel we’ve had the chance to win.”

Had the Dodgers signed Greinke in lieu of all of the players listed above, it would have been the first time they didn’t — at least strategically — give Kershaw a chance to win.

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