This is part two of a five-part series detailing the most under-covered stories of 2016.
#8: The Nationals are in Trouble
They won’t be in trouble this upcoming year. Perhaps not even the year after or the year after that. But the trouble is coming.
The Nationals had perhaps the most successful season of the young franchise’s history in 2016, and even though they lost in the NLDS, they went out with a bang by dealing a slew of prospects for White Sox CF Adam Eaton. This team is poised, much to my chagrin, to win the NL East again in 2017 (the Mets will definitely challenge them, provided their pitchers stay healthy) and the team is in a very good spot for the future, having locked up aces Stephen Strasburg and Max Scherzer to long-term deals. They also have league wide top-10 prospect Victor Robles waiting in the wings in addition to lesser-known but still solid prospects such as Erick Fedde, Pedro Severino, and Austin Voth to complement him. In short, the Nationals, talent-wise, are in a solid spot to compete very seriously for the time being, and will likely finish near the top of the National League each of the next few years.
What about that is troubling, you ask? In terms of players, the Nats are set for the foreseeable future. However, due to the structure of some of the extensions and free-agent deals they have signed, the team will be financially handicapped in some regard in every season from 2022-2030.
Why is nobody talking about this? Probably because we’re thinking half a decade down the road. But let me just run down their situation quickly: Max Scherzer is due $15MM each season from 2022-2028 (Spotrac). That seems like a bargain until you realize that his contract ends in 2021. Stephen Strasburg is also due deferred money: $10MM each year from 2024-2030 (Spotrac). His deal ends in 2023. By no means is $25MM a year from 2024-2028 the end of the world, and the $15MM or $10MM they are handicapped in the other years from 2022-2030 probably will not make a huge dent in their financials, but it’s noteworthy that the Nats elected to defer as much money as they have.
The structure of the Strasburg extension and Scherzer contract also reveals one of the main reasons Mets LF Yoenis Cespedes turned down the Nats’ $100MM offer last offseason (2015-2016 offseason): there was a lot of deferred money involved. This is apparently corroborated by Jon Heyman, who indicated that there were “heavy deferrals” in Cespedes’ contract payouts in the Nats deal; the full value of the deal was going to be paid out over 15 years, instead of just the five seasons he would be under contract.
Whether or not this financial roadblock even comes to fruition for the Nationals remains to be seen considering how far down the road all of this is, but I also haven’t discussed the fact that Scherzer and Strasburg (assuming Stras opts in to his contract in 2020) are due between $45MM and $60MM combined per season from 2019-2021. If nothing else, this will be an interesting situation to monitor going forward, and I figured it was worth mentioning, since no other reporter seems to have done so this season.
#7: The Dodgers are ACTUALLY in trouble
You’ve probably heard about this one already, but the extent of the Dodgers’ financial woes was unbeknownst to me until I did some research independent of the banner on my phone from ESPN.
A little bit of background: in 2012, a Magic Johnson-led ownership group bought the LA Dodgers. This seems to have helped them in a lot of respects. For example, their average attendance has risen from about 36,000 in 2011 (the year prior to new ownership) to around 45,000 in 2016. Obviously not all the credit can go to the ownership, but they deserve at least some of it. It also probably helps that the team has made the playoffs in four straight seasons, but I digress.
In late November, it was reported that the Dodgers may be forced to cut payroll in the upcoming seasons or face suspension of owners and/or mandatory approval by the Office of the Commissioner of expenditures. Considering that the team has had a payroll close to $300MM per season, nearly $100MM over the luxury tax, this should come as no surprise to anyone. The Dodgers’ ownership group has spent exorbitantly on players since taking over, with an estimated $1 Billion or more in contracts being doled out since the beginning of the 2012 season. This normally wouldn’t be a problem, except for the fact that the team is in immense amounts of debt (some sources estimate $1.5 Billion). And when teams get into debt, MLB takes over. Not a good situation for the fans, or the team, so it would be best if that did not end up happening.
With that being said, the news of the Dodgers’ debt came and went in late November of this year, and was largely forgotten about. Because of the news, I was not expecting them to pursue any free-agents heavily, but here we are one month later, and both RP Kenley Jansen and 3B Justin Turner have new multi-year deals worth over $60MM ($80MM/5 years for Jansen, $64MM/4 for Turner).
I can’t pretend to know the inner workings of the Dodgers’ organization in and out, but this does not exactly look to be heading down a path of cutting costs and saving money to lower their debt. MLB apparently mandates that teams in massive amounts of debt submit a plan detailing how they will right the ship in the coming years. This is not that path.
(Image Credit: Andy Holzman)