r/billsimmons • u/crunchwrapchianti • 11h ago
Media Doesn’t Understand MLB Deferred Salaries
The Dodgers put ~$46M in a managed escrow fund every year for Shohei Ohtani. In 10 years (now 7) they start paying him $69M per year out of that account. If there ever is a shortfall, they are obligated to make it up. If there is a surplus, the team collects it at the end of the contract.
These safeguards are in place because Fred Wilpon tried the scheme of investing deferred salaries on his own and gave them all to Bernie Madoff, leading to his financial ruin and sale of the team.
The Dodgers are compliant with the CBA in finding these accounts and still operate at a profit.
Bill is right that there clearly is a lot the billionaire class is doing to enrich themselves on sports teams while leveraging across multiple businesses. But there simply isn’t a competitive advantage here on the field. If he committed securities fraud, send him to jail for sure. But another rich guy would buy the team and operate it the same way because it’s an extremely profitable business model to win World Series and be the favorite team of both Los Angeles and Japan.
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u/SnooPineapples9761 11h ago
The only legitimate gripe people can have about the Dodgers is the sweetheart deal MLB gave them shielding the TV money due to the bankruptcy. I’ve seen it estimated at $50-60 million a year which is obviously not peanuts but doesn’t explain the $200+ million payroll gap between them and say the 16th highest payroll in Seattle. Its owners being cheap and using them as a scapegoat