How Dodgers' $1 billion offseason impacts their 2024 payroll

In an otherwise tame MLB offseason, the Dodgers have spent more than $1 billion to upgrade their roster in numerous ways, including record-setting deals for Shohei Ohtani and Yoshinobu Yamamoto, as well as lucrative contracts for Tyler Glasnow and Teoscar Hernández. 

That has driven the team’s projected total payroll for next season up to $204,541,642, per Spotrac, while Baseball Prospectus estimates its total year-end payroll will exceed $301 million. 

For context, Spotrac indicates that the Dodgers’ 2023 active total payroll was a little more than $271 million, making their financial outlook for 2024 seem surprisingly manageable. A key to the Dodgers’ massive signings has been a groundbreaking use of “contract deferrals” which have pushed some of the biggest expenses well into the future.

“The time value of money stipulates that a dollar today is worth less than a dollar promised in 10 years,” as CBS Sports put it. “The Dodgers have leveraged that theory by including deferrals in most of their big contracts.”

Between Ohtani, Mookie Betts and Freddie Freeman, for instance, the Dodgers are deferring a total of more than $87 million per year and converting a total value of $1.23 billion into a “present-day” value of $892 million.

So, even after spending more than $1 billion this offseason in “today’s dollars,” the Dodgers’ projected 2024 payroll is still well below that of the New York Mets, for instance, who are on the hook for a $264,311,826 total projected payroll for 2024, per Spotrac. 

As a result, Los Angeles could certainly remain active this offseason and add to its spending spree. Numerous reports suggest they are still on the lookout to add starting pitching depth and to solve a glaring weakness at shortstop.

“The club still likely needs another starter, regardless of whether Clayton Kershaw returns,” The Athletic reported. “They could upgrade at shortstop if the right opportunity presents itself. Somehow, it looks like the activity will only continue from here.”

With a clear willingness to spend and an increasingly creative use of deferrals to offset that spending into manageable yearly payrolls, intervention from California’s state controller might be the only thing that can stop the Dodgers' offseason splurge.