November 28th, 2016 at 6:00 am 
by Ron Cervenka “I’ll buy you a diamond ring my friend, if it makes you feel all right.
I’ll get you anything my friend, if it makes you feel all right.
Cause I don’t care too much for money, for money can’t buy me love.”
(Paul McCartney and John Lennon)
* * * * * * * *
Dodger fans having difficulty trying to understand what the holdup has been in re-signing free agent third baseman Justin Turner and free agent closer Kenley Jansen may now have an answer … and they’re not going to like it.
After five full seasons of harsh criticism and ridicule from fans (and presumably owners) of the 29 other MLB teams about how much money the Dodgers have and are willing to spend for top-tier talent, the buck is apparently about to stop.
Unknown to many – if not most – the so-called “grace period” for the Dodgers to bring their over-the-top spending in line with rules set forth by Major League Baseball is over, meaning that the team must now comply with what is called “the debt service rule”.
“I think the Dodgers will be in a position that they can comply with our expectations in terms of the debt service rule, without any dramatic alteration in the kind of product they have been putting on the field,” MLB commissioner Rob Manfred said in a Sunday L.A. Times article by Dodgers beat reporter Bill Shaikin.
It’s probably safe to say that the “debt service rule” uncovered by LA Times reporter Bill Shaikin caught just about everyone by surprise. (Photo credit – TBS and Ron Cervenka)
That rule which, according to Shaikin, is designed to ensure that teams with seemingly unlimited resources meet their financial obligations and limits debt to no more than 12 times annual revenue, minus expenses. Shaikin notes that the Dodgers were not profitable in any of their first three full seasons under new ownership, co-owner Todd Boehly said last year. Boehly added that the team’s debt is believed to be in the hundreds of millions.
That being said, under new ownership and because of outstanding scouting and player development. the Dodger have amassed what many – including Baseball America – consider the best farm system in all of professional baseball. That’s the good news.
The bad news is that with the existing Collective Bargaining Agreement (CBA) expiring in three days, the new CBA will, in all likelihood, increase the current $189 million luxury-tax threshold. This could put the Dodgers in a position to reduce or eliminate their tax obligations prior to bidding on the expected and enormous free agent class of 2018-19, which would include guys like Bryce Harper, Manny Machado and some guy named Clayton Kershaw. (Do you see where this is going?). Not being able to spend on Turner and Jansen is one thing, but being unable to spend on Kershaw – even if they have the money to do so, might be prohibited under the debt service rule.
It is certainly hard to argue that Guggenheim Baseball Management Group hasn’t done an outstanding job in their efforts to win and win now coming off their fourth consecutive NL West Division title. But the cold, hard and painful truth is the the Dodgers are about to embark on their 29th consecutive season without a World Series trophy.
To add insult to injury, the Dodgers just increased season ticket prices as much as 27 percent pretty much across the board. And while you might think that these seemingly annual World Series-less price increases would deter existing season ticket holders from renewing their seats, exactly the opposite is happening. In addition to selling their cap of 35,000 season seats, the franchise has an undisclosed season ticket waiting list that is believed to be at least that number and quite possibly twice that number.
While season ticket holders may complain about the never ending price increases, they know full well that if they elect not to renew their seats, they will most likely never have the opportunity to get them back in the future. If that isn’t the definition of being between the proverbial rock and a hard place, nothing is – with or without Clayton Kershaw on the Dodgers’ roster.
If there is a silver lining to this otherwise very dark cloud it’s that it gives many of the Dodgers’ young prospects opportunities that they may not otherwise get. The trade off, of course, will be losing even more guys like Justin Turner and Kenley Jansen to free agency without the means to re-sign them because of the debt service rule.
Although Sunday’s shocking revelation by Shaikin has just been brought to light, you can bet that we will be hearing a lot more about it in the coming days and weeks.
…or (gulp) years.
Posted in 
Wonder what it would take to get Jeimer Candelario from the Cubs good Switch Hitting 3B whose blocked in the Cubs System by Bryant and Rizzo
Although anything is possible, I would imagine that there aren’t too many “hidden treasures” out there that the Dodgers scouting staff are not at least somewhat familiar with.
I personally know nothing about Candelaria so you’ve got me there. That said, I will definitely give him a look now. The Cubs are a classic example that you CAN win a World Series without a boatload of free agents.
Thanks for your excellent insight.
I for one think it is about time the spending is gotten under control even if it has to be forced upon them which I didn’t know could happen. Basically speaking spending after spending has not very often gotten teams a ring.
I am not sure why they didn’t know they were driving into a blind alley with spending. Perhaps their aggressive push to refurbish the minor league system is a sign they did know and could account for their spending at the international level. Perhaps they also feel an international draft will soon become a fait accompli so should cash in (no pun intended) before such a draft.
If a debt service rule has to be enforced then the team has indeed been financially mismanaged.
What do you guys think about this joke trade proposal by Jim Bowden?
2. Pittsburgh Pirates and Los Angeles Dodgers
The trade
Pirates get RHP Jose De Leon and 1B Cody Bellinger.
Dodgers get OF Andrew McCutchen.
Why it works
For the Pirates: The Pirates need to continue to do what they have to do in a small market, which means trading star players even if they are the face of the franchise so that they can continue to be at least wild-card contenders year-in and year-out. Trading McCutchen will be extremely unpopular, but in the Bucs’ view, they have very little choice economically. Trading McCutchen two years before free agency will give them the best possible return.
In this trade the Pirates would get a solid middle-of-the-rotation starter in De Leon. De Leon has a 93-96 mph fastball and an above-average changeup, complemented with a breaking ball that’s still developing. His deception is well above average, and when his breaking ball becomes more consistent, he’ll be a 200-inning workhorse. De Leon would fit nicely behind Gerrit Cole, Jameson Taillon and Tyler Glasnow in their young rotation.
Bellinger would be the key to the trade for the Pirates. Bellinger, 21, is a future middle-of-the-order left-handed bat who profiles out to be a 30-homer, 100-RBI force. He should be ready by next September 2018 at the latest. The Pirates have top outfield prospect Aaron Meadows just a year away, and they’d love to give 1B/OF prospect Josh Bell a full year of at-bats to find out about him before Meadows is ready. The McCutchen deal opens up a spot for them to give them all of those opportunities over the next two seasons.
For the Dodgers: The Dodgers desperately need another right-handed bat, and McCutchen provides the perfect No. 2 hitter to slot in front of Corey Seager in the Dodgers’ lineup. McCutchen would play left field for the Dodgers, with Joc Pederson, a better defender, remaining in center.
McCutchen would also bring strong leadership and would instantly become a fan favorite in Los Angeles. He has hit 20 or more home runs in each of the past six seasons and has had an on-base percentage of over .400 in four of the past five seasons. He had a down year this past season, but his strong finish in the final six weeks convinced scouts there is no decline in his bat speed and overall talent. McCutchen is a five-time All-Star, four-time Silver Slugger award winner and has even won a Gold Glove (although that was back in 2012).
There is a reason that Jim Bowden is no longer a GM.
I purposely didn’t go there, but that was my first thought.
Imagine posting that on Facebook the dumb people on there would make the trade in a heartbeat because names
Though I don’t totally understand this “debt service rule” it appears that a simple description, as it applies to the Dodgers, is “Cut spending now.”
To that end the proposed trade is counterproductive. It’ll be some years before DeLeon’s and Bellinger’s salaries combined match McCutchen’s.
I agree with Ron that McCutchen’s best years are behind him. DeLeon’s and Bellinger’s are clearly ahead.
I am opposed to ANY trade involving Cody Bellinger – he is the very future of the team.
Although I have always been a fan of Andruw McCutchen, his best days are behind him.
Ron, it’s Paul here to say ya took the words right out of my mouth. Bellinger is untouchable as far as I am concerned and certainly not worth trading just to get McCutchen. Dodgers need a big RHB to hit LHP but there has to be other ways of acquiring that.
Debt service rule: “limits debt to no more than 12 times annual revenue, minus expenses. Shaikin notes that the Dodgers were not profitable in any of their first three full seasons under new ownership, co-owner Todd Boehly said last year. Boehly added that the team’s debt is believed to be in the hundreds of millions.”
Revenue minus expenses equals profit/loss. If no profits, I guess the rule says you must be debt free. I guess we now know why Dodgers were trying to sell a percentage of the team to that Korean billionaire.
You have to stop somewhere so stop with Bellinger.
I also think we might have seen the best of McCutchon but in any event he is signed for 2017 and a team option for 2018, then free agency at age 32 expecting long term. In 2-3 years time Bellinger’s output will be
as good or better than McCutchon’s.
Regarding the debt issue. If I were a cold hearted mercenary I would trade Kershaw to Boston if I could get Betts and Moncada. I would even add Gonzales and take Sandoval off their hands. I would also include Puig.
Just to keep talking crazy stuff, I would then trade Sandoval to the Giants and give them some money for Nunez.
This trade assumes that Betts can play third base and Moncada can be ready no later than mid-season to play second for the Dodgers.
If Boston won’t do that trade then I would just offer Keshaw for Betts plus whatever the Dodgers could also get from Boston and play Betts at second and move Puig to third. I would still try to trade Gonzales and Ethier but not necessarily in that deal.
RF Toles
3B Puig
SS Seager
2B Betts
CF Pederson
LF Thompson
1B Bellinger
C Grandal/Barnes
Use a 6 man rotation without Kershaw.
Bellinger isn’t ready for the show ’til he gets rid of that Joc Pederson swing.
Do you really think the Giants want Sandoval back?
I concur that Bellinger is not ready, but he is not far off. Where I disagree is that IMO Bellinger is different from Pederson. Cody has shown an ability to adapt. While a small sample size, his numbers in the Arizona Fall League seem to show this. Joc is a little stubborn but he did improve his approach in 2016, just not as much as hoped for. Joc has good speed and will hopefully learn that his OPS increases with 2 doubles vs 1 HR and 1K, and his improvement should hasten.
Joc needs to continuously improve his plan for each at bat and keep playing pepper. Always, my math says 4 bases divided by 2 at bats equal 2.000 whether its from two doubles or one home run and a strikeout.
Consider this: What did you think of Joc prior to his rookie year? I know I was expecting ROY, as were most.
I’m not sure what you’re disagreeing with, since you said nothing that differed from what I said. I’ve seen Cody in 1 game, the Fall Stars Game, in which he was using the big uppercut swing that Joc brought to the Show. That was the only comparison I made to Joc, and it is valid. That type swing works in the minors, as it did for Joc. It doesn’t work in the Show.
I also read a scouting report on Cody that said he picked up that big swing in ’15 when he started hitting more HR’s.
They need to correct that now, not when he’s facing Strasburg, Arrieta, Greinke, etc.
oops regarding OPS. Always, I was thinking slugging. You were right about OPS math.
If Gonzales were traded first base might be played by a platoon of Grandal, Sedegen, SVS, until Bellinger is ready which could be somewhere between opening day and June 1.
Bums, in response to the above about math…you are right that there is no difference in slugging percentage, it is the OBP that increases, thus OPS increases.
The hot stove scuttlebut is that the Giants do want Sandoval back if Boston eats some of his salary.
If not Betts then Trea Turner.
I agree with Harold and the out of control spending. It cannot continue and be sustained. The FO has been saddled with an impossible task of building up a horrid farm system, stay competitive at the ML level, and be cost conscious because they have to assume too many albatross contracts. Thus, Dodger fans had to get used to the Brett Anderson, Brandon McCarthy, and Scott Kazmir bridges until Julio Urias, Jose De Leon, Brock Stewart, Ross Stripling, Chase De Jong, and Walker Buehler can establish themselves at the ML level. I think we are at the end of that bridge and our future rotation should be very sustainable (and good).
Unfortunately the Dodgers do not have the position players ready to assume starting positions at the ML Level, especially with RH bats. I would be willing to accept Micah Johnson or Willie Calhoun at 2B this year, but both are LH. The Dodgers have zero 3B candidates in their organization RH or LH. Jeimer Candelario is an outstanding option if available. I would prefer Alex Bregman (who wouldn’t) but Candelario could be very good. I am sure that whatever the cost is, it will sting. The Cubs are going to need pitching after the Arrieta and Lackey contracts are up, so a top of the rotation pitching prospect ready to step in for 2018 is what they are going to ask for. I think it starts with Walker Buehler, and that would be hard. You cannot get a plus prospect for a position of need without giving up a plus prospect, and the Dodgers have a number of plus pitching prospects, and they all cannot be in the LAD rotation.
I am sure they are looking at Logan Forsythe and Jake Odorizzi from the Rays (they are not getting Chris Archer). Daniel Robertson could be a fall back middle infielder from the Rays. The Rays have Willy Adames for the future. I would think they are looking to Oakland for any/all of Sonny Gray/Franklin Barreto/Sean Doolittle. The A’s owe LAD for the Hill/Reddick trade. Also Ryan Braun and Jonathan Villar from the Brewers are probably being explored. There are options other than Chris Sale/Chris Archer/Gerrit Cole and Ian Kinsler/Brian Dozier/Todd Frazier. I love the Hot Stove League, and I hope the CBA does not get in the way. I am anxious and excited to see what gems Friedman is going to uncover to take over 2B, 3B, and RH bat.
I do not remember much about the specifics of the $2B purchase price, other than the new ownership needed to assume McCourt’s debt, and McCourt was still a partner in the real estate (stupid on Guggs). I have not seen a balance sheet for any of the entities, so it is hard to really know what the risk is. If the team and the real estate are considered separate entities (and I am assuming that they are), couldn’t the Dodgers restructure the real estate debt to retire some of the team debt? I am certain that MLB does not look for real estate assets to be a component of debt compliance for the team. California commercial real estate was at its lowest value in 2011-2012 so the value had to increase significantly.
These are extremely smart people, and I am sure that they had/have a game plan to comply with MLB. I could be totally off base, but I truly doubt that ownership is concerned about MLB actually assuming operational control. Internally they obviously want to get below the luxury tax, and they definitely will after 2018, but probably will after 2017 depending on the CBA.
Regardless of the debt compliance concerns, the Dodgers still have to get their contracts to a sustainable level, which ownership has stated is a requirement. I don’t know who the 3B, 2B, closer, starting rotation, or RH bats will be come Spring, but I do believe that Andrew Friedman does have a plan for the 40-Man as much as ownership has a plan for MLB debt compliance. And I do not think they believe the answer is Rob Segedin (3B), Kike’ Hernandez/Chris Taylor (2B) or Pedro Baez (closer).
Excellent points! Thank you! The title of Shaikin’s article “…under mandate…” is certainly misleading and contradicted by Stan Kasten. Couple of quotes in the article have a different tone than the ominous title; “I think the Dodgers will be in a position that they can comply with our expectations in terms of the debt service rule, without any dramatic alteration in the kind of product they have been putting on the field,” Manfred said. Regarding the 5 year period, “It’s to give clubs an opportunity to get their feet on the ground,” Manfred said. “I think the Dodgers have always had a plan that would give them financial stability over the long haul.” And, Manfred was quoted “I firmly believe that, over the long haul, they will be a club that will routinely be in compliance with the debt service rule.” “I also believe it’s important for the game not to have major dislocations in terms of people trying to get in compliance. We will continue to work with them.” Too much being made of Shaikin’s article, but the great majority of Dodgers fans knew that maintaining a huge payroll was not sustainable and from day 1 Kasten said that the long term strategy was to build from within.
Well said Always as usual.
Doug Padilla’s article, “Dodgers deny being under MLB ‘mandate’ to bring down debt” definitely worth reading as it brings clarity and debunks the LA Times title.