After beating the New York Yankees in the World Series, LA has recently agreed to new, lucrative contracts with free-agent pitcher Blake Snell and returning infielder Tommy Edman – deals that push the club’s total deferred payments to more than $1 billion for just seven players.
Snell’s $182 million contract, announced Saturday , includes $66 million in deferred money payable to the pitcher through July 1, 2046, according to contract terms obtained by The Associated Press. He’ll receive a $52 million signing bonus, payable on January 25, and annual salaries of $26 million, of which $13.2 million each year will be deferred. The deferred money is payable in equal installments each July 1 from 2035-46.
And because Snell is a Washington state resident, the signing bonus will not be subject to California income tax.
Meanwhile Edman’s $74 million, five-year deal, announced Friday , includes $25 million payable to the infielder and outfielder through July 1, 2044.
Los Angeles now owes deferred payments of $1,006,500,000 to seven players from 2028-46. And that figure could grow if the Dodgers fan find a way to lure free-agent slugger Juan Soto to the west coast. Soto could be worth something approaching $700 million – the same sum the team gave to Shohei Ohtani before the season, much of which is deferred.
Deferred payments are becoming the norm in Major League Baseball, where the New York Mets are routinely mocked for their annual $1 million payments to retired All-Star Bobby Bonilla.
But these days, such deals are now commonplace because they give teams short-term payroll flexibility and help players to navigate difficult state-income tax situations.
It also helps the Dodgers reduce luxury tax payments. For example, by amortizing the contract over several decades, Snell’s average annual salary is discounted to about $31.4 million annually for the Dodgers’ luxury tax payroll and Edman to approximately $12.9 million.
Los Angeles has a $10 million conditional club option for 2023 that could be exercised if Snell has a qualifying injury as specified in the contract and he spends 90 or more consecutive days on the injured list due to the qualifying injury and he has not been traded.
If Snell is traded, he would receive a $5 million assignment bonus, payable by the acquiring team.
He also gets a hotel suite on road trips.
