LOS ANGELES -- The Los Angeles Dodgers insist that their business model is thriving and they are under no orders from Major League Baseball to curtail debt, despite a report that indicated otherwise this past weekend.
A report in the Los Angeles Times on Saturday revealed through an unnamed source that the Dodgers are "hundreds of millions" of dollars in debt after the first four seasons under Guggenheim Baseball Management. That same report said the Dodgers "face a mandate" to meet MLB's debt rules.
The Dodgers did not dispute that they have operating debt. It was the suggestion that MLB has ordered them to do something about it that seemed to rankle team officials.
"There is no mandate," Dodgers president and CEO Stan Kasten said Monday afternoon. "There is no problem with our debt, and we continue to work on the same program we have been working on from the day we walked in here in 2012, which is to say we're working hard to build the best team we can for this year while being mindful of continuing to build the best pipeline of minor leaguers to the major leagues that we can."
Commissioner Rob Manfred also moved to deny that the Dodgers are under any order to curtail spending. Even if the Dodgers were in violation of the debt service rule, it is just one of a number of areas that would have to be in noncompliance before the commissioner's office would take action.
"The commissioner's office works with all clubs to monitor compliance with the debt service rule," Manfred said. "Noncompliant clubs are asked to submit a plan demonstrating a path to compliance. Clubs are evaluated on an ongoing basis relative to that plan. The rule is intended to ensure the financial health of clubs relative to their ability to service their indebtedness -- not to influence decisions on the player market. There are various ways to achieve compliance, and there is no mandate to cut payroll."
A major league source indicated that there is now a developing perception among both teams and potential free agents around the game that the Dodgers could be under some financial stress. Kasten reiterated that nothing could be further from the truth.
The Dodgers have spent lavishly since Gugenheim Baseball Management purchased the team from Frank McCourt in May 2012. The ownership group followed the $2 billion purchase by doubling the payroll in its first full season, from $105 million in 2012 to $216 million in 2013. Payroll then went from $229 million in 2014 to $271 million in 2015 before settling back at $249 million the past season.
The L.A. Times report said payroll could drop further in 2017. Without outlining the club's roster plans for next season, Kasten confirmed that the ownership group's business plan has gone unchanged since it went into place in 2012.
From his days with the Atlanta Braves to his time with the Washington Nationals, Kasten has shown a propensity to develop rosters from within the organization, winning with a mix of young players who provide cost certainty and veterans who provide experience and leadership.
The Dodgers are not married to the same plan, but it appears to be developing anyway, with the emergence of young players such as Joc Pederson, Corey Seager, Julio Urias and Jose De Leon. Expected arrivals down the road are infielders Cody Bellinger and Willie Calhoun and outfielder Alex Verdugo.
The emergence of those players alone would provide the cost certainty that would reduce payroll naturally, along with the fact that high-dollar salaries for players such as Andre Ethier, Adrian Gonzalez, Scott Kazmir and Brandon McCarthy will be off the books by the end of the 2018 season. Clayton Kershaw could opt out of his contract after the 2018 season, but the Dodgers figure to be in position by then to be among the highest bidders for his services.
Although no team has operated in the financial stratosphere the Dodgers have maneuvered in the past four seasons, there are no indications that MLB is worried about the club's debt service ratio. The Dodgers have led baseball in payroll each of the past four seasons.
"There is no problem with our debt, and we are continuing to operate on the same program that we have when we walked in here in 2012," Kasten said.
Kasten also moved to eliminate the notion that the club is somehow struggling financially. The club raised season-ticket prices for 2017, but early returns show that many season-ticket holders are willing to pay the additional costs for a team that has won four consecutive National League West titles. This is the first time in team history that the Dodgers reached the postseason in four consecutive seasons.
"Business for the Dodgers is very strong and very healthy, and it is why we lead baseball in attendance and in season tickets because we have a tremendous fan base that has great confidence in the product we put out there year after year," Kasten said. "And it is clear from the early renewals we are getting that they have the same or greater level of confidence next year.
"I think, in fairness, they have appreciated the kind of team we have put together the last four years and the kind of future we have. And those things aren't going to change."