Last week, the Dodgers made one of the more surprising moves the offseason, inking Trevor Bauer to a three-year, $105-million contract, with opt-outs after each of the first two seasons. The deal came somewhat out of leftfield, with most linking the right-hander to the Mets rather than LA, and the Dodgers up until that point seemingly content to rest on their championship laurels and let the rival Padres narrow the gap in the NL West.
If you listened to the company line toed by MLB, however, the signing came as a surprise for a different reason; the Dodgers should be hoarding cash right about now. Heading into this offseason, the league appeared to lay the groundwork for a cold market, taking every opportunity it could to claim massive losses during the 2020 season. Rob Manfred pointed to the $8.3 billion in debt MLB took on. Forbes calculated revenues dropped something like $6 billion in 2020. Without fans in the stands, teams surely took in less than they did in previous years, and the owners wasted no chances to point out that fact.
That brings us to the Dodgers. The narrative constructed by MLB paints a picture of 30 clubs wincing after they couldn’t pack their stadiums with people to sell beer and hot dogs and shirseys to. That should impact LA more than any team, with the possible exception of the New York Yankees. The Dodgers outpaced the rest of the league by a mile in 2019 attendance, pushing nearly 4 million fans through turnstiles, about half a million more than the second-place team. If we assume the average cost of attending a Dodger game would have been something like $75, well, the simple math indicates LA may have missed out on $300 million in game-day revenues alone.
Having sustained massive losses on that front, and having led the league in luxury tax payments for most of the last decade before ducking under the threshold in the last couple years, is there any team in the league with more incentive to lick its wounds than LA? And what does it say about the Yankees’ offseason-defining quest to duck the luxury tax that the Dodgers, their west coast mirror image, threw caution to the wind to sign Bauer?
The Bauer move blasted LA back into the luxury tax. Cot’s Contracts estimates the Dodgers CBT payroll at about $237 million after the move, and this is before any rumored re-signing of third baseman Justin Turner. The CBT penalties are small, but they’ll add up to make Bauer’s signing even more expensive than his $34-million AAV would indicate.
And yet, the Dodgers put it all on the line to sign an extremely talented pitcher, but one whose recent NL Cy Young award belies an inconsistent, if ultimately effective, onfield track record. His track record off the field, conversely, remains remarkably consistent. At every stop, Bauer has clashed with teammates and made waves online with boorish behavior. For what it’s worth, Francisco Lindor vouched for him as a good teammate, but it’s clear signing Bauer is not a straightforward move, particularly at a time when the league is at least paying lip service to the idea that harassment and discrimination can’t be tolerated.
This isn’t to say the Yankees should have signed Bauer, per se. I argued against the idea in my free agent profile of Bauer. It’s just to show the contrast between the narrative the league, and the Yankees, have eagerly participated in, and the reality. Teams have lost tons of revenue, for certain, they aren’t lying about that. But the Dodgers have put tell to the lie that because teams have lost revenue, they can’t help but cut costs massively.
The Yankees are much like the Dodgers. With 81 home dates, 40,000 fans in attendance typically, and an average cost of attending around $80, the Yankees stood to lose upwards of $250 million in revenue thanks to the empty stands of 2020. Just like the Dodgers, the Yankees will also lose out on those enormous revenue streams for at least some of the 2021 season. As they say, the bigger they are, the harder they fall. The Yankees and Dodgers stand out from the pack in terms of revenues and market size, and it stands to reason that when those revenues crumble, they take the biggest hit.
But the Dodgers just showed that taking the biggest hit absolutely doesn’t necessitate a $50 million cut in player costs, like the one the Yankees are currently flashing. The Dodgers winter makes it seem obvious that the Yankees likely could have taken the financial hit from the pandemic and soldiered on with a massive payroll. If the Yankees and Dodgers are financial twins, why is one ignoring the luxury tax, while the other is making pure salary dump trades with archrivals?
Something doesn’t add up. Either there’s something about the Dodgers we can’t see that enables them to weather the financial storm better than the Yankees, or, the Yankees aren’t ducking the tax because it’s necessary, but because they just really want to. Much like the league has used the pandemic to justify changes they wanted to make anyway, the Yankees haven’t let a good crisis go to waste. Why keep rolling a $250-million payroll when you can gesture towards the world-engulfing nightmare and cry that you just can’t keep up the spending?
At the end of the day, because the Yankees still have a relatively high payroll, they’re run by a skilled front office, and they have awesome players, they’ll still trot out a tremendous team in 2021. Even after all the self-imposed austerity measures, the Yankees are excellent. There’s just no actual need for them to cut costs, and for them to lie about the façade to us. They don’t need to contort themselves to show that they lost so much revenue, and that the pandemic necessitates cuts. They can drop the act, tell us that they’re doing what they’re doing because they want more money, and keep it moving.