In the intricate world of Major League Baseball (MLB), contracts are often designed with long-term ramifications that can significantly impact a team’s payroll, even years after a player leaves the roster. The Los Angeles Dodgers, one of the league’s most high-profile and well-funded organizations, are a prime example of this dynamic in action. The team will be paying an outfielder nearly $10 million in 2025, despite having released him two years ago. This scenario sheds light on MLB’s unique financial structure, including guaranteed contracts, deferred payments, and the broader implications of long-term deals.
The Context: Guaranteed Contracts in MLB
Unlike in some other professional sports leagues, MLB contracts are fully guaranteed. This means that once a player signs a deal, the team is obligated to pay the full value of the contract, regardless of whether the player is traded, released, or retires. The only exceptions to this rule are rare cases of contract voiding due to breach of conduct or other extreme circumstances.
For teams, this guarantees player security but also creates financial risks. If a player’s performance declines or their role no longer fits the team’s plans, the organization may face the prospect of paying a substantial salary to someone no longer contributing on the field. In such cases, teams often negotiate buyouts or release players while absorbing the remaining financial obligation.
The Dodgers’ Decision
The player in question, though unnamed here, was likely signed to a significant long-term deal during a period when their performance justified such an investment. The Dodgers, like many teams, have historically been aggressive in pursuing and retaining talent, often committing to sizable contracts for elite players. However, long-term deals inherently carry risks, particularly for players whose performance may decline due to injury, aging, or other factors.
Two years ago, the Dodgers determined that this particular outfielder no longer fit their roster, either due to diminished performance, the emergence of younger talent, or the need to reallocate resources elsewhere. Releasing the player allowed the team to move on strategically, but it did not absolve them of their financial obligations under the guaranteed contract.
Deferred Payments: A Common MLB Practice
A key factor in this situation is likely the inclusion of deferred payments within the player’s contract. Deferred payments are a financial strategy employed by MLB teams to manage immediate payroll obligations while spreading out payments over a longer period. While this approach can provide short-term flexibility, it often results in the team paying players well after they’ve departed.
For example, former MLB player Bobby Bonilla famously receives an annual payment of $1.19 million from the New York Mets every July 1, a deal that runs until 2035 despite Bonilla retiring in 2001. This practice, often referred to as “dead money,” represents funds allocated to players no longer actively contributing to the team.
The Dodgers have similarly utilized deferred payments in several contracts, including this one. While the nearly $10 million payment in 2025 may seem striking, it is part of a larger trend within MLB.
Financial Implications for the Dodgers
For a team like the Dodgers, who consistently rank among MLB’s top spenders, the $10 million payment in 2025 might not significantly hinder their overall financial strategy. In 2023, the team’s payroll exceeded $200 million, reflecting their willingness to invest heavily in talent to maintain a competitive edge. However, even wealthy franchises must balance their financial commitments carefully to avoid hampering future flexibility.
Deferred payments, while useful for immediate payroll management, add layers of complexity to long-term budgeting. The Dodgers’ decision to release the outfielder and absorb the financial hit suggests they prioritized performance and roster construction over monetary concerns in the short term.
Broader Trends in MLB Contracts
The Dodgers’ situation is not unique. Across MLB, teams frequently grapple with the challenges of managing long-term contracts. As the sport evolves, franchises are increasingly cautious about committing to lengthy deals, especially for players nearing their 30s when performance often begins to decline.
The rising prominence of analytics in player evaluation has also influenced contract negotiations. Teams now have access to more sophisticated data on player aging curves, injury risks, and performance projections. This information enables them to make more informed decisions but does not entirely eliminate the risks associated with long-term guarantees.
In some cases, teams use creative approaches to minimize financial exposure. Performance incentives, opt-out clauses, and partial guarantees are becoming more common as teams seek to balance player demands with financial prudence. However, for star players, fully guaranteed deals remain the norm, reflecting their leverage in negotiations.
The Human Element: Players’ Perspectives
From the player’s perspective, guaranteed contracts and deferred payments provide significant financial security. Professional athletes face short careers with substantial physical demands and risks of injury. Securing a long-term deal ensures stability, even if unforeseen circumstances arise.
Deferred payments can also serve as a form of post-career income, helping players transition into retirement. For many athletes, managing sudden wealth poses challenges, and structured payments over time can provide a safeguard against financial mismanagement.
Fan Reactions and Media Attention
The revelation that the Dodgers will pay an outfielder nearly $10 million in 2025 has sparked discussions among fans and media alike. While some view it as an example of poor financial planning, others recognize it as a calculated risk inherent in pursuing elite talent. For the Dodgers, the payment is likely a small price to pay for maintaining their competitive edge in previous seasons.
Lessons for MLB Teams
The Dodgers’ predicament highlights the importance of balancing short-term ambitions with long-term financial planning. While aggressive spending can yield immediate results, it can also create challenges down the road. Teams must carefully evaluate the risks and rewards of major contracts, particularly for players with potential durability or performance concerns.
As MLB continues to evolve, it will be interesting to see how teams adapt their approaches to contracts. While guaranteed deals are unlikely to disappear, the use of creative structures and incentives will likely grow as teams seek to mitigate risks and optimize resources.
Conclusion
The Dodgers’ decision to pay nearly $10 million to an outfielder in 2025, despite releasing him two years ago, underscores the complexities of MLB contracts and the financial strategies employed by teams. While such situations may seem surprising to fans, they are a routine part of the sport’s economic landscape. For the Dodgers, this payment reflects the cost of competing at the highest level, a tradeoff they appear willing to accept as they continue to pursue success on the field. Ultimately, this case serves as a reminder of the high stakes and intricate calculations involved in managing a professional sports franchise.