Dodgers News: Commission Rob Manfred Says Salary Deferrals ‘Can Become Problematic’

The Los Angeles Dodgers have made headlines for the organization’s decision to utilize deferrals when signing players. In a recent interview, MLB commissioner Rob Manfred weighed in on the Dodgers’ use of deferrals.

“Deferrals at some point can become problematic,” Manfred said to Chris O’Gorman. “Historically, we did have one franchise, Arizona, that got itself into financial difficulties as a result of excessive deferrals. We’ve strengthened our rules in terms of the funding of deferred compensation in order to avoid that kind of problem. But, you know, look, obviously the bigger the numbers get, the bigger the concern.”

The Dodgers shocked the baseball world when they signed Shohei Ohtani to a $700 million contract. Perhaps the most unique aspect of the then-landmark deal was Ohtani’s decision to defer 97 percent of his contract. While deferring so much of a contract isn’t feasible for other players, Ohtani was able to give the Dodgers financial flexibility to add more star power.

President of baseball operations Andrew Friedman believes the contract deferrals have helped create a happy fanbase given the amount of talent on the roster.

“I think we’re rewarding our incredibly passionate fans,” Friedman said. “I think the Shohei one is just jarring to people because it’s so different, and I think the others just unfairly get lumped into that. But I think it’s kind of a lazy narrative … the rest are within the norm and standard operating procedure that a lot of teams have done.”

While the Dodgers have received criticism for the choice to use deferrals, other clubs have chosen not to do so. Like Manfred said, deferrals become a problem when the use is excessive. Friedman explained that not every contract signing includes deferrals.

“I mean, it’s just a lever,” Friedman said. “We’ve talked about this. We’ve done deals recently that don’t have it. We’ve done deals that do.

“In a negotiation, I think it’s always challenging and so you’re looking to any lever you possibly can to help get to a point where there is overlap. There are times where that deal lines up in a more straightforward way. There’s times where it’s less straightforward. Including deferrals helps as a lever to find that overlap. It’s been a useful tool for us. … We just like to get deals done.”

Photo Credit: Brad Penner-Imagn Images

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