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Dodgers Debt Problems Could Complicate Potential Ryan Braun Trade

The Dodgers need to address their mountain of debt, according to the league.

MLB: Milwaukee Brewers at Texas Rangers Kevin Jairaj-USA TODAY Sports

The Milwaukee Brewers had a rather active summer on the trade market this past season, but one deal that did not come to fruition was the rumored waiver trade agreement that would have sent Ryan Braun to the Los Angeles Dodgers. As the story goes, the Brewers and Dodgers negotiated right down to the August 31st deadline for postseason eligibility before the deal fell through, but the two sides were expected to resume talks again this winter and one report going so far as to call it “likely” that Braun would be playing in Los Angeles next season.

It has now been nearly a month since the World Series has ended, yet there has been no indication that the Brewers and Dodgers have re-engaged in talks regarding Ryan Braun. There may be a good reason, too; the Dodgers have reportedly been mandated by Major League Baseball to cut payroll and reduce their debt service.

After spending over $1.1 bil on player payrolls in the last four years since new ownership took over in LA, the Dodgers are now “hundreds of millions in debt.” Per MLB rules, debt is limited to “no more than 12 times annual revenue, minus expenses.” Both commissioner Rob Manfred and Dodgers’ CFO Tucker Cain expressed confidence that the Dodgers will be able to become compliant without drastic changes to the on-field product, but the team will need to begin to reduce spending starting with this upcoming season.

The Dodgers spent nearly $260 mil on player payroll in 2016 and according to their Roster Resource page, are already estimated for $193 mil in payroll in 2017. That includes over $40 mil in dead money that’s getting paid to players that are no longer on the Dodgers. In addition to needing to reduce their debt, the club has an internal goal of getting underneath the luxury tax cap (currently $189 mil but could increase to around $200 mil in the next CBA) by the end of 2018 in order to be able to be aggressive on a free agent market that figures to include Manny Machado, Bryce Harper, and perhaps even staff ace Clayton Kershaw (if he exercises his opt-out clause).

Against that background, dealing Ryan Braun to LA becomes a rather complicated proposition. Adding $76 mil to the payroll over the next four years doesn’t help the club reduce their debt now or help get under the luxury tax threshold in the future. In order for a trade like this to happen the Brewers would need to take on at least one, if not two bad contracts in order to balance out the money owed. That could mean something like having to absorb the $40 mil in total owed to Brandon McCarthy and Yasiel Puig over the next two seasons, at the very least. And if the Dodgers are going to clear all that payroll room, wouldn’t that money be better spent addressing the two positions that are currently left blank on their official depth chart page: second base and third base?

Departing free agents have left holes at second base, third base, the starting rotation, and in the bullpen for the Dodgers and given their new financial constraints, they may not have the flexibility to bring back both 3B Justin Turner and closer Kenley Jansen on the hefty multi-year pacts that both will surely command. That could force the club to pursue cheaper, shorter-term solutions on the trade market or in free agency. Meanwhile, LA still has Joc Pederson, Enrique Hernandez, Andrew Toles, Yasiel Puig, and Andre Ethier in the fold in the outfield along with top prospects Cody Bellinger and Alex Verdugo waiting in the wings in the upper minors. It would probably make more sense to allocate their resources elsewhere than in the outfield at this time.

After several years of spending money like it was going out of style, the league has told the LA Dodgers that they need to scale things back and start reducing some of the debt the club has taken on. With an expensive roster already in place and several more urgent needs than in the outfield, that may table any potential talks of sending Ryan Braun back to his hometown.