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When Daniel sent an email to all of us at Dodgers Digest asking, “Anybody want … that trade?” Naturally, I assumed it was some minor deal involving players no one has ever heard of. Well, not quite.
The Los Angeles Dodgers today acquired outfielder Matt Kemp from the Atlanta Braves in exchange for Adrián González, Scott Kazmir, Brandon McCarthy, Charlie Culberson and cash considerations.
— Los Angeles Dodgers (@Dodgers) December 16, 2017
I had to check five times to make sure this wasn’t a hoax. Yes, the Dodgers have reacquired Matt Kemp in a trade that sends Adrian Gonzalez, Scott Kazmir, Brandon McCarthy, Charlie Culberson and the ever-popular cash considerations to Atlanta.
I’m at a loss for words. Seriously, I’m stunned. But let’s try to make some sense of this.
For weeks the Dodgers have been trying to shed the salaries of Adrian Gonzalez, Scott Kazmir and Brandon McCarthy — and with the trade for Matt Kemp, they managed to do it in one fell swoop and position themselves to get under luxury tax. A potential game changer for them.
— Jeff Passan (@JeffPassan) December 16, 2017
#Dodgers now project that they will go under the $197M luxury tax for '18. #Yankees plan to do the same. So now the game's financial monsters will have tax re-set for mammoth fr agt class of 2018-19.
— Joel Sherman (@Joelsherman1) December 16, 2017
We’ve heard about the Dodgers wanting to get under the luxury tax for a while now, but we kind of assumed it would happen next off-season when all the contracts they just traded would be off the books. Instead, they’re going to reset the penalty this winter ahead of next year’s free agent class that includes Clayton Kershaw and Bryce Harper.
The Dodgers had paid the luxury tax five years in a row. That has resulted in $30-plus million in payments, which is essentially lost money. As we know, baseball is a business and no one likes throwing away $30 million if it can be avoided. This is how it gets avoided. The trade allows the Dodgers to get under the luxury tax by taking on fewer dollars this season, instead choosing to be saddled with Kemp’s 2019 salary after the reset.
Jeff Passan laid it out better than I could in my limited time to write this.
This is still a big if, but … if the Yankees and Dodgers end the 2018 season under the luxury-tax threshold, their willingness to spend significant money in future years drastically increases.
— Jeff Passan (@JeffPassan) December 16, 2017
Pardon my spelunking into luxury-tax wonkiness here, but this is important, and it’s not nearly as complicated as people want to make it out to be. So first: The threshold this year is $197M for player salaries and benefits. The Yankees and Dodgers both easily can stay under it.
— Jeff Passan (@JeffPassan) December 16, 2017
This is important because when a team comes in under the luxury-tax threshold, its payments for exceeding it “reset.” Right now, the Yankees and Dodgers both are paying a minimum of 50% on overages. A reset sets that base at 20%. There are surcharges for excess overages, too.
— Jeff Passan (@JeffPassan) December 16, 2017
Let’s say Dodgers stay have a $250M payroll in 2019. If they stay under this year, they will pay $250M in base, get taxed 20% on the money from $206M to $226M, get taxed 32% from $226M to $246M and get taxed 62.5% from $246M to $250M. Total outlay: $262.9M.
— Jeff Passan (@JeffPassan) December 16, 2017
Take that same $250M payroll if the Dodgers don’t get under this year. The first tax: 50%. The first surcharge: 62%. The second surcharge: 95%. In total, that’s $276.2M — more than $13M more than otherwise. And remember, all money in excess of $246M is taxed practically $ for $.
— Jeff Passan (@JeffPassan) December 16, 2017
The scariest thing in the world for 28 other teams around baseball is the Yankees and Dodgers being run by intelligent people with good decision-making skills. They are. The second-scariest thing is the Yankees and Dodgers dipping under the luxury-tax threshold. They’re about to.
— Jeff Passan (@JeffPassan) December 16, 2017
Only thing I would mention is that neither team will likely breach $237 million of payroll because not only is that when they’re taxed almost 100%, but it’s also when their 1st-round draft pick in the draft would be moved back 10 spots. Other than that, this is a great summary of the Dodgers’ thinking.
Oh yeah, not only are there luxury tax benefits, but this also frees up four valuable 40-man roster spots. The 40-man had been full until this moment, and the Dodgers were going to need to make room for Tom Koehler, with whom they reportedly agreed to terms yesterday.
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No one could have predicted something like this was on the horizon. I wrote last winter about luxury tax implications and how it might impact the Dodgers’ roster construction, but never did I believe this trade was coming.
The Braves are going to designate Gonzalez for assignment, which is not surprising. He might just retire at this rate. Kazmir could be decent if he’s healthy, but he’s also a DFA candidate. McCarthy and Culberson should provide at least some value, if they make it through the winter on Atlanta’s 40-man roster.
Man, this is wild. Never did I think Kemp would be a Dodger again. But it might not be a long stay.
Sources: Kemp unlikely to play for #Dodgers. Strong candidate to be traded or released.
— Ken Rosenthal (@Ken_Rosenthal) December 16, 2017
That’s kind of a bummer, but it’s understandable. While he can still hit a bit, Kemp is almost unplayable in the field, as his -17 defensive runs saved in just 851 2/3 defensive innings in left field last season were the worst in baseball. Maybe an AL team looking for a cheap designated hitter might take a chance on him, like, say, the Royals could come calling. And while it’d be nice for nostalgic purposes if he put on the Dodger uniform again, it ain’t happening.
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Now, don’t expect the Dodgers to go out and spend all this newfound money. The goal was to save money without negatively impacting the team’s depth, and they certainly did that. So basically, this is all setting up for the Dodgers to not only retain Kershaw after this season (either via extension or free agency), but also end up with another premium free agent. Harper very well might be the Dodgers’ end game, and that would not suck.
We’ll see how it all plays out. The off-season had been pretty boring to this point (which is fine), but this definitely gave a big jolt to what could be an interesting next month or so.
