How the Dodgers could extend Clayton Kershaw without going over the luxury tax

The Dodgers worked hard this offseason to make sure they reset the luxury tax number by moving money around and not splurging on free agents and/or trade acquisitions. At present, they’re projected not to crest the $197 million mark. But then comes the 800-pound elephant in the room: Clayton Kershaw‘s looming opt-out.

Kershaw can opt-out of the final two years and $65 million on his deal. This will happen following his age-30 season … unless the Dodgers give him a contract extension first.

GM Farhan Zaidi would not discuss whether the Dodgers have talked contract with Clayton Kershaw, who has an opt-out after this year, but said the club and pitcher have an “open dialogue. He’s our franchise player.”

— Ken Gurnick (@kengurnick) February 20, 2018

“Open dialogue” might mean absolutely nothing. It might mean they’re truly talking. But for an extension to make sense, the Dodgers must make sure any extension doesn’t take too much of the remaining $15-17 million of spending room the Dodgers have left for 2018 (without going over $197 million). Kershaw’s competitive balance tax number is $30.7 million, based on his original 7-year, $215 million deal. The two years after the opt-out do count toward the average annual value.

So what would an extension look like? Well, I proposed something in the comments section a week ago.

“Give Kershaw a 5-year, $180 million extension contingent on him not exercising his opt-out, making it (essentially) a 7-year, $245 million deal ($35M/year).”

That seems pretty fair, right? Speak up if not. You have to think $35 million a season for a guy through his age-37 season is more than fair. The Dodgers would definitely be overpaying for his decline years, but the front office cannot allow Kershaw to leave, no matter the risk. Some will disagree with this sentiment and that’s fine. But he is the face of this franchise and sometimes public relations wins out over logic. This would be one of the rare occasions.

So, that would increase the Kershaw’s CBT number by $4.3 million. I’m sure there will be bonus and milestone incentives included, but those aren’t part of the AAV. Could Kershaw get a 7-year, $245 million deal on the open market? It depends. Teams like the Rangers, Yankees and anyone else who’s actually willing to spend money could be in play, but Kershaw has been a Dodger his entire career and giving him almost a quarter of a billion dollars after he turns 30 would be quite the commitment.

Not only that, but this would still allow the Dodgers to add at the trade deadline, which they have done in each of the last three years. Late-July acquisitions — even of players making significant money — are always drastically less impactful on the CBT than they would be if the Dodgers made the same trade in March. Either that or just acquire Chris Archer and his $4.25 million CBT number (doesn’t include salary of buyout seasons), and then the Dodgers won’t have to worry about manipulating the payroll to stay under the $197M number.

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This is a quick, rough view of what it might take to keep Kershaw a Dodger for the rest of his career. If they could do something like this, it would be beneficial for all parties. Yes, Kershaw would be giving up his chance (again) to hit the open market, but who knows if even wants to leave.

This isn’t a Kobe Bryant situation either. Kershaw still has plenty of good years left and there’s no doubt he’s the most beloved athlete in Los Angeles these days. They’d be paying for the end of his career, but they’d also be paying for another 3-4 years of elite or near-elite production. We’ll see if anything happens before the end of the season. The chances are slim, but who woulda thunk he’d have signed the original 7-year contract after his age-25 season … without the back issues he has been dealing with the last two years.

Get it done, folks.