Jason Burgos
Despite having an absurd amount of money owed to several players in the short and long term, the Los Angeles Dodgers are making a huge profit. While it seems impossible, a sports business insider recently explained how the team can do what others can’t.
To the surprise of no one, the defending champion Dodgers head into their game on Thursday night tied for the best record in baseball. They have an absolutely stacked roster that is likely to dominate MLB for a second straight season. However, that locker room comes at a hefty price with a league-high $331 million payroll for 2025.
However, due to the team’s heavy use of deferral-filled contracts for many of their top stars, they will be paying several players for years after they retire or go elsewhere. They will fork over $1 billion in deferments in the contracts of Shohei Ohtani, Mookie Betts, Freddie Freeman, Blake Snell, Will Smith, Tommy Edman, and Teoscar Hernandez.
It seems like a strategy that will be a loser financially over the next decade, but could set the club up to be a major global brand for several decades. However, various reports have suggested the Los Angeles Dodgers have been quite profitable despite their massive payroll. But how?
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How can the Los Angeles Dodgers be profitable despite an absurd payroll?
“The Dodgers have a very unique situation with Guggenheim Asset Management. Some people have explained to me, the Dodgers are able to do these huge deferral deals because of the way they are able to offset the risk with insurance contracts they work threw with Guggenheim,” CNBC senior sports reporter Michael Ozanian told Sportsnaut this week.
Yet it is much more than that. While the contracts are jam-packed with deferrals, don’t bog them down financially like they would other franchises, Ozanian says the organization deserves all the flowers for maximizing profits during another peak moment in the team’s history.
“There’s no question their revenues have increased a lot over the last few years,” he says. “You’ve got to give credit where credit is due. They’ve done a great job with marketing, promotion, and building up their fan base globally.
“They have the biggest ballpark in MLB. The highest attendance in MLB. Before revenue sharing, they had the highest revenue in MLB, and they have by far the richest local TV deal in baseball.”
The Dodgers earned the No. 2 spot on Ozanian’s 2025 MLB team valuations. He gives the team an overall value of $5.8 billion.
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