The Los Angeles Dodgers have redefined what it means to be a “powerhouse” in Major League Baseball (MLB). Over the last decade, the franchise has consistently outspent the other teams, culminating today with an unmatched, star-studded roster that appears untouchable. Along the way, they also won a pair of World Series and are heavily favored to do so again in 2025.
Many other teams struggle with financial constraints, some self-inflicted, some due to market forces, and others simply because ownership is unwilling to spend. Dodgers, however, have not been gun shy and have been able to aggressively pursue and sign some of the biggest names in the sport, like Freddie Freeman, Shohei Ohtani, Yoshinobu Yamamoto, and Blake Snell, who they signed last month.
The Team is Built to Spend
The Dodgers’ ability to attract the best players is not just pure luck; it results from strategic future planning that started almost ten years ago. Their financial dominance begins with a $8.35 billion TV deal they struck in 2014, a decision that continues to shield them from the economic struggles hampering many MLB teams today.
The Dodgers are unaffected by the rise of cord-cutting in sports, which has harmed regional sports networks dependent on traditional cable subscriptions. Cord-cutting implies the shift from cable TV to streaming platforms and has reduced revenues for many teams as networks struggle to maintain beneficial and lucrative broadcasting contracts.
When Time Warner Cable acquired broadcast rights to all Dodger games, the agreement included a clause ensuring subscription fees from other providers would still be covered, even if those providers didn’t cover the network. This simple clause ensured the Dodgers received their full payout no matter what happened in the market.
This means the 25-year deal inked in 2014 offers a guaranteed $334 million yearly. To compare, the Yankees’ YES Network only generates around $190 million annually. At the same time, smaller teams earn much less and have given the Dodgers a financial edge, establishing them as the gold standard in baseball economics. They can fund the salaries of top-tier players, which translates to on-field success. “
Deferred Salaries: A Strategic Approach
The Dodgers have masterfully utilized deferred salaries to build their star-studded roster while managing their luxury tax obligations. This strategy allows them to sign top-tier talent while spreading the financial impact over many years.
Shohei Ohtani’s groundbreaking contract exemplifies this approach. Of his $700 million deal, $680 million is deferred, to be paid out from 2034 to 2043. This structure reduces the annual luxury tax hit to around $46 million, significantly less than the $70 million yearly average value. The Dodgers have employed tactics similar to those of stars like Mookie Betts, Freddie Freeman, and Blake Snell, deferring substantial portions of their contracts.
As of 2024, the Dodgers owed nearly $1 billion in deferred payments to seven players, showcasing the extent of this strategy. While this approach creates long-term financial obligations, it provides immediate flexibility to continue adding talent and competing for championships.
Dodger Stadium: A Revenue Powerhouse
Dodger Stadium remains a crucial revenue generator for the franchise. In 2023, the Dodgers generated $211 million from gate receipts alone, a 5% increase from the previous year. This figure doesn’t include additional revenue streams within the stadium.
The team has invested heavily in stadium renovations and new amenities to enhance the fan experience and drive revenue. In 2021, they spent over $100 million on improvements, including a new center field plaza and upgraded sound system.
The Dodgers have also launched initiatives like “Dodgers 365” to maximize stadium usage beyond baseball games. This program will host various events annually, from concerts to corporate functions. By diversifying their offerings, the Dodgers are working to create additional revenue streams and fully capitalize on their iconic venue.
Merchandise Sales: Riding the Wave of Star Power
The Dodgers’ merchandise sales have skyrocketed, particularly following their recent high-profile signings and on-field success. After winning the 2024 World Series, the team set records for championship merchandise sales across all sports platforms. In the first 24 hours following their victory, sales surpassed those of previous champions by significant margins.
Shohei Ohtani’s arrival has been particularly impactful. His Dodgers jersey broke sales records within 48 hours of his signing announcement[24]. The team’s merchandise popularity extends globally, with Japan ranking as the second-highest country for sales behind the United States[48].
Growing International Following
The Dodgers have strategically expanded their international presence, particularly in Mexico, Korea, and Japan. Their participation in the MLB World Tour has been crucial in this effort.
In 2024, the Dodgers opened the MLB season with a series against the San Diego Padres in Seoul, South Korea. This event marked Korea’s first-ever MLB regular-season games and generated significant interest. The team has also played exhibition games in various countries, including Mexico and China, further expanding their global footprint.
Signing international stars like Shohei Ohtani and Yoshinobu Yamamoto has dramatically increased the Dodgers’ popularity in Japan. With Roki Sasaki, new sponsorship deals with Japanese companies have been signed, and merchandise sales have increased in the country.
The Dodgers’ international strategy extends beyond player acquisitions and games. They’ve adapted their stadium operations to cater to international fans, hiring Japanese-speaking tour guides to accommodate the influx of visitors from Japan.
