Major League Baseball (MLB) has rapidly evolved over the past century and has widely become known as America’s sport. Across decades of playing,  nearly every team has had the opportunity for postseason success; however, the focus of modern baseball is beginning to shift away from the sport itself and more towards becoming a game of profit. 

The rise of the Oakland Athletics baseball team and how their manager, Billy Beane, practically reinvented the landscape of modern baseball. They demonstrated how a team with little capital could still win in the postseason with efficiency statistics. Beane used obscure metrics such as On-Base Percentage (OBP) to find skilled players for a low price, yet the very strategies that once empowered small-market teams are now being overwhelmed by the Dodgers’ immense financial advantage.

Now, history is being made as the Los Angeles Dodgers showcase a situation directly opposite. The concern stems from how large teams with valuations in the billions can essentially buy the best players available and drastically increase their odds at a championship. This is due to three major factors: contract deferrals, brute-forcing the luxury tax and a unique financial position for the L.A. Dodgers. 

Starting with the deferral salary process, the MLB allows teams to pay players their typically large contract over 10 to 20 years after they’ve played, providing short-term capital and allowing a team to pay more players. This is best shown in Shohei Otani’s 10-year $700 million contract, which is generally considered one of the largest contracts in professional sports history. He is currently receiving $2 million per year, which will jump to $68 million per year after his contract is up. This process is how the Dodgers also pay stars like Mookie Betts and Yoshinobu Yamamoto large amounts that small franchises are unable to compete with in the slightest. Although other larger teams can take the same approach, this is where the flawed Competitive Balance Tax comes in.

The Competitive Balance Tax (CBT), or luxury tax, is essentially the MLB’s version of a salary cap, providing all teams a maximum amount that they can spend on contracts each year. However, unlike a salary cap, the luxury tax has one huge flaw: taxes can be paid. The Dodgers simply pay the tax and ignore the rule in a strategic fashion. They pay when they’re over the threshold and dip below the cap when the fees ramp up. This process allows them to skip over regulations, which other teams cannot afford; due to their immense profits, the Dodgers are essentially monopolizing the baseball world. 

So why aren’t other teams implementing similar, win-now strategies? The simple answer is the risk. As the luxury tax presents daunting fees that could quickly cripple a team, the Dodgers are essentially putting all their eggs in one basket, but those eggs are winning the World Series back-to-back. Teams like the San Diego Padres and New York Mets have actually attempted this strategy, but both ultimately failed to have postseason success, with the Mets creating one of the highest-paid rosters in MLB history. Although top organizations have the freedom to go all in on a championship, replicating the massive influx of revenue that keeps it sustainable is nearly impossible.

The extreme wealth provided by their overwhelming international fanbase, historic local TV contract and investment firm backers, put the Dodgers in a unique position compared to other large-market teams. Spectrum SportsNet LA, a channel owned and created by the Dodgers, provides $330 million per year in just TV revenue. Combining such a large media-driven city with factors that make them so profitable, it’s unrealistic to keep up without carrying huge risks.

To fix this large issue at hand, a salary cap needs to be implemented rather than a tax. Regardless of how steep the payments get, teams with enough aggression, money and contract sophistication can spend their vast profits on winning now, while still securing their future. We’re witnessing the largest sports dynasty ever and it’s only just starting.