Dodgers Rumors: Edwin Díaz’s Contract Features Over $13 Million in Deferred Payments
In a move that has sent shockwaves through the baseball community, the Los Angeles Dodgers have secured a three-year, $69 million deal with free agent closer Edwin Díaz, significantly enhancing their bullpen capabilities. This contract not only represents a substantial financial commitment but also sets a groundbreaking precedent in Major League Baseball (MLB).
The average annual value (AAV) of $23 million for Díaz’s contract breaks records for relievers, eclipsing the previous high of $20.4 million that Díaz earned during his tenure with the New York Mets. This deal marks the second consecutive year that the Dodgers have invested heavily in their relief pitching, following last offseason's contract with Tanner Scott, who received a four-year deal averaging $18 million annually, totaling $72 million.
Scott's agreement, however, came with an intriguing twist: it included $21 million in deferred payments. This arrangement adjusted Scott’s cap hit to approximately $12 million for the years 2025 and 2026, while his final two contract years would see a cap impact of around $16 million.
According to insights from Joel Sherman of the New York Post, Díaz's new contract also incorporates deferred payments, although they are less pronounced than those in Scott’s agreement. Specifically, Díaz will receive $4.5 million in deferred payments each year over the three-year term, which for luxury tax calculations amounts to roughly $21.1 million.
While these deferrals technically lower the AAV of Díaz’s contract, the overall figure remains record-breaking. Together, Díaz and Scott represent two of the highest-paid relievers in MLB history when considering their AAV.
Despite the hefty commitments, the Dodgers are projected to exceed the competitive balance threshold (CBT) of $244 million in 2026 following the signing of Díaz. This situation arises even after the team managed to trim $87 million from their payroll before the offseason, alongside the relatively minor deferrals in Díaz’s contract.
The Dodgers have shown a historical willingness to take on additional financial penalties in pursuit of building the most competitive roster possible. However, this strategy has not gone unnoticed.
Last December, MLB Commissioner Rob Manfred voiced concerns regarding the increasing trend of deferred salaries in player contracts. To address these worries, MLB has implemented regulations stipulating that any deferred salary must be placed in escrow. This measure ensures that players receive their owed payments as agreed upon in their contracts.
The Dodgers are not alone in utilizing this deferred payment strategy; the Toronto Blue Jays have also followed suit, deferring $64 million as part of the seven-year, $210 million contract signed with Dylan Cease this offseason.
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