Dodgers considering monster contract offer for top free-agent starter

The Dodgers are considering presenting an offer in the $250-300M range to Yoshinobu Yamamoto, reports Jack Harris of the Los Angeles Times. Earlier reports indicated that teams are likely to put forth contract proposals to the NPB star this week, with a decision perhaps coming by Monday.

Yamamoto’s landing spot and price point are perhaps the biggest remaining story of the offseason. The 25-year-old righty has emerged as the clear top free agent after Shohei Ohtani came off the board. It is believed the field has narrowed to seven teams: the Dodgers, Yankees, Mets, Giants, Red Sox, Phillies and Blue Jays.

On Tuesday morning, Ken Rosenthal of The Athletic indicated Philadelphia and Toronto are more on the outside of the market and could be longer shots. Sportsnet’s Ben Nicholson-Smith echoes that with regards to the Jays, reporting that Toronto is less likely to be one of the top finalists on Yamamoto than they were on Ohtani.

Meanwhile, Alex Speier of the Boston Globe writes that the pitcher’s visit to the East Coast last week only consisted of a stop in New York to chat with the Yankees and Mets. While the Red Sox and Phils conducted in-person interviews with Yamamoto, officials from both teams met with the pitcher and his representatives in Los Angeles.

In recent weeks, there has been increasing speculation the price tag could exceed $300M. That’s particularly true when considering the accompanying posting fee that would be owed to his former team, the Orix Buffaloes. An MLB club would owe the Buffaloes 20% of the contract’s first $25M ($5M), 17.5% of the next $25M ($4.375M), and 15% of additional spending.

An offer of $250M to Yamamoto, which seems a conservative estimate of his earning power at this point given the robust interest, would require a $39.375M posting fee. That’d put the total commitment a little north of $289M. If a team were to offer Yamamoto $300M, that’d come with a $46.875M posting sum that pushes their spending to nearly $347M.

Of course, that’s even before getting to luxury tax implications — which would come into play for the known suitors aside from Boston and San Francisco. The Dodgers have a competitive balance tax projection of around $256M, as calculated by Roster Resource. That places them right on the border of the $257M second threshold of penalization.

As a payor for the third straight year, they’d be taxed at a 62% rate for spending between $257M and $277M and at a 95% clip on money from $277M to $297M (with a 110% tax on any spending thereafter). Signing Yamamoto would push them past the $277M threshold with ease, quite likely tacking on another $17M or more in taxes in year one. To be clear, only the amount paid to Yamamoto would factor into the competitive balance tax calculation; the posting fee is not part of that calculus.

Of course, the deferrals in the Ohtani deal (along with lesser but still notable deferrals for Mookie Betts and Freddie Freeman) lower their immediate raw payroll. Their actual salary commitments for next season are south of $200M, well below the approximate $223M mark they carried into 2023.

Los Angeles certainly isn’t the only team weighing an offer in this range for the three-time Sawamura Award winner. If Yamamoto signs elsewhere, Harris suggests that L.A. is likelier to turn to the trade market for pitching help as opposed to pivoting to another top free agent like Blake Snell or Jordan Montgomery. The Dodgers already struck for Tyler Glasnow on the trade front but remain on the hunt for starting pitching behind their top three of Glasnow, Walker Buehler and Bobby Miller.