The Dodgers are cheating financially

[torts]

First drop came this morning 🍿👀

[igor67]

link?

[homer]

 

 

[cragi]

Sounds like the dodgers pay their players based on leveraging the speculative upside of increasing the value of the franchise

[igor67]

Which is the kind of thing that could put egg on the player's union face if those future payout checks bounce/ get discharged in a bankruptcy I don't imagine players rank high in terms of secured creditors...

[Jopal78]

1 hour ago, igor67 said:

Which is the kind of thing that could put egg on the player's union face if those future payout checks bounce/ get discharged in a bankruptcy I don't imagine players rank high in terms of secured creditors...

It’s my understanding teams have to put deferred money into an escrow account for the player by dates certain and are independently audited to make sure they do so. Therefore, the chance that a player retires and when his deferred payment start, the team says “bankrupt!” Are next to zero.

Athletes may be  stupid, but the lawyers/agents taking 5% of their pay are not. 

[Jopal78]

3 hours ago, homer said:

 

 

Yawn… Every insurance company takes their policyholder’s premiums and loans it out and invests it. 

The SEC and governmental investigations into Mark Walter have been ongoing since February 2026. Those investigations are over whether taking his policyholders premiums, and doling them out as loans to his other businesses with below market interest rates and repayment terms, without disclosing that he owns both the lender and lendee  runs afoul of insurance regulations.  
 

While one of those loans was to another Dodgers related entity, in the course of the nearly 8 month investigation by multiple government agencies  there has been zero evidence of a scheme that cheated MLB or gave the Dodgers an illegal competitive advantage. 
 

That the Dodgers exploit the collective bargaining agreement (that all the owners agreed to) in order to get a competitive advantage is more an indictment of Walters fellow owners, than evidence of “cheating”.

[owbc]

1 hour ago, Jopal78 said:

It’s my understanding teams have to put deferred money into an escrow account for the player by dates certain and are independently audited to make sure they do so. Therefore, the chance that a player retires and when his deferred payment start, the team says “bankrupt!” Are next to zero.

Athletes may be  stupid, but the lawyers/agents taking 5% of their pay are not. 

Yeah the contracts are getting paid, period. In the event that Walter goes bankrupt and has to sell, the deferred contract value will come off of the sale price of the Dodgers. 
 

1 hour ago, Jopal78 said:

Yawn… Every insurance company takes their policyholder’s premiums and loans it out and invests it. 

What about when the policyholder owns the insurance company? 

[Jopal78]

1 hour ago, owbc said:

What about when the policyholder owns the insurance company? 

 That would be a mutual insurance company, or a reciprocal risk retention group. They have their own regulations. 

My point concerning Mark Walter is that he is being investigated concerning potential violations of insurance and securities regulations regarding the lending/investing practices of his insurance companies. Nothing more, nothing less. 
 

To date, there has been no legal inquiry into any of his companies that may have received those loans. 
 

We fans think it is unfair how the Dodgers are stacked, so it’s easy to say where there is smoke concerning Walter there must also be fire in Chavez Ravine. But  the methods the Dodgers utilized to become so stacked, while not within the intent of the CBA, is expressly allowed under its terms, which were agreed to by all the owners. 

[cragi]

12 minutes ago, Jopal78 said:

We fans think it is unfair how the Dodgers are stacked, so it’s easy to say where there is smoke concerning Walter there must also be fire in Chavez Ravine. But  the methods the Dodgers utilized to become so stacked, while not within the intent of the CBA, is expressly allowed under its terms, which were agreed to by all the owners. 

That remains to be seen imo. Credit default swaps were the smartest ways for banks to make money until they weren't.

[Fear The Chorizo]

19 minutes ago, Jopal78 said:

 That would be a mutual insurance company, or a reciprocal risk retention group. They have their own regulations. 

My point concerning Mark Walter is that he is being investigated concerning potential violations of insurance and securities regulations regarding the lending/investing practices of his insurance companies. Nothing more, nothing less. 
 

To date, there has been no legal inquiry into any of his companies that may have received those loans. 
 

We fans think it is unfair how the Dodgers are stacked, so it’s easy to say where there is smoke concerning Walter there must also be fire in Chavez Ravine. But  the methods the Dodgers utilized to become so stacked, while not within the intent of the CBA, is expressly allowed under its terms, which were agreed to by all the owners. 

The CBA for a professional sports league isn't going to dive into how an organization comes up with funding to pay their players - it lets the legal system determine whether or not how funding is generated is above board.  Not the same exact scenario, but it's how the Mets' previous ownership group screwed themselves with investing heavily in Madoff's ponzi scheme while the rest of MLB ownership either looked the other way or were totally ignorant, too.

That doesn't mean if this guy, who certainly appears to be dabbling in legally questionable business practices, isn't putting himself in the type of legal trouble that would require his ownership group sell the Dodgers and find us all realizing the way that organization found a way to build the type of infinite revenue streams allowing them to monopolize MLB was illegal.

[Jopal78]

58 minutes ago, Fear The Chorizo said:

The CBA for a professional sports league isn't going to dive into how an organization comes up with funding to pay their players - it lets the legal system determine whether or not how funding is generated is above board.  Not the same exact scenario, but it's how the Mets' previous ownership group screwed themselves with investing heavily in Madoff's ponzi scheme while the rest of MLB ownership either looked the other way or were totally ignorant, too.

That doesn't mean if this guy, who certainly appears to be dabbling in legally questionable business practices, isn't putting himself in the type of legal trouble that would require his ownership group sell the Dodgers and find us all realizing the way that organization found a way to build the type of infinite revenue streams allowing them to monopolize MLB was illegal.

It’s nothing like the Wilpons losing their shirt as part of the Bernie Madoff scandal.  
 

To date, based on published reporting, this is a scenario where Business A (owned by Mark Walter), wants to borrow money.
 

Instead of going to Chase or any other lender where they will be charged, for example, 10% interest with 5 years to repay the amount. Business A instead goes to Insurance Company A aLeo owned by Mark Walter. Insurance Company A makes the same loan but at, for example, 3% interest and 20 years to pay.  
 

The investigation has nothing to do with Business A getting loans, or Business A getting loans from insurance companies. All of that is fine.

What is being investigated is that Insurance Company A concealed that Business A who took out a loan at cut rate terms was owned by the same people as Insurance Company A.  Obviously, loaning insurance company money at favorable terms to a related business is unfair to policy holders of the insurance company. The question being investigated is whether that concealment violates the law. 
 

And that is probably an over simplification, but hopefully provides a little more rationality than “the Dodgers cheat”. 

[owbc]

1 hour ago, Jopal78 said:

It’s nothing like the Wilpons losing their shirt as part of the Bernie Madoff scandal.  
 

To date, based on published reporting, this is a scenario where Business A (owned by Mark Walter), wants to borrow money.
 

Instead of going to Chase or any other lender where they will be charged, for example, 10% interest with 5 years to repay the amount. Business A instead goes to Insurance Company A aLeo owned by Mark Walter. Insurance Company A makes the same loan but at, for example, 3% interest and 20 years to pay.  
 

The investigation has nothing to do with Business A getting loans, or Business A getting loans from insurance companies. All of that is fine.

What is being investigated is that Insurance Company A concealed that Business A who took out a loan at cut rate terms was owned by the same people as Insurance Company A.  Obviously, loaning insurance company money at favorable terms to a related business is unfair to policy holders of the insurance company. The question being investigated is whether that concealment violates the law. 
 

And that is probably an over simplification, but hopefully provides a little more rationality than “the Dodgers cheat”. 

That's only half of it. 

The regulators have already told Business A that it must clean up and unwind its third party exposures.

This created an urgent, multi-billion dollar liquidity crunch which forced Walter to rapidly sell the LA Lakers and explore liquidating other assets INCLUDING the Dodgers TV contract which pays the Dodgers an average of $334 million/year through 2038 and is the exact engine that gives the Dodgers the ability to outspend every other MLB team by far. 

Why would he try to liquidate the highly lucrative TV contract? It turns out that the company that owns SportsNet LA is ALSO owned by "Business A" and has $1.5 billion in debt held by the SAME INSURANCE COMPANIES THAT HOLD ALL OF HIS OTHER DEBT. 

Walter considers the Dodgers his crown jewel and it's the last thing that he would try and liquidate. So the best case scenario is that he liquidates enough of his other holdings to satisfy the regulators, cleans up his finances, and keeps operating the Dodgers with their favorable TV contract for a while longer -- except his debt issuances are now under the microscope so his days of offering MLB players massive deferred contracts are probably over. 

The worst case scenario is that he goes to jail and has to sell the Dodgers -- in that case another billionaire group buys them and they still have the #1 payroll but their days of signing literally every free agent are still over. 

TL;DR: The Dodgers will end up with zero significant FA signings this offseason. 

My 'tin foil hat' theory is that the MLB owners quietly let this happen because they thought it would help them win a salary cap. They're not idiots, I'm sure every one of them has looked into how he's financing his payroll.

[Jopal78]

4 hours ago, owbc said:

That's only half of it. 

The regulators have already told Business A that it must clean up and unwind its third party exposures.

This created an urgent, multi-billion dollar liquidity crunch which forced Walter to rapidly sell the LA Lakers and explore liquidating other assets INCLUDING the Dodgers TV contract which pays the Dodgers an average of $334 million/year through 2038 and is the exact engine that gives the Dodgers the ability to outspend every other MLB team by far. 

Why would he try to liquidate the highly lucrative TV contract? It turns out that the company that owns SportsNet LA is ALSO owned by "Business A" and has $1.5 billion in debt held by the SAME INSURANCE COMPANIES THAT HOLD ALL OF HIS OTHER DEBT. 

Walter considers the Dodgers his crown jewel and it's the last thing that he would try and liquidate. So the best case scenario is that he liquidates enough of his other holdings to satisfy the regulators, cleans up his finances, and keeps operating the Dodgers with their favorable TV contract for a while longer -- except his debt issuances are now under the microscope so his days of offering MLB players massive deferred contracts are probably over. 

The worst case scenario is that he goes to jail and has to sell the Dodgers -- in that case another billionaire group buys them and they still have the #1 payroll but their days of signing literally every free agent are still over. 

TL;DR: The Dodgers will end up with zero significant FA signings this offseason. 

My 'tin foil hat' theory is that the MLB owners quietly let this happen because they thought it would help them win a salary cap. They're not idiots, I'm sure every one of them has looked into how he's financing his payroll.

The crown jewel of the Mark Walter financial empire is Guggenheim Partners the asset management and investment banking firm he runs with over $350 billion dollars under management.

The Dodgers are certainly a glamour asset, but Guggenheim Partners is the straw that stirs the drink. 

Time will tell about the rest of your conclusions. 

[Fear The Chorizo]

19 hours ago, Jopal78 said:

It’s nothing like the Wilpons losing their shirt as part of the Bernie Madoff scandal.  
 

To date, based on published reporting, this is a scenario where Business A (owned by Mark Walter), wants to borrow money.
 

Instead of going to Chase or any other lender where they will be charged, for example, 10% interest with 5 years to repay the amount. Business A instead goes to Insurance Company A aLeo owned by Mark Walter. Insurance Company A makes the same loan but at, for example, 3% interest and 20 years to pay.  
 

The investigation has nothing to do with Business A getting loans, or Business A getting loans from insurance companies. All of that is fine.

What is being investigated is that Insurance Company A concealed that Business A who took out a loan at cut rate terms was owned by the same people as Insurance Company A.  Obviously, loaning insurance company money at favorable terms to a related business is unfair to policy holders of the insurance company. The question being investigated is whether that concealment violates the law. 
 

And that is probably an over simplification, but hopefully provides a little more rationality than “the Dodgers cheat”. 

I dont feel like the dodgers cheat - their baseball ops dont cheat within the confines of the existing CBA, which in itself is a complete joke for playing field parity financially.  

Their baseball people arent the ones who have developed this circular revenue stream that is shady at best and most likely illegal (as you say, the dodgers are but a piece of the internally owned asset/insurance coverage/financing shell game the owner has pulled together).  But, it's the fact they've been able to operate like they have using revenues/backing no other mlb organization could dream of that is driving the need for a salary cap/floor in a league that really would never actually require it if not for what the Dodgers have created.

 

If there's an extended work stoppage in baseball that loses 1-2 seasons, its not the owners or players at fault as a while - it's the Dodgers' owners group for getting things to this point.