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Zack Greinke contract details: A breakdown of the $147 million deal

The Dodgers were already nearing the stratosphere with their payroll, but the $147 million just adds to the massive expenditures.

New Dodgers pitcher Zack Greinke has reason to smile.
New Dodgers pitcher Zack Greinke has reason to smile.
Jamie Squire

The Dodgers made history with their agreement with Zack Greinke. The deal, which is expected to be officially announced on Monday, is for $147 million over six years, the largest average annual value of a contract for a pitcher and the largest total deal for a right-handed pitcher in MLB history.

Here is the year-by-year breakdown of Greinke's contract, per Jim Bowden of ESPN and XM Radio:

  • $12 million signing bonus
  • 2013: $17 million
  • 2014: $24 million
  • 2015: $23 million
  • 2016: $24 million
  • 2017: $23 million
  • 2018: $24 million

Bowden also reported that Greinke can opt out after three years, and that if Greinke is traded at any point in the contract he can opt our of the contract at the end of that season. As an example, CC Sabathia had an opt-out clause after three years of his seven-year, $161 million contract with the Yankees. Sabathia used that after 2011 to add one year and a guaranteed $30 million to the back end of the deal, plus a vesting option that could add $45 million over two years.

For purposes of the competitive balance tax, the signing bonus is relevant as it is spread out evenly over the course for the deal. For instance, in 2013 Greinke will count as $19 million, which includes his $17 million salary and one-sixth of his signing bonus. The tax threshold next year is $178 million, and for every dollar the Dodgers are over that amount they will pay a 17.5% tax as a first-time offender.

On Thursday, Dylan Hernandez of the Los Angeles Times asked if the Dodgers' stance on no-trade clauses (they would prefer not to give them) limit their free agent haul. Well, it didn't limit them in getting Greinke, as his contract does not include a no-trade provision, per both Jon Heyman of CBS Sports and Bowden.

With the Greinke signing, here are a few payroll notes:

  • Including all of Greinke's signing bonus, the Dodgers have $222.2 million committed to 20 players in 2013, including Tony Gwynn Jr., who is not currently on the 40-man roster.
  • In 2018 (you know, six years from now), the Dodgers have $75.05 million committed to four players (Greinke, Matt Kemp, Adrian Gonzalez, and Yasiel Puig), and that figure includes the $2.5 million buyout of Andre Ethier's $17.5 million club option.
  • The Dodgers have over $100 million committed in each of the years from 2014-2017 as well, including $158.05 million to 10 players plus four options buyouts and/or deferred salaries in 2014.
  • Since taking over ownership of the Dodgers, the Guggenheim Baseball Partners have taken on roughly $588 million in salary commitments for nine players: Ethier, Puig, Hanley Ramirez, Gonzalez, Josh Beckett, Carl Crawford, Brandon League, Greinke, and of course Nick Punto.
  • Keep in mind, this is all before Ryu Hyun-jin, whose deadline to sign is Sunday at 2 p.m. PT.
  • One pitcher the Dodgers won't be adding any time soon is 18-year old phenom Shohei Otani, who decided this weekend to remain in Japan with the Nippon Ham Fighters.