Dodgers facing MLB mandate to cut hundreds of millions in debt

The Los Angeles Dodgers will need to balance their books in order to avoid breaking Major League Baseball rules regarding their outstanding debt.

Under current MLB guidelines, teams are given five years following an ownership change to comply with the debt service rule, though the club is now believed to be in hundreds of millions of debt, according to the Los Angeles Times' Bill Shaikin. Since being purchased in 2012 by Guggenheim Baseball Management for $2.15 billion, the Dodgers spent wildly and never turned a profit in the following three seasons, including their record-breaking $300 million in payroll in 2015.

Thanks in part to their improved farm system, the club expects to bring that number down to the $200-million mark in 2018, but commissioner Rob Manfred doesn't expect that compliance to hinder their on-field product.

"I think the Dodgers will be in a position that they can comply with our expectations in terms of the debt service rule, without any dramatic alteration in the kind of product they have been putting on the field," Manfred said, according to Shaikin.

Though they will need to reduce spending, the Dodgers have been consistently competitive under the new ownership, having won the NL West division title four times since 2012.

"They're doing what they can to set the team up for the future," Ron Fowler, executive chairman of the San Diego Padres, told Shaikin. "Do I like it as a competitor? No. Do they have the right to do it? Absolutely, yes."

Los Angeles had the majors' most expensive total payroll in 2016, spending approximately $52 million more than the New York Yankees, according to Spotrac.