Dodgers agree to $136.5M contract extension with recently acquired ace to make blockbuster trade official

 

The Dodgers and Rays have officially completed a significant four-player trade. In this deal, right-handed pitcher Tyler Glasnow, outfielder Manuel Margot, and $4 million in cash considerations are headed to Los Angeles. In return, the Rays acquire right-hander Ryan Pepiot and outfielder Jonny Deluca. This trade had been in the news for the past few days, with the final hurdle being the Dodgers' negotiation of a contract extension with Glasnow. The negotiations have concluded successfully, and the Dodgers announced that Glasnow has agreed to a new long-term contract valued at $136.5 million. Wasserman represents Glasnow.

According to information from ESPN's Jeff Passan, Glasnow's new contract will see him earn $110 million in new money over the 2025-2028 seasons. In 2024, Glasnow was already set to earn $25 million based on the terms of his previous contract with the Rays. The breakdown of the new deal includes $90 million in salary over the 2025-2027 seasons, and the Dodgers hold a $30 million club option on Glasnow’s services for 2028. If the team declines that option, Glasnow can exercise a $20 million player option for 2028. Passan's reported numbers total $135 million, leaving the extra $1.5 million unaccounted for, possibly in the form of a signing bonus or additional guaranteed money.

Unlike Shohei Ohtani's recent $700 million deal with the Dodgers, Glasnow's extension does not involve deferred money. Consequently, it will be spread out over the Dodgers’ luxury-tax bills, averaging $27.3 million annually for the next five seasons. The Dodgers' estimated luxury-tax number for 2023 is around $253.7 million, still below the $257 million secondary Competitive Balance Tax (CBT) tier. However, with other roster needs to address, the Dodgers' tax bill could potentially approach or exceed the next penalty tier of $277 million before Opening Day.

Tyler Glasnow had been considered a trade candidate since signing a two-year, $30.35 million extension with the Rays during the 2022 season. This deal, made while Glasnow was recovering from Tommy John surgery, backloaded $25 million of the salary into the 2024 season, making it likely that the Rays would seek to trade him before then.

The Dodgers’ rotation had been facing uncertainty due to injuries to key pitchers like Walker Buehler and possibly Dustin May in the midseason. With this trade, the Dodgers address their pitching needs. Ryan Pepiot, part of the Dodgers' young pitching prospects, now moves to Tampa Bay as he enters his third MLB season.

The Rays, known for their strategic budget management, managed to unload $33 million in salary by moving Glasnow and Margot, coupled with the $4 million in cash considerations. This reflects the Rays' familiar strategy of making budget-conscious, sell-high trades to maintain competitiveness. Pepiot is expected to fill the rotation spot left vacant by Glasnow, and Deluca may shuttle between Triple-A and the majors given his two remaining minor league option years.

In the Dodgers’ outfield, Margot, a right-handed hitter, is likely to assume a part-time role alongside left-handed hitters James Outman and Jason Heyward. With Mookie Betts transitioning to the Dodgers’ everyday second baseman in 2024, there might be a need for additional outfield depth.

The details of this trade were first reported by Jack Azoulay-Haron of MLB Nerds and Bruce Kuntz of Dodgers Digest. Jon Heyman of The New York Post initially mentioned the possibility of a Glasnow extension, and Jeff Passan of ESPN confirmed the agreement contingent on the extension. Marc Topkin of the Tampa Bay Times was the first to report the inclusion of the $4 million in salary offset by the Rays.