DodoFinance Breaking News Made For You!
Shohei Ohtani Makes Historical $700 Million Deal with Los Angeles Dodgers
In a groundbreaking move, Shohei Ohtani, the star Japanese pitcher and designated hitter, has signed a 10-year contract worth an astonishing $700 million with the Los Angeles Dodgers. This deal surpasses all previous records in Major League Baseball (MLB) history and signals a new era of financial success for the sport.
What sets this contract apart is the unprecedented deferral arrangement included in the deal. Ohtani has agreed to defer all but $2 million of his annual salary until after the completion of the 10-year contract. The deferred money will be paid out without any interest from 2034 to 2043, a testament to Ohtani’s commitment to the team.
Interestingly, it was Ohtani himself who suggested the deferrals during the negotiations, pushing the deal towards the staggering $700 million mark. This unique structure not only rewards Ohtani handsomely but also provides the Dodgers with additional cash flow and payroll flexibility.
Ohtani’s off-the-field ventures and endorsement deals are expected to bring in around $50 million per year, further solidifying his status as one of baseball’s highest earners. The deferrals also give the Dodgers more room to navigate the competitive balance tax, commonly known as the luxury tax, which limits teams’ spending on player salaries.
For luxury tax purposes, the average annual value of Ohtani’s contract is estimated to be about $46 million, surpassing Max Scherzer’s previous record with the New York Mets of $43.3 million per year. Under baseball’s collective bargaining agreement, there are no restrictions on how much salary a player and team can defer, making Ohtani’s contract a true anomaly in the MLB.
Over the full 20-year lifespan of the deal, Ohtani will earn a staggering $700 million. The payments will be evenly distributed throughout the two 10-year periods, with Ohtani receiving $2 million each year from 2024 to 2033 and $68 million annually from 2034 to 2043.
This massive contract has not deterred the Dodgers from actively seeking more talent. They are currently targeting pitchers Yoshinobu Yamamoto and Tyler Glasnow, showcasing their commitment to building a championship-caliber team around Ohtani.
It’s worth noting that this deal surpasses the previous record held by Ohtani’s former Angels teammate, Mike Trout, who signed a $426.5 million contract. Ohtani’s agent, Nez Balelo, hinted at the deferral arrangement when announcing the pitcher’s decision to join the Dodgers, emphasizing a long-term commitment to success.
In this monumental move, Shohei Ohtani has not only rewritten the record books but has also paved the way for a new era of contracts and financial structures in professional baseball. As the star player takes to the field in Dodger blue, fans and analysts alike will be closely watching to see if he can live up to the expectations set by his historic deal.
