The Los Angeles Dodgers won the sweepstakes for superstar dual-threat player Shohei Ohtani in free agency, signing him to a massive 10-year $700 million contract. And perhaps even better for the Dodgers is that they will still have the flexibility to sign many other impactful players after making a drastic decision on Ohtani’s contract.
Ohtani’s $700 million is not only the largest contract in the history of the MLB, but the history of sports period. But the Dodgers will not be paying this contract upfront. In fact, they won’t even be paying it in the ten years that he is set to be under contract with the team.
According to ESPN’s Jeff Passan, Ohtani’s contract calls for him to only receive $2 million annually for the next ten seasons. The remaining $280 million of the deal is being deferred until the end of the deal.
Shohei Ohtani's $700 million contract calls for him to be paid only $2 million a year for the next 10 seasons, with $680 million deferred until the end of the deal, sources confirm to ESPN.
The CBT hit on the contract is going to be around $46 million, a huge discount for L.A.
— Jeff Passan (@JeffPassan) December 11, 2023
Passan added that this is something that Ohtani proposed in his contract, in large part due to his off-field earnings being more than enough to sustain himself during the duration of his contract.
The structure of the deal, first reported by @FabianArdaya, is unprecedented. Multiple people involved have said Ohtani proposed the structure and that toward the end of negotiations he said he wanted to defer his salary. His off-the-field earnings are significant enough for it.
— Jeff Passan (@JeffPassan) December 11, 2023
According to Fabian Ardaya of The Athletic, the deferred money is to be paid out without interest from 2034 to 2043 to Ohtani.
This is obviously an unbelievable development that fans have taken notice of. Many offered their opinions of this news on social media.
Two million a year?!! Crazier than 700 total!! https://t.co/ZE1xB6d7l6 pic.twitter.com/kuJKw74gT8
— Jomboy (@Jomboy_) December 11, 2023
Bobby Bonilla walked so Shohei could run faster than the speed of light https://t.co/nYfgrUqOla
— Field Yates (@FieldYates) December 11, 2023
This feels like it should not be legal imo. https://t.co/qqVzCh0MNS
— Jared Carrabis (@Jared_Carrabis) December 11, 2023
If anyone can do this, shohei Ohtani can
Absolute massive Lebron James level megastar to a population well north of 100M people in Japan + US endorsement opportunities
Money (“ONLY” 2 million annually) is no problem for Ohtani haha https://t.co/IOKoYCEIRw— Big Game Bengal (@BengalYouTube) December 11, 2023
But I thought Shohei’s free agency was boring?? Haha this dude is making the baseball world crazy. https://t.co/dPow0mrdyi
— Coach Trev (@trevorplouffe) December 11, 2023
Man. There'd be a revolt in every other MLB city if he'd done this in Toronto. https://t.co/F8tXxyyLKU
— Jeff Blair (@SNJeffBlair) December 11, 2023
We have seen contracts deferred in other situations before. Perhaps the most notable time it happened was with the New York Mets and former All-Star Bobby Bonilla.
The Mets signed Bonilla to a deal worth $29 million in 1991. Instead of paying that throughout his contract, they opted to defer his contract. New York now pays him $1.19 million annually on July 1st. They have been doing so since 2011 and are set to until 2035.
This deal for Ohtani will largely be handled in a similar manner, but on a much larger, historic scale considering Ohtani’s monumental contract.
On one hand, this is great for the Dodgers at the moment. They will have the flexibility to sign a number of star free agents alongside Ohtani throughout his deal which could make the team a true dynasty for the next ten years.
That being said, this contract will hamper the Dodgers for the next ten years once they do begin to pay him. And he may not even be on the team at that point. So they better hope that there are many championships in Los Angeles over the next ten years with Ohtani on the team.