Shohei Ohtani Defers $68 Million per Season Under Agreement With Dodgers: Reports
Not long after two-way superstar Shohei Ohtani announced he was signing with the Dodgers, the details of his record-setting 10-year, $700 million contract were revealed as well.
As the Dodgers have done with contracts in the past, they will defer a portion of their payouts to Ohtani after his 10-year contract expires. We now know exactly how much will be deferred.
According to multiple reports, Ohtani will defer all but $2 million of his annual salary each season. This means $680 million of the $700 million he is owed – 97% of the contract’s total value – will be paid out at the end of the 10 years.
“In an effort to enable the Dodgers to continue spending around stars Ohtani, Mookie Betts and Freddie Freeman, Ohtani agreed to defer all but $2 million of his annual salary — $68 million of his $70 million per year — until after the completion of the contract. The deferred money is to be paid out without interest from 2034 to 2043.”
Per Fabian Ardaya of The Athletic
This contract structure is practically unprecedented. (Even Bobby Bonilla’s deferred payouts from the Orioles and Mets are not nearly as lucrative.) The Dodgers will still have major spending flexibility that can help keep the team around Ohtani competitive.
It’s been reported that the idea for these massive deferrals was hatched by Ohtani himself. After spending years mired in mediocrity with the Los Angeles Angels, ostensibly Ohtani wanted to make sure history didn’t repeat itself with the Dodgers.
For CBT purposes, the average annual value of the contract will be closer to $46 million per year – still the largest sum in baseball history, but much more affordable than the $70 million it could have been without any deferred money in the contract.
Many have wondered if Major League Baseball would allow such a contract, but even deferrals of this magnitude were written into the Collective Bargaining Agreement.
ESPN’s Jeff Passan found the exact passage:
With months to go before spring training, the Dodgers are still looking into signing free-agent pitcher Yoshinobu Yamamoto and trading for other top-tier starters as well. Ohtani’s contract should not prohibit them from spending freely.
If Ohtani wasn’t already loved by the fans in Los Angeles, the details of his contract certainly won’t hurt.
Photo Credit: Dale Zanine-USA TODAY Sports
Have you subscribed to our YouTube Channel yet? Subscribe and hit that notification bell to stay up to date on all the latest Dodgers news, rumors, interviews, live streams, and more!
