The Los Angeles Dodgers pulled off a shocking coup in signing two-way superstar Shohei Ohtani to a landmark $700 million contract that will keep him in Dodger blue through the 2033 season, according to a report by Fabian Ardaya of The Athletic.
However, in a highly unusual move, Ohtani has agreed to defer an incredible $680 million of that total to after the contract expires.
As Ardaya writes, “Ohtani will collect just $2 million annually over the life of the deal before the remaining money is paid out over the course of 10 years once the contract is up.”
Shohei Ohtani will defer $68M per year of his $70M annual salary to allow Dodgers to keep spending, per @FabianArdaya pic.twitter.com/38ze5ON8vC
— Bleacher Report (@BleacherReport) December 11, 2023
This massive deferral will allow the Dodgers to aggressively pursue other top free agents as they seek to build a juggernaut around the 29-year-old Ohtani.
“In terms of MLB’s Competitive Balance Tax (CBT), Ohtani’s deal will represent an annual hit of $46 million,” writes Ardaya, “a massive discount” compared to the total dollar figure. Ohtani already earns up to “$50 million per year in off-field revenue, including endorsements and other financial ventures,” so he could afford to defer his baseball salary.
In fact, deferring over 95% of the contract’s value was apparently Ohtani’s idea.
As Ardaya puts it, “The decision to defer the massive sum of money was reportedly a suggestion from Ohtani himself.” This selfless gesture could give the Dodgers payroll flexibility to aggressively shop in free agency, possibly making “a run at fellow Japanese star Yoshinobu Yamamoto,” the two-way standout drawing interest from the Mets and Yankees.
With Ohtani locked up long-term on a discount deal structured to their advantage, the creative Dodgers now have both financial freedom and one of baseball’s most singular talents to build a potential dynasty around.
Shohei Ohtani Goes Full Bobby Bonilla: Deferring $68M Of Contract Annually