The Los Angeles Dodgers made history with their signing of Shohei Ohtani to a 10-year, $700 million contract, which is the largest deal in professional sports history.
Ohtani’s contract comes with unprecedented deferrals as he will receive just $2 million per season over the lifetime of the deal. The two-way star will then earn $68 million per year from 2034-2043.
The unique structure was proposed by Ohtani so the Dodgers can consistently build a competitive team around him each season.
According to Tom Verducci of Sports Illustrated, Ohtani sought assurances from the Dodgers that they would live up to their agreement before signing his contract:
To assure the Dodgers honor his gesture of unselfishness, Ohtani asked for language in his contract that assures the club will make good on its promise to use the savings he created to build a competitive team around him, according to one source familiar with those negotiations.
He now holds the record for most money deferred in a contract with 97%. The previous record deferral in MLB belonged to Max Scherzer, who had 50% of his $210 million contract with the Washington Nationals put off for future years.
Ohtani’s contract deferrals will bring the total value and competitive balance tax (CBT) figure down to around $46 million each season.
That’s significant for the Dodgers as they now have another $23.94 million to play with each season against the luxury tax thresholds. L.A. could use the savings this offseason to acquire another starting pitcher after already adding Tyler Glasnow, and they remain in search of another bat, particularly one for the outfield.
While Ohtani will only earn $2 million per season with the Dodgers, he is expected to make up for the deferrals in the form of endorsements. The 29-year-old’s deal with New Balance should help him earn close to $50 million off the field next year.
San Francisco Giants made same contract to Shohei Ohtani
San Francisco Giants president of baseball operations Farhan Zaidi said the team presented Ohtani the same contract offer he received from the Dodgers, and that it came down to Ohtani preferring to play in L.A.
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