Shohei Ohtani signed a ridiculous, unheard-of contract with the Los Angeles Dodgers earlier in the month. Let’s break down Ohtani’s $700 million contract and what it means for the future of the MLB.
Unprecedented Contract Decision
Shohei Ohtani will likely stay in California for the rest of his career. However, he left the Los Angeles Angels for the Los Angeles Dodgers in his second free-agency window.
Many of the top markets were bidding for Ohtani’s services. Who wouldn’t?
Ohtani is one of the best pitchers in the MLB, but also one of the best hitters in the MLB. The league has never seen anything like him before.
The 29-year-old from Japan has hit 171 home runs in six seasons in the MLB. He’s also snacked 437 RBIs and has earned a .274 batting average with a .922 OPS.
On top of that, Ohtani has started in 86 games in his career. He didn’t pitch in 2019 and only started two games in 2020. However, he’s had a 3.01 ERA with a 1.08 WHIP to go along with 608 strikeouts in 481.2 innings.
He’s averaged nearly four strikeouts for every walk in his career.
After lots of discussion and thoughts with his agent and people close to him, Ohtani decided to sign a ten-year, $700 million contract to play for the Los Angeles Dodgers. However, the contract is something we’ve never seen before. Let’s break it down below.
Ohtani’s Contract
MLB fans had been waiting all off-season for Ohtani to make his decision.
Quite frankly, every team in the MLB was waiting for his decision to make other moves as they saw fit.
Eventually, Ohtani chose to go to the Dodgers for $700 million. That was big news. However, a couple of hours later, after that news, Ohtani’s contract language started to make waves.
While he signed for $700 million, he’ll only receive $2 million each year for the next ten seasons. In the following ten seasons, he’ll earn $68 million every year as deferred money.
The money would stop coming in by Ohtani’s 50th birthday.
After the Dodgers pulled this off, some baseball executives were amazed. Others were disappointed that the Dodgers would do something like this. Meanwhile, there is no rule against deferred money. After all, the players agreed to have no limit for deferred money. That’s the language inside the bargaining agreement.
By doing this deal, Ohtani is giving the Dodgers more flexibility to sign other players for this season and beyond.
The Los Angeles Dodgers Roster
The Dodgers don’t really need any more help. They’ve been World Series contenders every year since Ohtani came into the league in 2018. Therefore, this signing with Ohtani, which includes all the deferred money, will hurt the balance of the MLB for years to come.
Ohtani won’t pitch this season after surgery. However, he’ll eventually pitch for the Dodgers. He’ll be playing alongside other key stars like Mookie Betts, Freddie Freeman, Clayton Kershaw, Will Smith, Max Muncy, and newly acquired Tyler Glasnow.
The Ohtani deal allowed the Dodgers to trade for Glasnow with the Rays and then give him an extension for a five-year deal worth $136.5 million.
Imagine the MLB betting sites when facing Betts, Ohtani, and Freeman back-to-back-to-back to begin games. Because soon it’s about to become reality.
The Dodgers will likely score the most runs in the first inning than any team in the MLB. They’d potentially even get close to breaking the all-time record for runs in the first inning.
Meanwhile, Ohtani isn’t the only one with deferred cash. Betts and Freeman have both deferred a combined $172 million for the Dodgers to continue to spend freely for more players.
Those three salaries will now count as $95.7 million toward the CBT instead of it being $118.5 million. That’s a $24 million difference in annual cost. That’s like a potential No. 2 starter’s salary.
Other Teams With Deferrals
While the Dodgers made significant moves with Ohtani, they’re not the first and certainly won’t be the last team to do this as long as it’s still legal.
The Washington Nationals landed Max Scherzer in 2015 after he won the Cy Young Award. He signed a seven-year deal worth $210 million. Half of that money was deferred money.
Meanwhile, another pitcher on the Nationals, Stephen Strasburg, was about to head into free agency. Therefore, the Nationals sent him a seven-year deal worth $175 million with $70 million deferred.
Those two guys gave the Nationals a World Series in 2019. Eventually, Strasburg opted out of his deal after winning the World Series. With that, the Nationals re-upped his contract to seven years, $245 million. Again, $80 million of that was deferred with 1% interest.
That deal didn’t work out as well. Strasburg has since returned after pitching in just eight games from 2020-2022. Injuries ruined his career. But he’ll get paid for many years without having to step on the mound.
