Shohei Othani’s record $700-million contract with the Los Angeles Dodgers sent shockwaves throughout the sporting world over the weekend. The details of his 10-year contract leaked on Monday, and they are also stunning.
According to a report in The Athletic, Ohtani will have an annual salary of only $2 million per year, meaning a whopping $680 million will be deferred until 2034. That money will be paid out without interest through 2043.
The unique arrangement lowers Ohtani’s average annual value by approximately $26.3 million, meaning only $43.7 million will count toward the competitive balance tax (CBT). The Dodgers now have ample flexibility to further improve their roster, and they’re reportedly interested in several high-end free agents, including starting pitcher Yoshinobu Yamamoto.
The immediate reaction over the contract details caused an uproar, with some MLB fans wondering if the league would void the deal. However, according to reports, the league has no means to do so thanks to Article XVI in the collective-bargaining agreement, which states that there are “no limitations on either the amount of deferred compensation or the percentage of total compensation attributable to deferred compensation for which a Uniform Player’s Contract may provide.”
While contract deferrals are commonplace, the amount Ohtani’s deferring blows all others out of the water. For example, the Dodgers signed Freddie Freeman to a six-year, $162-million contract last year with $57 million deferred from 2028 through 2040. To put that into perspective, Los Angeles will pay Freeman $4.75 million per year in deferrals compared to Ohtani’s $68 million.
The Dodgers instantly became World Series favorites once news of Ohtani’s imminent signing broke. They had the second-shortest odds behind the Atlanta Braves, but leapfrogged them and are now +550.
