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Shohei Ohtani’s historic $700 million contract with Dodgers features unprecedented deferrals

Shohei Ohtani will have to wait for the majority of his contract to be paid out.
Shohei Ohtani will have to wait for the majority of his contract to be paid out.

After agreeing to a 10-year, $700 million contract with the Dodgers on Saturday, money is likely an afterthought for Shohei Ohtani. However, the majority of his historic payout will not begin until the year 2034.

Ohtani has reportedly deferred $68 million of his $70 million annual salary meaning he will make just $2 million per year during his time with the Dodgers. The remaining $680 million will be paid from 2034-2043. The deferrals give the Dodgers more financial freedom to continue spending around the two-way megastar and remain contenders for the length of his contract.

The CBT Luxury Tax hit will reportedly be approximately $46 million per season as opposed to the $70 million it would have been had there been no deferrals. Ohtani, reportedly, is the one who presented the idea to the Dodgers.

While the reported deferrals may seem unfair and ridiculous from a competitive standpoint, Article XVI in the collective bargaining agreement states, “There shall be 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.”

Now the big-market Dodgers will have more room to spend to build around their torrid trio of Mookie Betts, Freddie Freeman and Ohtani. Japanese ace Yoshinobu Yamamoto is the top available target on the free agent market and it remains to be seen if they can get involved in the race that may reach as high as $300 million.

With Ohtani off the mound this season as he recovers from Tommy John surgery, there is a glaring need at the top of Los Angeles’s rotation. NL Cy Young award winner Blake Snell is also among the free-agent pitchers available.

Ohtani just wrapped up a top-secret free agency tour cashing out as a two-way, two-time American League MVP. The 23-year-old slashed .304/.412/.654 with 44 homers and 95 RBI with the Angels in 2023. The right-hander also pitched to a 3.14 ERA in 23 starts on the mound.