By: Joe Wisniewski
January 30, 2024
Photo Credit: CNN
The Los Angeles Dodgers have once again made huge splashes in the MLB offseason. The club officially signed the two-way star, Shohei Ohtani, to a deal worth 700 million dollars across 10 years, making him the highest paid player in Major League Baseball History.
This deal is truly the first of its kind, and not only because of its dollar value. Ohtani and the Dodgers agreed to an unprecedented contract structure that will defer $68 million of his $70 million per year until after the completion of the contract. Front Office Sports states, the deferrals will be considered an annual $46 million addition to the Dodgers’ payroll instead of $70 million. The deferred money will be paid without interest from 2034 to 2043. Due to inflation and depreciation the overall expected value of the contract will be closer to $500 million.
According to Ohtani’s agent, Nez Balelo, it was Ohtani’s idea to implement a deferred contract, which will allow the Dodgers more spending freedom in free agency. This comes after Ohatani spent six years with the Angels, and zero playoff appearances. A direct result of this freedom was shown not even a month after Ohtani’s signing as the Dodgers officially signed another young Japanese phenom, Yoshinobu Yamamoto. Yamamoto inked a 12 year deal worth $325 million, making him the highest paid pitcher in MLB history.
Ohtani’s contract may be a sign for what is to come in the future of professional sports leagues. Given how the season plays out for the Dodgers, many teams may look to replicate a deferred contract to allow more aggression in free agency. While it may not directly affect the competitive balance in the MLB, teams that see themselves as being a few key pieces away from a championship run will most likely consider this.