Shohei Ohtani: Japanese star agrees to defer majority of Los Angeles Dodgers deal
- Published
Shohei Ohtani won the American League MVP in 2023
Shohei Ohtani has agreed to defer $680m (£541m) of his $700m (£557m) deal with the Los Angeles Dodgers, according to multiple US sources including the MLB, external.
Ohtani joined the Dodgers on a 10-year contract - in the biggest deal in the sport's history - after his contract with the Los Angeles Angels expired.
He has agreed to take home $2m (£1.6m) per year until 2034 when he will be paid $68m (£54m) per year until 2043.
The move gives the Dodgers more freedom to add to their roster.
Ohtani is reported to bring in around $50m (£40m) annually via endorsements and off-the-field ventures.
A two-time MVP, who lifted the trophy with the Angels in 2023, Ohtani has been widely credited with transforming how the sport is played in the modern era and is already well on the way to being considered an all-time great.
Unlike most baseball players who specialise in batting or pitching, Ohtani is equally skilled at both disciplines.
His overall deal is said to make Ohtani one of the world's highest-earning athletes, with the reported value of the contract ranking alongside - or even surpassing - the sort of sums megastars like footballer Lionel Messi or basketball player LeBron James have commanded.
Dodgers owner Mark Walter said: "On behalf of the LA Dodgers and our fans everywhere, we welcome Shohei Ohtani to the Dodgers, the home of Jackie Robinson, Sandy Koufax and Hideo Nomo, three of the sport's most legendary and pathbreaking players.
"We congratulate him on his historic contract with our storied franchise."
As per the MLB's Collective Bargaining Agreement, which was ratified after lengthy negotiations between MLB representatives and the players' association in May: "There shall be no limitations on either the amount of the deferred compensation or the percentage of total compensation attributable to deferred compensation for which a Uniform Player's Contract may provide."
In structuring the deal in this manner, the Dodgers will have greater financial flexibility in the short term as they look to ensure they meet the threshold for the league's Competitive Balance Tax (CBT), which is set at a limit of $237m (£189m) for 2024.
Each team's CBT figure is determined by using the average annual value (AAV) of each player's contract across the 40-man roster, plus additional player benefits.
Had Ohtani not opted to defer the majority of his contract, the AAV on his deal would be $70m (£56m).
The Japanese player is not the first to adopt this approach, with Max Scherzer agreeing to defer half of his $210m (£168m) when he signed a seven-year contract with the Washington Nationals before the 2015 season.
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