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Ohtani’s contract is a game changer

On Behalf of | Dec 17, 2023 | Current Events |

Shohei Ohtani’s play on the baseball diamond has surpassed the loftiest of expectations as both a pitcher and a batter. Now baseball’s greatest two-way player has the contract reflect that: he signed a $700 million contract with the Los Angeles Dodgers. This figure eclipses former teammate Mike Trout’s $426.5 million deal as the most lucrative player contract. It breaks down to $70 million a year for ten years and positions Ohtani as the athlete with the largest contract in the world, regardless of sport. While it is an unprecedented contract, Ohtani turned down a similar offer by the San Francisco Giants.

Many assume that the payroll will come in regular paychecks like most players and the rest of us. Still, Ohtani is drawing only $2 million annually during the ten years under contract, deferring $68 per year until 2034. Depending upon who you talk to, this is either brilliant or a mistake. Ohtani is not the first Dodger to defer payments (the Dodgers used the deferred payment scheme for Mookie Betts’ $365 million and Freddie Freeman before Ohtani), but its size is unprecedented.

What it means for Ohtani

Prior speculation put Ohtani’s contract somewhere around $460 million for a 10-years. This arrangement substantially increases the overall and is a record-setting amount for a player positioned to be the greatest ever (barring injury or something unforeseen). Ohtani also gets to play for a team that can afford to bring in other top-shelf players, which means that the Dodgers could and should be perennial contenders for the National League Pennant and World Series for years to come.

What it means for other players

There are a lot of premier players looking for a team now or in the near future. While no one is likely to pass Ohtani for several years, here are some others who could land massive contracts:

Yoshinobu Yamamoto is a 25-year-old right-hand pitcher from Japan who could end up as a Dodger but will land somewhere with several teams pursuing him. His value is estimated to be in the $200 million range, but that number could increase.

Juan Soto came off the board before Ohtani when the Yankees grabbed the 25-year-old before his final year before free agency. The Yankees will not let him go willingly, and Soto should expect Trout-like money and perhaps higher if the Ohtani-style deferment becomes a trend.

Vlad Guerrero, Jr. will also be a free agent in 2025. He’s currently coming off two hugely successful seasons of 45-plus home runs for the Blue Jays and will be 27 years old at the time of his new and likely long contract.

Outfielder Kyle Tucker gets overshadowed by the Astros’ star-studded line-up, but he posts a lot of gaudy numbers, including nearly (one run short) posting three 30-home run seasons in his first three years in the MLB.

Other big-ticket free agents on the market include pitcher Blake Snell, center fielder Cody Bellinger, pitcher Aaron Nola and pitcher Josh Hader.

What Ohtani means to the Dodgers

The reviews on the Ohtani deal are mixed. Will this deal change how players are valued? While talent is essential for winning, branding opportunities and alternative revenue streams for clubs will push up prices for specific players, and rightfully so.