10 years, 700 million for Shohei

[Birdman]

Not my money but no way sign anyone to a ten year deal like that..just had elbow surgery so don’t know how that will affect him & get around 35 ur skills start to diminish

[Moranis]

Saw a tweet, which was obviously fake, that said Ohtani's contract paid him 1 million a year for the next 9 years and then 691 million in the 10th year.  It got me thinking, would we maybe see something like that in baseball at some point? Not to that extreme of course, but some sort of grossly inflated balloon payment in a contract where the team basically alters a contract to pay a smaller amount for bulk of it, and then has a season or two with massive payouts.  Full on cap manipulation.  And if the balloon payment years were the first and last years, it might even get a player to sign off on it.  So in Ohtani's case.  100 million in year 1 and 10 and then years 2-9, 62.5 million a year or something like that.

[Donoghus]

This is ummm….something.

https://twitter.com/FabianArdaya/status/1734343146304397564

Shohei Ohtani’s record-setting 10-year, $700 million deal includes a series of unprecedented deferrals, a person briefed on the terms told The Athletic on Monday.

In an effort to enable the Dodgers to continue spending around stars Ohtani, Mookie Betts and Freddie Freeman, Ohtani agreed to defer all but $2 million of his annual salary — $68 million of his $70 million per year — until after the completion of the contract. The deferred money is to be paid out without interest from 2034 to 2043.

The previously unreported deferrals were said to be suggested by Ohtani himself as the negotiations vaulted the figure towards $700 million, the person briefed on the terms told The Athletic. The deal is expected to soon be finalized.

The unusual structure is intended to provide the Dodgers additional cash flow and payroll flexibility. In the meantime, Ohtani continues to bring in big dollars elsewhere from endorsements and off-the-field ventures. Ohtani is believed to make $50 million per year annually away from the diamond, the person briefed on the terms told The Athletic.

The deferrals also give Dodgers extra freedom navigating the competitive balance tax, or luxury tax as it’s called. For CBT purposes, the expected average annual value on the contract is said to be closer to $46 million per year, the person briefed on the terms said. The Dodgers remain in the mix at the top of the market, particularly for pitching, with free-agent Japanese right-hander Yoshinobu Yamamoto and Rays right-hander Tyler Glasnow among their targets.

Ohtani’s contract went well past the $426.5 million his former Angels teammate, Mike Trout, received in the previous record deal. Ohtani’s agent at Creative Artists Agency, Nez Balelo, hinted at the deferral arrangement when Ohtani’s decision to join the Dodgers was announced.

“He is excited to begin this partnership, and he structured his contract to reflect a true commitment from both sides to long-term success,” Balelo said in a statement at the time.

[Moranis]

MLB's rules are so crazy

[Phantom255x]

Dang, 700M with only 2M per year the next 10 years, and 680M deferred between 2034-2043

Honestly this might be bad for baseball. And it also makes me wonder if we'll see more of this. I think reportedly, even though it's 70M AAV, the luxury tax number is only 45M for LAD which isn't as bad. So will more premium FA's start to take this route too?

[rocknrollforyoursoul]

Dang, 700M with only 2M per year the next 10 years, and 680M deferred between 2034-2043

Honestly this might be bad for baseball. And it also makes me wonder if we'll see more of this. I think reportedly, even though it's 70M AAV, the luxury tax number is only 45M for LAD which isn't as bad. So will more premium FA's start to take this route too?

One of my buddies thinks that MLB will immediately act to ban this type of thing in the future, and I think he's right. Because, hypothetically, if five or six top players were available in the same offseason, one team could sign all of them for $1-$2M per year each, with the rest deferred, and build a true super team.

[SparzWizard]

Cheating the salary cap typa thing in MLB?

$700M though that's gonna drive up game day prices not just for Dodgers games but possibly other games too. Sad, cheapest seats are gonna be expensive and I've been to a few Dodgers games for special occasions.

[ozgod]

Sounds sketchy for sure 

[BitterJim]

Dang, 700M with only 2M per year the next 10 years, and 680M deferred between 2034-2043

Honestly this might be bad for baseball. And it also makes me wonder if we'll see more of this. I think reportedly, even though it's 70M AAV, the luxury tax number is only 45M for LAD which isn't as bad. So will more premium FA's start to take this route too?

The luxury tax hit is lower because the present value of the contract is lower. Based on the MLB's assumed 5% inflation rate, the contract is worth closer to $450 million in today's dollars.

I don't see other players going for this sort of thing unless they can top the $700 million number. It's good for a big contract number but no so much for a big salary

[GetLucky]

Dang, 700M with only 2M per year the next 10 years, and 680M deferred between 2034-2043

Honestly this might be bad for baseball. And it also makes me wonder if we'll see more of this. I think reportedly, even though it's 70M AAV, the luxury tax number is only 45M for LAD which isn't as bad. So will more premium FA's start to take this route too?

The luxury tax hit is lower because the present value of the contract is lower. Based on the MLB's assumed 5% inflation rate, the contract is worth closer to $450 million in today's dollars.

I don't see other players going for this sort of thing unless they can top the $700 million number. It's good for a big contract number but no so much for a big salary

This is a Warriors getting KD level loophole in the CBA. Assuming 5% inflation for the next 10 years is insane.

[Moranis]

I feel like the league should make the Dodgers put the present day value of the money in an account at a minimum.  It just seems like too much can go wrong for a franchise to have that sort of way in the future commitment for player that won't be on the team.  That would at least ensure, most if not all of the money is there to pay the player and it makes the team feel at least most of the financial burden while the player is actually on the team.

[GreenEnvy]

I’m honestly surprised the MLBPA is allowing this. We’ve seen them nix other deals that they thought would set a bad precedent and this appears to egregiously circumvent this luxury tax at the players expense.

[Vermont Green]

How about going all in?  Or mortgaging the future?  How will the Dodgers afford a roster 2034 and beyond?  They will be $68 million in the hole to start.   Seems crazy to me.

[Roy H.]

I’m honestly surprised the MLBPA is allowing this. We’ve seen them nix other deals that they thought would set a bad precedent and this appears to egregiously circumvent this luxury tax at the players expense.

Is it at the player's expense?  He can live off of endorsements and he's got $680 million guaranteed to retire on.

What were other teams offering?

[GreenEnvy]

I’m honestly surprised the MLBPA is allowing this. We’ve seen them nix other deals that they thought would set a bad precedent and this appears to egregiously circumvent this luxury tax at the players expense.

Is it at the player's expense?  He can live off of endorsements and he's got $680 million guaranteed to retire on.

What were other teams offering?

The endorsements have nothing to do with when his salary gets paid. Paying any amount twice as long as intended is not beneficial to the recipient. If they “overpaid” because of the deferrals, the money should count against the luxury tax during the years in which he is signed for.

I know Scherzer did something similar, and I’m sure others have too since Bonilla (which was under different circumstances). But to this extent? Paying 97% of the salary after the contract is up without explicit interest is nefarious.

I’m going to assume MLB holds the $70M against the tax. But if these contracts become common, you may see teams start dooming themselves down the road. How many of these mega-contracts are worth it the entire duration? How do trades work with deferrals?

If you want to grab headlines and pay a man $700M, pay it when he’s signed to play, even if he’s okay deferring it.