The Los Angeles Dodgers signed Shohei Ohtani to a mammoth 10-year, $700 million contract.
It’s the largest guarantee in American sports history.
However, it’s also a team-friendly deal somehow.
ESPN insider Jeff Passan explains the details.
“Shohei Ohtani’s $700 million contract calls for him to be paid only $2 million a year for the next 10 seasons, with $680 million deferred until the end of the deal, sources confirm to ESPN. The CBT hit on the contract is going to be around $46 million, a huge discount for L.A,” he tweeted.
Shohei Ohtani’s $700 million contract calls for him to be paid only $2 million a year for the next 10 seasons, with $680 million deferred until the end of the deal, sources confirm to ESPN.
The CBT hit on the contract is going to be around $46 million, a huge discount for L.A.
— Jeff Passan (@JeffPassan) December 11, 2023
Yes, you read that right.
The AAV (average annual value) of the contract is $70 million per year.
The CBT (Competitive Balance Tax) number will be $46 million, which allows the Dodgers to make more moves and strengthen the roster.
However, Ohtani’s actual salary per year for the duration of the contract will be just $2 million.
The Dodgers will pay him $68 per year for an additional ten years after his contract is up.
It’s a win-win situation.
What do fans think?
Let’s see.
The vast majority of the comments were negative, criticizing the league and the team.
deferring $680M?? This is money laundering.
— Jordan Moore (@iJordanMoore) December 11, 2023
this is actually so bad for baseball oh my god
— internet hall of fame (@InternetH0F) December 11, 2023
HOW IS THAT LEGAL
— IcyVert (@IcyVert) December 11, 2023
This is bad for baseball
— Mike (@ChiSoxFanMike) December 11, 2023
It may sound controversial and even illegal, but the reality of the situation is that there is nothing in the rules that says the Dodgers or Ohtani can’t do what they did.
In fact, any team can do it with any player as things stand.
Perhaps the league and the union will agree to restructure how contracts can be worked out, but for now, it’s just a clever way to manage a payroll.
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