This is one in a series of daily articles highlighting the latest news and notes from the MLB offseason.
Shohei Ohtani’s record-setting contract became official on Monday night when the Los Angeles Dodgers announced the unprecedented deal.
Ohtani is headed some 30 miles north in California from the Los Angeles Angles to the Dodgers on a 10-year, $700 million contract. You’d expect Ohtani to be taking in a massive annual salary over the life of his deal then, right? Wrong.
For the 10 years of his contract, Ohtani will be making a measly $2 million per season. That’s right. The structure of the deal is incredibly unique with heavy deferrals — $68 million in deferrals per season, to be exact. And yes, that is allowed, according to Major League Baseball’s collective bargaining agreement.
I’m not math expert, but that means Ohtani will see $680 million — or over 97% of his salary — spread out from 2034-43. Because of the structure of the deal, the competitive balance tax hit decreases to a much more manageable $46 million per season when taking into account the present-day value of the contract.
Why is the deal set up this way? The Dodgers are now able to spend significantly more money to sign or trade for other players due to better payroll flexibility and a reduced CBT hit. In other words, the Dodgers can more easily build around their elite core of Ohtani, Mookie Betts and Freddie Freeman.
The rich get richer.
Giants, Yankees Meet With Japanese Star
Right-handed pitcher Yoshinobu Yamamoto is looking to become the next Ohtani as a player from Japan seeking stardom in the major leagues. Yamamoto, 25, is arguably the top remaining free agent in this year’s cycle with Ohtani off the board.
According to ESPN’s Buster Olney, the San Francisco Giants met with Yamamoto on Sunday. The New York York Yankees, meanwhile, met with Yamamoto on Monday, per reports.
The Giants, Yankees, Dodgers and New York Mets are amongst the handful of teams who have been linked to the right-hander this MLB offseason.
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