Report: Shohei Ohtani to defer all but $20M of his $700M Dodgers contract until after its completion in 2034
When Shohei Ohtani agreed to his record-breaking, 10-year, $700 million contract with the Los Angeles Dodgers on Saturday, the deal reportedly came with "unprecedented deferrals."
On Monday, we learned what those deferrals entail. Per The Athletic's Fabian Ardaya, Ohtani is deferring all but $2 million per year of his $70 million average annual salary until the contract's conclusion in 2034. That means he won't see $680 million of the salary for more than a decade.
Per the report, the deferred portion of the contract will be paid to Ohtani without interest from 2034 to 2043. The deferrals were reportedly Ohtani's idea. The Dodgers officially announced the signing on Monday, but not the terms.
The payment deferrals will free the Dodgers to spend more around Ohtani as they seek to build a perennial championship contender with the two-way superstar. Per the report, the contract with the deferrals will count for roughly $46 million annually for competitive balance tax (CBT) purposes. The CBT — like the NBA's luxury tax — is a financial penalty for teams that spend above an agreed upon ceiling in any given season. It wasn't immediately clear how that $46 million figure was reached.
Per The Athletic, Ohtani is believed to make $50 million annually in non-baseball income. That on top of his previous endorsement income and the roughly $42 million he made playing for the Los Angeles Angels presumably make it considerably easier for Ohtani to put off receiving $680 million in salary.
The Orange County Register reports that other Dodgers stars have reached similar deferral agreements for considerably less money. Per the report, $57 million of Freddie Freeman's six-year, $162 million deal is deferred from 2028 to 2040. Mookie Betts' 12-year, $365 million contract includes $115 million in deferred salary that will be paid from 2033 to 2044.
The Dodgers aren't expected to stop spending in the wake of Ohtani's deal. They're reportedly pursuing prized Japanese pitcher Yoshinobu Yamamoto, among other free-agent targets.
