Shohei Ohtani Will Defer Nearly All of His Dodgers Salary

Over this past weekend, Shohei Ohtani and the Los Angeles Dodgers agreed to a record-breaking 10-year, $700 million contract. The two-way superstar instantaneously became the most expensive superstar in MLB history.

But did you really think Ohtani would quietly put pen to paper and that’d be the last we’d hear about it?

Think again.

Shortly after news broke via Ohtani’s announcement on Instagram, ESPN’s Jeff Passan posted on X that the contract would include “significant deferrals.” Until Monday, it was unclear what the monetary value of those deferrals would be.

According to Fabian Ardaya of The Athletic, Ohtani is set to defer a whopping $68 million per year in his new contract. That means he’ll be making just $20 million over the next ten years. Baseball’s top talent is now the most expensive and inexpensive superstar at the exact same time.

Ardaya notes that the money will only be deferred throughout the life of the contract. Once the 10 years are up, the Dodgers will be on the hook for $680 million, bringing the total up to $700 million. The money will be paid out interest-free from 2034 to 2043.

This unique method is Ohtani’s way of allowing the Dodgers some additional financial flexibility. Throughout the 10 years of his deal, the club will only have to pay him $2 million per season, which is pocket change in modern-day baseball. Again per Ardaya, the Japanese phenom already is said to make around $50 million per year in endorsements and off-the-field ventures, so it’s easy to see why he’s comfortable with the deferred money.

Now, the club has more room on the payroll to further add to its already video game-like roster. Hilariously, Ohtani will only be the 17th-highest-paid player on his own team.

Los Angeles Dodgers players, ranked in order of expected salary in 2024:

1) Betts
2) Freeman
3) Taylor
4) Muncy
5) Heyward
6) Smith
7) Buehler
8) Kelly
9) Rojas
10) Yarbrough
11) Barnes
12) Gonsolin
13) Phillips
14) Graterol
15) Ferguson
16) May
17) Ohtani

— Jeff Passan (@JeffPassan) December 12, 2023

What Will the Dodgers Do with All This Extra Money?

It’s worth noting that this mega-deal will still count around $46 million a year towards the luxury tax threshold, but the structure of the contract certainly allows the Dodgers much more flexibility.

With said flexibility, the Dodgers plan to pursue the likes of Yoshinobu Yamamoto, the best-available starting pitcher this offseason. Other top-tier starters like Blake Snell and, to a slightly lesser extent, Jordan Montgomery, would also fit the mold.

Tyler Glasnow of the Rays, who is currently owed $25 million in what will be his final year before free agency, is also on the club’s radar. Unlike Yamamoto and Snell, Glasnow would need to be acquired via trade. The Dodgers have some tradeable prospects like Miguel Vargas and a number of young hurlers, so the fit is absolutely there.

Dylan Cease of the White Sox is another player that figures to be firmly on the Dodgers’ radar. At this point, the club essentially has free rein to pursue and pay for any player they wish.

Wait a Second, Is This Even Legal?

Surprisingly, yes, what Ohtani and the Dodgers are doing here is perfectly legal. Shockingly, there have been no firm rules established that put a cap on deferrals.

According to Lindsey Adler of The Wall Street Journal, Major League Baseball has proposed limiting deferrals in the past, but to no avail. She goes on to say that the MLBPA believes deferrals allow players flexibility, which isn’t wrong.

For anyone wondering if MLB will challenge or cancel Ohtani's contract: The answer is unequivocally no. There is a specific article in the collective-bargaining agreement that addresses this. And it's very clear: Deferred money is limitless — even $680 million of $700 million. pic.twitter.com/DGNK0JulED

— Jeff Passan (@JeffPassan) December 11, 2023

There is a certain level of humor in all of this. The Dodgers have long been known as a team that can afford whoever they want, whenever they want. At this point, that’s just the “norm.” If other teams did such a thing, there’s a high likelihood that it would be frowned upon.

All there is left to say at this point is, “Dodgers gonna Dodger.” Ohtani has set himself – and the team – up for long-term success here, and you can’t fault him for wanting to (finally) play for a winner.