Today: March 02, 2024
Today: March 02, 2024

Ohtani's Dodgers contract has $680 million deferred, lowering tax value to $46 million annually

Share This
Ohtani's Dodgers contract has $680 million deferred, lowering tax value to $46 million annually
December 11, 2023

NEW YORK (AP) — Shohei Ohtani will receive just $20 million of his $700 million contract with the Los Angeles Dodgers over the next 10 years, with $680 million payable from 2034-43 in an unusual structure that gives the team greater payroll flexibility in coming seasons.

Ohtani's record-setting deal, agreed to Saturday, calls for annual salaries of $70 million, according to details obtained by The Associated Press. Of each year's salary, $68 million is deferred with no interest, payable in equal installments each July 1 from 2034-43.

For purposes of baseball's luxury tax, the contract is valued as a yearly addition to the Dodgers' payroll of about $46 million. Under the collective bargaining agreement, for the calculation of a team's tax payroll the value of deferred money is discounted at the federal mid-term rate. For all agreements this offseason, the discounting will be at the October 2023 rate of 4.43%.

Ohtani's deal includes a full no-trade provision and provides for a hotel suite on road trips, a premium luxury suite for home games and a fulltime interpreter.

A unique two-way superstar as both a hitter and pitcher, the 29-year-old Ohtani left the Los Angeles Angels as a free agent to sign with the Dodgers in a deal they announced Monday night.

“Dodger fans, thank you for welcoming me to your team,” Ohtani said in a statement released by the club. “I can say 100 percent that you, the Dodger organization and I share the same goal — to bring World Series parades to the streets of Los Angeles.”

Ohtani's contract, combined with those of Mookie Betts and Freddie Freeman, raises the Dodgers' total of deferred money owed to the three to $857 million from 2033-44.

Betts has a $365 million deal covering 2021-32 that includes $115 million in deferred salaries payable from 2033-44 and has the final $5 million of his signing bonus payable from 2033-35.

Freeman has a $162 million, six-year deal for 2022-27 that includes $57 million in deferred money payable from 2028-40.

Los Angeles' high points of the deferred payments are 2038 and '39, when the trio will be owed $83 million, and 2040, when they will be due $84 million.

By receiving the vast majority of the money when he presumably will not be living in the United States, Ohtani also figures to have a tax benefit. California's top tax rate for residents is 13.3%.

The two-time AL MVP has a string of endorsement deals that significantly add to his earnings beyond his baseball salary.

“On behalf of the L.A. Dodgers and our fans everywhere, we welcome Shohei Ohtani to the Dodgers, the home of Jackie Robinson, Sandy Koufax and Hideo Nomo, three of the sport’s most legendary and pathbreaking players,” said Mark Walter, chairman of the Dodgers and Guggenheim Baseball. “Shohei is a once-in-a-generation talent and one of the most exciting professional athletes in the world."

Ohtani’s total dollars are 64% higher than baseball’s previous record, a $426.5 million, 12-year deal for Angels outfielder Mike Trout that began in 2019.

His $70 million average salary is 62% above the previous high of $43,333,333, shared by pitchers Max Scherzer and Justin Verlander with deals they struck with the New York Mets. Ohtani’s average salary nearly doubles the roughly $42.3 million he earned with the Angels. It also exceeds the entire payrolls of Baltimore and Oakland this year.

However, for the luxury tax he will count only slightly more than Aaron Judge, who is a $40 million annual charge to the Yankees' payroll as he enters the second season of a $360 million, nine-year contract.

“Shohei Ohtani is a generational player and it was an honor to watch him make history throughout the six seasons he spent in an Angels uniform,” the Angels posted on X, the social media platform formerly known as Twitter.

“We feel extremely fortunate that Angels fans were able to witness him redefine what is possible in our sport. We thank Shohei for his many contributions to our franchise and the game of baseball. We wish him the best during the next chapter of his career.”




Two buildings damaged, people evacuated after 'incident' in Russia's St Petersburg, governor says

ST PETERSBURG (Reuters) - Two buildings were damaged and people were evacuated in Russia's St Petersburg on Saturday morning after local residents reported a loud explosion that blew out windows.

Oregon lawmakers pass bill to recriminalize drug possession

The Oregon Legislature has passed a bill that recriminalizes the possession of small amounts of drugs

Powerful storm in California and Nevada shuts interstate and dumps snow on mountains

A powerful blizzard is dumping snow in the Sierra Nevada as gusty winds and heavy rain hit lower elevations

Last surviving member of the first team to conquer Mount Everest says it is crowded and dirty now

The only surviving member of the mountaineering expedition that first conquered Mount Everest says the world’s highest peak is too crowded and too dirty and the mountain is a god that needs to be respected

A party like no other? Asia's richest man celebrates son's prenuptials with a star-studded bash

Tycoons from around the world, heads of state, as well as Hollywood and Bollywood stars have descended on the small western Indian city of Jamnagar where billionaire industrialist Mukesh Ambani is kickstarting a big fat wedding celebration for his youngest son

Haruki Murakami unveils his new short story at a Tokyo literary event

Only 1,100 lucky audience members were there to hear the yet-to-be published short story “Kaho,” read aloud by bestselling Japanese author Haruki Murakami himself


Giannis Antetokounmpo has 46 points, 16 rebounds in Bucks' 113-97 victory over Bulls

Giannis Antetokounmpo dominated with 46 points and 16 rebounds and the Milwaukee Bucks beat the Chicago Bulls 113-97 on Friday night

Alaska's Iditarod dogs get neon visibility harnesses after 5 were fatally hit while training

The Iditarod, the annual sled dog race celebrating Alaska’s official state sport, is set to get underway Saturday with a new focus on safety after five dogs died and eight were injured in collisions with snowmobiles while training

Raptors star Scottie Barnes out indefinitely with broken middle finger on left hand

Toronto Raptors star Scottie Barnes will be sidelined indefinitely after he broke the middle finger on his left hand during the first half of Friday night’s loss to Golden State

Celtics overcome Doncic's triple-double to beat Mavericks 138-110 for 10th straight win

Jayson Tatum made five 3-pointers and scored 32 points and the Boston Celtics overcame Luka Doncic’s second straight triple-double to beat the Dallas Mavericks 138-110 and extend their season-best winning streak to 10 games

- Advertisement -
Advertisement: Limited Time Offer