Shohei Ohtani to be paid only $2 million a year initially under massive $700M deal

KABC logo
Tuesday, December 12, 2023
Most of Shohei Ohtani's $700M contract with Dodgers to be deferred
Shohei Ohtani will take only $2 million a year from the Dodgers over the course of his new $700 million contract, with the rest to be deferred until the end of the 10 years.

LOS ANGELES (KABC) -- The enormous total dollar amount of Shohei Ohtani's deal with the Dodgers - $700 million over 10 years - wasn't the only shocker to come out of that contract news.

Now ESPN is reporting that most of Ohtani's salary will be deferred until the end of his contract.

He will only receive $2 million a year over the next decade, while the rest will be paid in installments between 2034 and 2043, the network reported.

As a result, the Dodgers will free up money to obtain and retain other top players on the roster, while facing a smaller potenial hit from MLB's luxury tax. The league does partially count deferred payments under roster formulas, so Ohtani will cost the team $46 million a year toward that calculation.

Ohtani agreed to the unprecedented deal with the Dodgers last week, after a feverish free-agent period for a player considered one of the best to ever play the game.

The $700 million total contract was 64% higher than baseball's previous record, a $426.5 million, 12-year deal for Ohtani's former teammate, Angels outfielder Mike Trout, that began in 2019.

His new average salary of $70 million - though deferred - is not quite double the amount he earned per year with the Angels, $42.3 million.

As ESPN noted, in addition to his baseball salary, Ohtani makes a substantial amount of money, estimated at $45 million a year, through endorsements and other off-field activities.

The deferred payments were said to be his idea.

Another expected benefit could be huge savings in taxes. If Ohtani is not living in the United States - or especially in California - at the time of the payments, he would likely save big on his tax bills. California's top tax rate for residents is 13.3%.

The Dodgers have previously signed deferred-payment deals with other superstars on the current roster. Mookie Betts has a deal for 2021-32 that totals $365 million, which includes $115 million in deferred money paid from 2033-2044 plus the final $5 million of his signing bonus payable from 2033-35.

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

Combined, the Ohtani, Freeman and Betts contracts will cost the Dodgers $857 million in deferred payments from 2033-44.

ESPN and The Associated Press contributed to this report.