Former Los Angeles Angels starting pitcher Shohei Ohtani throws during a baseball game against the Los Angeles Dodgers in Anaheim, Calif., on June 21, 2023. Ohtani agreed Saturday, Dec. 9, to a record $700-million, 10-year contract with the Dodgers.Ashley Landis/The Associated Press
Shohei Ohtani will receive just US$20-million of his US$700-million contract with the Los Angeles Dodgers over the next 10 years, with US$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 US$70-million, according to details obtained by The Associated Press. Of each year’s salary, US$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 US$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 per cent.
Ohtani’s contract, combined with those of Mookie Betts and Freddie Freeman, raises the Dodgers’ total of deferred money owed to the three to US$857-million from 2033-44.