Evaluating Shohei Ohtani's Historic, Record-Setting Contract and What it Means for the MLB Going Forward

28 million MLB baseballs. Two 100-meter superyachts. The Carolina Hurricanes franchise. Those are just some of the few things Shohei Ohtani can purchase with his newly signed deal. The Shohei Ohtani sweepstakes came to an end on December 9th, as the Los Angeles Dodgers signed the superstar to a 10 year, $700 million megadeal. This was not only the largest contract in the history of the MLB, but the most lucrative deal ever in North-American sports.  


However, this is not the typical deal, as Ohtani decided to defer $680 million to be paid out to him between 2034-2043, while he will only take a $2 million salary per year for the duration of his ten-year deal.  This will effectively allow the Dodgers to continue to build a superteam for the foreseeable future with the money they will save on Ohtani for the next ten years.  With this in mind, let’s take a look at how this record-setting contract will impact the Dodgers and the MLB going forward…


1. The Dodgers are All-In For the Next Ten Years (But With a Murky Future)


This contract is record-setting in multiple facets, with the most obvious being the $700 million that Shohei will eventually receive.  The structure of this deal also draws a ton of attention, as it is a big risk by the Dodgers organization.  Yes, for the next ten years they will be paying arguably the best player in baseball like he is a reserve player, but once the Ohtani era ends, the immediate future is very murky.


“...Ohtani’s contract will inevitably cause headaches.  Even as rich as they are, it won’t be easy for the Dodgers to build contenders around him while he’s taking up so much payroll every year,” said Zachary D. Rymer, a writer for Bleacher Report.  “Especially not if age and an eventual outfield gig chip away at his value.”


But don’t worry, Dodger fans. 2034 is still long down the road and this organization projects to be in prime shape and will ultimately be perennial World Series contenders for around a decade’s time. With Los Angeles boasting this star-studded lineup–highlighted by Shohei Ohtani in addition to the “supporting cast” of Mookie Betts and Freddie Freeman–this is going to be a hard team to stop come October.


“They’ve pulled a coup, and their fans will get to watch one of the most exciting athletes ever for the next decade,” said Alex Kirshner, a writer for Slate.


2. Are Deferred Contracts About to Become More Popular?


This can go both ways, as it will really depend on a team’s situation and current roster.  In the case of the Dodgers, it is worth the risk as they are already a top-notch team.  They get to add Ohtani, but also get to keep building their roster due to the extreme discount they have on him for the next decade.


This unprecedented move by Ohtani allows the Dodgers to have maximum spending flexibility during the duration of his contract with them,” said Matt Levine, a writer for Sports Illustrated.  He was stuck in mediocrity for years with the Los Angeles Angels, and this is his way of making sure that didn't happen again.”


This Ohtani deferred contact is definitely not the first time players have deferred money in their contracts, but due to the talent he possesses and the price the Dodgers get him at (for this ten year span), this may become a more prevalent strategy among the big name, big money franchises.


3. Ohtani’s Deal Resets the Market


Despite the fact that Ohtani will only receive $20 million over the next ten years, he will still rake in $700 million at the end of the day, not to mention what he will be making from endorsements and brand deals.  A contract of this magnitude makes players and their agents around the league analyze this and up their asking price, such as Juan Soto, Yoshinobu Yamamoto, and many more for years to come.


Projections indicated the likely contract for Yamamoto would be slightly north of $200 million,” said David Rooney, a writer for Clutch Points. “However, with Ohtani signing such a massive deal, it is certainly possible that Yamamoto‘s agent may up the asking price, seeking a deal north of $250 million, even potentially approaching the $300 million mark.”


Yamamoto would end up receiving $325 million from the Dodgers, and the same goes for Soto. With Scott Boras as his agent, it is almost a guarantee that he will take him to the free agent market following the upcoming season so that he can negotiate his contract with all 30 MLB teams.  Going forward though, this Ohtani deal sets the standard for what it takes to acquire a unicorn like himself, but as billionaire Richard Branson once said, “Records are meant to be broken.”


Photo Credit

Header: ESPN

Thumbnail: CNBC

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