When Shohei Ohtani agreed to his record-breaking $700 million contract with the Los Angeles Dodgers last week, the deal reportedly came with "unprecedented deferrals."
On Monday, we learned what those deferrals are. Per The Athletic's Fabian Ardaya, Ohtani is deferring all but $2 million of his annual $70 million salary until it's conclusion in 2034. That means that Ohtani won't see $680 million of the salary for more than a decade.
Per the report, the remainder of the contract will be paid to Ohtani without interest over a span from 2034 to 2043. The deferrals were reportedly Ohtani's idea.
The payment deferrals will free the Dodgers more to spend around Ohtani as they seek to build a perennial championship contender around the two-way superstar. Per report, the contract with the deferrals will count for roughly $46 million annually for competitive balance tax (CBT) purposes. The CBT — like the NBA's luxury tax — is a financial penalty for teams that spend above an agreed upon ceiling in any given season. It wasn't immediately clear how that $46 million figure was reached.
Per The Athletic, Ohtani is believed to make $50 million annually in non-baseball income. That on top of his previous endorsement income and the roughly $42 million he made playing for the Los Angeles Angels presumably makes it considerably easier for Ohtani to put off $680 million in salary.
The Orange County Register reports that other Dodgers stars have reached similar deferral agreements for considerably less money. Per the report, $57 million of Freddie Freeman's six-year, $162 million is deferred from 2028 to 2040. Mookie Betts' 12-year, $365 million contract includes $115 million in deferred salary that will be paid from 2033 to 2044.
The Dodgers aren't expected to stop spending in the wake of Ohtani's deal. They're reportedly pursuing prized Japanese pitcher Yoshinobu Yamamoto among other free-agent targets.
