The Los Angeles Dodgers inked a deal with Shohei Ohtani, a superstar with an unusual compensation structure, and the ripple effect might cause major changes for the league.
Details of Ohtani’s 10-year, $700 million contract were leaked before the Dodgers’ official announcement of his signing in free agency late Monday night.
According to many sources, Ohtani has decided to postpone the payment of $680 million until after his contract expires, resulting in an average yearly compensation of only $2 million.
Following that, from 2034 to 2043, he will receive an annual salary of $68 million.
There will be some results from this. One perk of having Ohtani play for the Dodgers is that they will avoid paying the luxury tax on his contract.
The Dodgers also agreed to this so they may keep putting pieces around Shohei Ohtani and postpone his otherwise enormous payments.
When Ohtani’s contract expires, he will not be liable for income taxes in California if he relocates.
Sports fans are understandably outraged by the Dodgers’ strategic accounting and Ohtani’s audacious pact.
There are many who believe this arrangement will spell the end for baseball as we know it. The Dodgers’ guile was lauded by others.
The decision to approve Ohtani’s deal will have devastating consequences for baseball, according to one Twitter user. Its precarious position in small and medium-sized markets will be further exacerbated by this. The fact that baseball keeps destroying itself saddens me.
“Embarrassingly bad for the MLB,” another person commented. Excellent news for Ohtani’s agent and himself. It is absolutely ridiculous that MLB allowed this to happen. Leagues will be decimated by this transaction. The gap between franchises will widen in the future. Horrible news for baseball.
“Ohtani killing the sport he was praised for saving is poetry,” another post said.
‘Agents and MLBPA should 100 [percent] be afraid that this becomes typical contract provisions.’ (Another post noted that” these deals set precedents”). Every player isn’t as fortunate as Ohtani when he’s not playing, and it’s reducing the value they receive.
“Everyone is going crаzy over the Shohei Ohtani deal, but the trutҺ is that Los Angeles just made it easier for every other MLB team to keep their star player,” one poster said, praising the Dodgers. No team is worthy of respect if they don’t exploit this weakness.
The collective bargaining agreement ensures that neither MLB executives nor the MLBPA can contest the agreement that Ohtani reached.
The amount of deferred compensation or the percentage of overall salary that can be attributed to it is not limited, as stated in Article XVI of the CBA (as pointed out by ESPN’s Jeff Passan).