Shohei Ohtani’s Unprecedented $700 Million Deal with Dodgers Shows Creativity
Phoenix, despite the initial shock of Shohei Ohtani’s record-shattering $700 million, 10-year deal with the Los Angeles Dodgers, details about the contract that emerged were nearly as stunning. A total of $680 million — 97% of the money — was deferred until 2034-43 with no interest. Michael Rueda, head of the U.S. division of sports and entertainment at Withers law firm, said Ohtani-Dodgers deal looks like a solid arrangement, even if there are tradeoffs for both sides. But it’s a reminder that financial circumstances can change when 20 years pass. Former Pittsburgh Penguins superstar Mario Lemieux was out about $26 million in the 1990s when the franchise was in financial trouble and couldn’t pay the money it owed the hockey legend in a deferred deal. Depending on where he lives from 2034-43, that could lead to sizable savings. For purposes of baseball’s luxury tax, the contract is valued as a yearly addition to the Dodgers’ payroll of about $46 million instead of $70 million.ato pursue other free agents. Baseball’s labour contract calls for the deferred money to be set aside by the second July 1 after the season it is earned, at the then-current present-day value discounted by at least 5% annually.