Four days later, the reverberations are still being felt.
People knew that free agent baseball star Shohei Ohtani was going to get a record contract this offseason, which was understandable given he is arguably the best all-around player ever when considering his batting and pitching statistics.
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But $700 million over 10 years? That figure still stunned many.
However, what further stunned people was news on Monday that Ohtani has decided to defer $680 million of the contract until after his playing days are over, meaning he’ll take in roughly $2 million of salary each year for the duration of the contract that will run through 2033.
That might seem absurd for a player of Ohtani’s stature to essentially be taking close to the league minimum, but it actually is brilliant from Ohtani’s perspective.
From a player’s perspective, the contract might end up being the model that other pro athletes want to emulate in the future.
The biggest reason is taxes. If Ohtani were going to make an average of $70 million a year for the next 10 years as would usually be the case, he would have to fork over $34.19 million in taxes, according to according to sportskeeda. He would owe $25.9 million in federal taxes, $4.65 million in California state taxes, a $2 million jock tax and $1.64 million in FICA/Medicare taxes.
Instead, Ohtani will be paying much less in taxes at $2 million a year. When his playing days are over, he can relocate to a much tax-friendlier place than California while collecting his remaining $680 million.
In addition, Ohtani will end up making far more than $2 million a year over the next 10 years anyway. No doubt, he’ll rake in way more than that in endorsements and other perks playing in the large Los Angeles market.
Preferring deferred money is nothing new for professional athletes who like to make sure they are still getting income long after their playing days are over.
Of note, the Dodgers also owe deferred money to current players Mookie Betts and Freddie Freeman. Betts will be owed a total (not each year) of $115 million from 2033 to 2044, while Freeman is owed a total of $57 million from 2028 to 2040.
From 2034 to 2040, the Dodgers will paying out nearly $83 million a year for players who likely will be retired.
But something like Ohtani’s deal is definitely unprecedented, and it might end up being the new standard for how future big-time professional athletes want to have their contracts structured, as long as there is an organization with deep enough pockets to pull it off.
How does it compare to other jackpot contract for athletes around the world?
Here are the athletes who currently have the biggest contracts other than Ohtani:
| Athlete | Sport | Team | Contract |
|---|---|---|---|
| Cristiano Ronaldo | Soccer | Al Nassr | $536 million, 2 years |
| Patrick Mahomes | Football | Kansas Citiy Chiefs | $450 million, 10 years |
| Karim Benzema | Soccer | Al-Ittihad | $436 million, 2 years |
| Mike Trout | Baseball | Los Angeles Angels | $426 million, 12 years |
| Carlos Alvarez | Boxing | Premier Boxing Champions | $365 million, 5 years |
How does Ohtani’s contract compare with others in baseball?
As mentioned above, former teammate Mike Trout is the now the second-highest paid player in baseball since he is in the middle of a 12-year, $426 million deal.
Behind him is Mookie Betts of the Dodgers ($365 million, 12 years), Aaron Judge of the New York Yankees ($360 million, 9 years), Manny Machado of the San Diego Padres ($350 million, 11 years) and Francisco Lindor of the New York Mets ($341 million, 10 years).