MLB superstar Shohei Ohtani will defer more than 97% of his $700 million, record-setting contract with the Los Angeles Dodgers until after the end of the 10-year term of the agreement, a source familiar with the terms of the deal told CNN on Monday.
The two-time American League MVP will defer $68 million of his $70 million dollars each year, according to the source. The remaining $680 million will be paid to Ohtani beginning after the 2033 MLB season.
“The concept of the extreme deferrals in this contract came from Shohei himself,” the source told CNN. “He had been educated on the implications and process of deferrals and felt it was the right thing to do. So when negotiations were getting near the level where they ended up, Shohei decided he wanted to defer almost all of his salary.
“And remember, since he’s far and away the highest earner in the game off the field, this was an easy decision for him,” the source added.
In a statement announcing Ohtani’s signing Monday night, Dodgers chairman Mark Walter congratulated the player on the “historic contract.”
“Shohei is a once-in-a-generation talent and one of the most exciting professional athletes in the world. Our players, staff, management and ownership look forward to working together with Shohei to help the Dodgers continue to add, improve and strive for excellence on the field,” Walter said.
Ohtani’s motivation to agree to such an unorthodox deal came from a commitment to winning and being “a team player,” according to the source.
By delaying payment of the hundreds of millions of dollars owed to Ohtani, the Dodgers will have more money available to surround the Japanese superstar with other top players.
The team will also benefit from avoiding Ohtani’s full salary contributing towards MLB’s luxury tax threshold. For those purposes, Ohtani’s average annual value will be $46 million instead of the full $70 million, according to the source.
The 29-year-old Japanese phenom, who pitches and bats as a designated hitter, announced his move across town from the Los Angeles Angels – who he played for since 2017 – to the Dodgers on Saturday.
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