Maybe the deferral idea is there's a net present value calculation for CBT purposes. meaning something like Ohtani gets $275 million in actual dollars 15-20 years from now, but the NPV is an amount less than that for CBT calculations?
Shohei Ohtani is an LA Dodger: 10 years/$700 million
- Thread starter RedOctober3829
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Exactly, it might let the Dodger cash flow be OK (do they need it?) but it's still 70M against the CBT for the next 10 seasons, unless there's a new Ohtani rule.
$700 million is tremendous. Good for Ohtani. One of the best athletes in the world and should be paid accordingly.
You know what's great about this? We'll get to see Shohei competing for championships. This is so good for the sport. The salary will only add to the drama. Every start, every at bat will be must watch.
Given the size of this contract can Dave Roberts really be associated most with a steal now?
Did Ohtani sign with LA or LIV?
Is the dog named Bluey?
This contract is the richest in team sports and auto racing in history by total funds with a confirmed citation and source. Ever. It surpasses Lionel Messi’s $674M (USD) deal with FC Barçelona from 2017-2021.
Did Ohtani sign with LA or LIV?
Is the dog named Bluey?
This contract is the richest in team sports and auto racing in history by total funds with a confirmed citation and source. Ever. It surpasses Lionel Messi’s $674M (USD) deal with FC Barçelona from 2017-2021.
Max Scherzer's $30m AAV on the Nationals contract was actually counted as $28.67m toward the CBT because the deferrals didn't include interest and thus devalued the contract, basically.
I have the same question as with Soto... can he pitch?
Because at the moment, it's Buehler, Miller, Pepiot, Yarborough, Sheehan (Gonsolin: TJS, Dustin May: flexor)
And after Betts (31), Freeman (34), Ohtani, its Will Smith, Muncy, Outman, Taylor, Hayward, Lux
Because at the moment, it's Buehler, Miller, Pepiot, Yarborough, Sheehan (Gonsolin: TJS, Dustin May: flexor)
And after Betts (31), Freeman (34), Ohtani, its Will Smith, Muncy, Outman, Taylor, Hayward, Lux
Nice work if you can get it and he did.
That being said, wow, it's a lot of money tied to one player with no guarantees of him ever being able to pitch at a high level ever again. Unless he hits .400 and the Dodgers are perennial WS Champs, I don't see how this is good for The Game. However, it surely reminds you of how much money these organizations really have.
That being said, wow, it's a lot of money tied to one player with no guarantees of him ever being able to pitch at a high level ever again. Unless he hits .400 and the Dodgers are perennial WS Champs, I don't see how this is good for The Game. However, it surely reminds you of how much money these organizations really have.
Per your post and a couple others, it would seem there could be some benefit to the deferred money depending on the interest but let's be real, even if it goes from 70 to 60 or 65....
Sorry for changing my post on you. That was my understanding, too, but after reading the article apparently that isn't right, otherwise Freeman's AAV should be around $21m not $27m.
It depends on how big the deferral is and what the MLB lets you use for the interest rate. If it’s like prime plus 1, that’s pretty big.
Imagine the deal was $20 million a year for 10 years and $500 million in year 11. This year’s CBT hit would be well under $50 million, and each year would be a bit more.
Henry and co. bought the whole Red Sox franchise for $380 million 21 years ago. The world has gone screwy.
Good for the Dodgers. Selfishly, living here in LA I'm glad he will be here essentially the rest of his career.
A few things come to mind.
1. This is probably some version of the Mookie contract (x2). Mookie's deal was heavily deferred and the 365M total was valued at 306M by the players union. I would guess this one is in the 600M range (or less) when all is said and done.
2. The Dodgers got a "deal" compared to where the market would have been without the late season elbow injury. I bet it would have been at least in the 800M range without that. Of course, lots of risk on the pitching side of things now.
3. Speaking of that, if we say this deal is actually around 600M after the deferral situation, they probably value him at around 450-500M as a hitter. Then an extra 100-150M as a pitcher. The pitching side of things could be a bargain or basically lit on fire. They certainly don't know if it will be one of those 2 options, or something in between. Going to be interesting to watch it play out.
A few things come to mind.
1. This is probably some version of the Mookie contract (x2). Mookie's deal was heavily deferred and the 365M total was valued at 306M by the players union. I would guess this one is in the 600M range (or less) when all is said and done.
2. The Dodgers got a "deal" compared to where the market would have been without the late season elbow injury. I bet it would have been at least in the 800M range without that. Of course, lots of risk on the pitching side of things now.
3. Speaking of that, if we say this deal is actually around 600M after the deferral situation, they probably value him at around 450-500M as a hitter. Then an extra 100-150M as a pitcher. The pitching side of things could be a bargain or basically lit on fire. They certainly don't know if it will be one of those 2 options, or something in between. Going to be interesting to watch it play out.
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I would say if he doesn't come back as a dominant pitcher, there is no way that this will look like a bargain.
Depending on how big of a chunk of his salary is deferred and how long it could "drastically" reduce the value of the contract
I remember when Yaz got 100,000 and how amazing that was.
STAGGERING, BUT glad for him, and thank GAWD he didnt go to the Yankees.
Now the pins will start falling, probably some major signings announced today.
Feel badly for Canadian fans.
As someone said what if his arm was healthy? 1 Billion dollar contract?
Aaron Judge 40 Million? Pfffft. Mookie Betts ?? Pffft. Kevin Garnett? Jaylen Brown.?
Approaching Soccer players, and Racecar drivers.
STAGGERING, BUT glad for him, and thank GAWD he didnt go to the Yankees.
Now the pins will start falling, probably some major signings announced today.
Feel badly for Canadian fans.
As someone said what if his arm was healthy? 1 Billion dollar contract?
Aaron Judge 40 Million? Pfffft. Mookie Betts ?? Pffft. Kevin Garnett? Jaylen Brown.?
Approaching Soccer players, and Racecar drivers.
Yep. The details will be really interesting. The $700 million number seems really high. We need to know the actual structure.
The crazy part - is IF (a BIG IF) he stays healthy the entire contract they make it back... imagine the stadium every night with people wearing the jerseys.
I'd be the first one to kill the Red Sox ownership if Ohtani signed with a club other than the Dodgers or a west coast team. The fix was in as I don't believe Ohtani wanted to leave the West Coast. Now if the Sox don't get Yahamoto or one of the prized pitchers, I'll join the bandwagon carrying pitchforks, tar and feathers to Fenway
Yeah, this not being 12/$700m is the weirdest part to me.
Not a bad guess from Abbey back in June...
Not a bad guess from Abbey back in June...
Yamamotos agents will surely look for 400 million now. Doesn’t mean they will get it but you have to pursue it if you’re the agent. Especially with both NY teams lusting after him and the desperate Giants and a few other big market teams like the Sox.
Well, if he wasn’t gonna sign with the Sox (and he wasn’t), I guess having him play two miles from my house is a decent option.
Pour one out for the Angels fans who thought they had a chance of keeping him. And, yes, they were out there. “Ownership just needs to show him they’ll surround him with a winning team.” It’s gonna be a rough stretch down Anaheim way…different kind of rough from the stretch they just finished.
Pour one out for the Angels fans who thought they had a chance of keeping him. And, yes, they were out there. “Ownership just needs to show him they’ll surround him with a winning team.” It’s gonna be a rough stretch down Anaheim way…different kind of rough from the stretch they just finished.
Or the hands down worst contract ever if/when he isn't one of the exceptions at seeing a notable post-30yo decline in production, and isn't even still pitching by then for the sake of extending the totality of his career.
Now I’m really curious what interest rates clubs get to use for discounting the AAV when there are interest free deferred payments. It could be a market inefficiency.
A player could value a contract at $600 million and be willing to take it. A club maybe could also value it as $600 million. Maybe the Dodgers invest in t-bills today to fund the deal and so they are out of pocket $600 million. But if they can book a higher interest rate to calculate CBT, it’s a bit of a boondoggle.
In other words, what matters to the player is their PV calculation. What matters to the super rich teams is how much they can discount for AAV calculations. If there is a delta, this is a great technique.
A player could value a contract at $600 million and be willing to take it. A club maybe could also value it as $600 million. Maybe the Dodgers invest in t-bills today to fund the deal and so they are out of pocket $600 million. But if they can book a higher interest rate to calculate CBT, it’s a bit of a boondoggle.
In other words, what matters to the player is their PV calculation. What matters to the super rich teams is how much they can discount for AAV calculations. If there is a delta, this is a great technique.
