Shohei Ohtani is an LA Dodger: 10 years/$700 million

[Margo McCready]

I want to make the postseason all teams that win 90 games or more and only those teams, no matter how many or few that is each year. That would be a start, a team that can't win 90 games should not be eligible to be champions. I also would like to dump divisions and just seed by record within each league, but since none of this is going to happen, I will continue to lose interest in the MLB postseason once my team's not in it anymore.

Holy smokes, what makes baseball beautiful and important is that (as if other sports have anything as awesome as the duel between pitcher and hitter PLUS anything as cool as the concept of base running PLUS anything as cool as the concept of fielding) unlike most football and basketball games, you *actually have to watch the goddamn game to see who wins*. So sure, the more teams allowed into the postseason, the greater the chances a shitty team wins the World Series. At the same time, if Aaron Judge sported a ring or two, I’d bet a ton of money that a World Series championship would be SUPER legitimate to you.

 

[jon abbey]

At the same time, if Aaron Judge sported a ring or two, I’d bet a ton of money that a World Series championship would be SUPER legitimate to you.

Eh, I'd be happy for him and the team, but really you don't know me so don't assume.

 

[jon abbey]

So to bring it back to Ohtani, I don't think the success or not of this contract will be measured in postseason success for the team, I think it'll be measured in how healthy he is and how long he can keep up his superhuman levels of performance. I will be very very surprised if LAD ends up regretting it, titles or not.

 

[Manuel Aristides]

My apologies if someone else posted this, too many pages to wade through them all, but was playing around on Cot's last night looking at TBR salaries...

To my eyes, Tampa Bay has never had a ten year period where they paid out $700m. Ohtani will make more over the course of his deal than any group of Tampa Bay Rays has ever made over ten years (active roster only). The real question will be if they exceed $700m over the next ten years. Probably yes; the payroll has been a tick over 70m the last five or so. But it will be close: presumably with endorsement money Ohtani could out-earn all 26 Rays over the next decade. Kind of wild.

 

[Bongorific]

They are now the betting favorites to win it all per Draft Kings so you’ll have opportunities to go the other way.

The future odds are not the book’s estimate of LA’s probability to win the WS, but rather its prediction of the market’s estimate of the probability LA will win the WS.

 

[BigSoxFan]

The future odds are not the book’s estimate of LA’s probability to win the WS, but rather its prediction of the market’s estimate of the probability LA will win the WS.

Yes, I know how betting works.

 

[Traut]

I love everything about this move.

Ohtani is one of the best to play the game. He is an international star. His value to the Dodgers transcends whatever he does on the field.

Los Angeles is the right market for him. It’s good for him, MLB, and the Dodgers.

It also exposes the Sox ownership for what they are. They are Rays wannabes.

Good on John Henry that he can save a few bucks this year. He was smart to buy the Sox for what he paid for it.

I love seeing a big market team play big. It makes baseball interesting.

I hope Henry sells and the Sox start swinging for the fences again. As it is, they have been terribly boring. I hate boring.

 

[axx]

I don't think there's any way the Dodgers will regret it with the marketing that's going to happen, the only thing would be if he both falls off a cliff as a hitter before year... 3? And he can't pitch again.

I can't imagine the marketing $$$ would be that much to where LA would make $700M off of it in 3 years. Ohtani has to end up in the HoF for it to be worth it, I think.

 

[Frisbetarian]

Short series are effectively a crapshoot for the most part. Statistically a 97 win team playing an 81 win team will lose ~3 of every 10 times in a 7 game series. That does change, however, with “great” teams. A 110 win team playing an 81 win team would be expected to win around 7 of 8 times in a 7 game series.

 

[Montana Fan]

Short series are effectively a crapshoot for the most part. Statistically a 97 win team playing an 81 win team will lose ~3 of every 10 times in a 7 game series. That does change, however, with “great” teams. A 110 win team playing an 81 win team would be expected to win around 7 of 8 times in a 7 game series.

I’d be interested to know what the odds are that three, 100 win teams, go 1-9 in the playoffs.

IMO the MLB playoffs are a mess. Every team should be playing right out of the gate in the postseason and only 4 teams should make the postseason from each league.

 

[Bongorific]

I love everything about this move.

Ohtani is one of the best to play the game. He is an international star. His value to the Dodgers transcends whatever he does on the field.

Los Angeles is the right market for him. It’s good for him, MLB, and the Dodgers.

It also exposes the Sox ownership for what they are. They are Rays wannabes.

Good on John Henry that he can save a few bucks this year. He was smart to buy the Sox for what he paid for it.


I love seeing a big market team play big. It makes baseball interesting.

I hope Henry sells and the Sox start swinging for the fences again. As it is, they have been terribly boring. I hate boring.

I like this. I hate it’s the Dodgers but this is all true. The MFY trade for Soto and are ready to have him and Judge locked up. The Jays seem like they were legitimate finalists for Ohtani which means they were probably ready to spend at least $500m. The O’s development pipeline is finally coming to fruition. And the Sox just middled it instead.

 

[DeadlySplitter]

Welp.

View: https://twitter.com/jonbecker_/status/1733855098231566806

 

[DeadlySplitter]

Also more John Henry bashing when Ohtani was never leaving LA... can we hold off on that until we miss out on Yamamoto, at least?

 

[BornToRun]

I said they would be the best team in baseball for the next 10 years, not the team with the most championships. And they will be, even if they never win the World Series in that span.

And they’ll be a complete laughing stock if that ends up happening. Deservedly so. We all know the playoffs are a crapshoot but that’s how you get the ultimate prize, fair or not, and I wouldn’t have it any other way.

 

[Murderer's Crow]

Welp.

View: https://twitter.com/jonbecker_/status/1733855098231566806

apologies to @AlNipper49 for my errors on the AAV. Resolved near the first page but this is a staggering difference I did not expect.

 

[glennhoffmania]

40 years? That's kind of insane.

 

[DeadlySplitter]

40 years? That's kind of insane.

IT's just a guess at the moment what the deferred schedule is. Rosenthal and/or Passan will report on it when the deal is official, I imagine.

 

[brandonchristensen]

So what is stopping teams from loading up on huge contracts but deferring them down a ton to avoid Luxury Tax? This seems very exploitable, especially when inflation makes the long-term money smaller than it is now.

 

[jon abbey]

So what is stopping teams from loading up on huge contracts but deferring them down a ton to avoid Luxury Tax?

Players agreeing to it?

 

[DennyDoyle'sBoil]

So what is stopping teams from loading up on huge contracts but deferring them down a ton to avoid Luxury Tax? This seems very exploitable, especially when inflation makes the long-term money smaller than it is now.

Because players/agents are not dumb. They know that, without interest, a dollar in 2060 is worth only a fraction of what it is worth today. And so when they negotiate, they can do a PV analysis like anyone else to compare offers.

It looks as though Ohtani did not sign anything close to a $700 million contract. He signed a $500 million contract, or something like that. Presumably, he is not stupid and knew this. And that is all the Dodgers should have to pay tax on.

I am as surprised today about how low this contract is as I was surprised yesterday how high it was. If it really is $300,000,000 deferred 40 years, it is worth far less than $700m.

Think of it this way. If the Blue Jays had offered $600m/10, no deferred, it would have been a better offer and Ohtani should have viewed it that way. Whether other factors were important, who knows?

 

[Frisbetarian]

I’d be interested to know what the odds are that three, 100 win teams, go 1-9 in the playoffs.

Approximately 1 out of 1600.

IMO the MLB playoffs are a mess. Every team should be playing right out of the gate in the postseason and only 4 teams should make the postseason from each league.

I agree.

 

[Petagine in a Bottle]

The Dodgers won 100 games, but by the time the playoffs started, they weren’t the same team. A lot of the players who were key to them getting that many wins were injured or unavailable. That needs to somehow be factored into the calculus, doesn’t it?

 

[DennyDoyle'sBoil]

The Dodgers won 100 games, but by the time the playoffs started, they weren’t the same team. A lot of the players who were key to them getting that many wins were injured or unavailable. That needs to somehow be factored into the calculus, doesn’t it?

Yeah, the assumption that a team that was .650 in the regular year is a team 65 percent likely to win at the snapshot in time that is the playoffs is faulty — obviously. We saw it this year. The hot wild card team is a thing in all sports. Every team goes on streaks and lulls and sometimes these happen in June and sometimes in October.

 

[radsoxfan]

IT's just a guess at the moment what the deferred schedule is. Rosenthal and/or Passan will report on it when the deal is official, I imagine.

If that's just a guess I have to imagine it's stretched out way more than reality. Massive deferrals means a lot of the $ deferred, but I kinda doubt he has a contract that goes until 2063.

If the AAV gets down to 43M/year, that means he essentially signed a 10/430M deal. It sounds like he could have done much better than that, so unless he just only wanted to pay for the Dodgers and gave them a huge discount, it makes no sense (or his agents got totally clowned).

My blind guess is that the deferrals will be big, but at least most of them not stretched out nearly that far and the AAV will effectively be in the 50-60M/year range.

 

[Van Everyman]

So to bring it back to Ohtani, I don't think the success or not of this contract will be measured in postseason success for the team, I think it'll be measured in how healthy he is and how long he can keep up his superhuman levels of performance. I will be very very surprised if LAD ends up regretting it, titles or not.

The thing that kind of sucks about this, as a fan of the game, is that I kind of want this kind of egregious and ostentatious overspending to fail but I also know Ohtani being hurt and sucking would be bad for the game and our enjoyment of it.

 

[John Marzano Olympic Hero]

And they’ll be a complete laughing stock if that ends up happening. Deservedly so. We all know the playoffs are a crapshoot but that’s how you get the ultimate prize, fair or not, and I wouldn’t have it any other way.

A laughingstock? If my team shelled out $700m for THE best player in baseball, I wouldn’t be laughing at them. I’d be insanely happy.

Watching Ohtani every game for the next 1600+ games is a gift. The Dodgers understand what baseball is and I think that’s amazing.

The Henry FO are reaping what they’ve sewn for the boring ass team that has been rolled out over the last two years. At least LA fans can say that their franchise is trying.

 

[Euclis20]

The thing that kind of sucks about this, as a fan of the game, is that I kind of want this kind of egregious and ostentatious overspending to fail but I also know Ohtani being hurt and sucking would be bad for the game and our enjoyment of it.

They can fail without Ohtani getting hurt or sucking. I'm perfectly happy with them averaging 100 wins over the next decade as long as they continue to flame out prior to the WS in ugly fashion to inferior teams. I understand very well (and even agree with) Abbey's take that postseason success has been greatly devalued with the increased number of playoff teams, but I have enough Dodgers fans in my life to also know that they will absolutely see this as a failure if they don't win at least one WS with Ohtani.

 

[DeadlySplitter]

If that's just a guess I have to imagine it's stretched out way more than reality. Massive deferrals means a lot of the $ deferred, but I kinda doubt he has a contract that goes until 2063.

If the AAV gets down to 43M/year, that means he essentially signed a 10/430M deal. It sounds like he could have done much better than that, so unless he just only wanted to pay for the Dodgers and gave them a huge discount, it makes no sense (or his agents got totally clowned).

My blind guess is that the deferrals will be big, but at least most of them not stretched out nearly that far and the AAV will effectively be in the 50-60M/year range.

Passan put out there it is probably in the 40s. "Unprecedented" deferrals at "below-market" interest rates on the "majority" of the contract, all Ohtani-driven. I think Ohtani has pulled a Tom Brady on behalf of the Dodgers, where he is very comfortable already, and his agents wanted the headline record-setting number.

 

[Max Power]

It sucks that another big star went to the NL. It's like we're back in the 60s where all the best players were in one league. Expanded interleague play helps some, but it's still a bummer as a fan of an AL team.

 

[DeadlySplitter]

Also this article from Tom Verducci suggests Ohtani didn't give much of a shit about the money: https://www.si.com/mlb/2023/12/09/dodgers-decade-long-pursuit-shohei-ohtani-finally-comes-through

As much as the Dodgers coveted Ohtani the player, they fell in love with Ohtani the person when he visited Dodger Stadium last week. Besides asking about the minor league system, Ohtani talked about how much he loves baseball and he talked about his dog. At one point, according to a source, he even remarked how the money that was in play “was laughable to even think about.” As colleagues say, Ohanti has two pastimes: playing baseball and training for baseball.

If anything, we should be preparing for an AAV valuation below 40.

 

[jon abbey]

It sucks that another big star went to the NL. It's like we're back in the 60s where all the best players were in one league. Expanded interleague play helps some, but it's still a bummer as a fan of an AL team.

Soto came the other way, at least for one year.

 

[radsoxfan]

If anything, we should be preparing for an AAV valuation below 40.

I suppose anything is possible, but if it's in the 30's Ohtani

1. Left a TON of $ on the table. At least 150-200M in present day value (unless the other rumored 500M+ contracts were also massively deferred as well).

2. Will be getting paid into the next century (or his family will).

 

[NJ_Sox_Fan]

It sucks that another big star went to the NL. It's like we're back in the 60s where all the best players were in one league. Expanded interleague play helps some, but it's still a bummer as a fan of an AL team.

There are plenty of stars in the AL, we just don’t have any of them.

 

[DeadlySplitter]

I suppose anything is possible, but if it's in the 30's Ohtani

1. Left a TON of $ on the table. At least 150-200M in present day value (unless the other rumored 500M+ contracts were also massively deferred as well).

2. Will be getting paid into the next century (or his family will).

Look at Ohtani's personality... I think it will end up being he left that much on the table, truly.

 

[John Marzano Olympic Hero]

Did we ever find out the name of Ohtani’s dog? Buster Onley was furious about that last week.

 

[brandonchristensen]

Because players/agents are not dumb. They know that, without interest, a dollar in 2060 is worth only a fraction of what it is worth today. And so when they negotiate, they can do a PV analysis like anyone else to compare offers.

It looks as though Ohtani did not sign anything close to a $700 million contract. He signed a $500 million contract, or something like that. Presumably, he is not stupid and knew this. And that is all the Dodgers should have to pay tax on.

I am as surprised today about how low this contract is as I was surprised yesterday how high it was. If it really is $300,000,000 deferred 40 years, it is worth far less than $700m.

Think of it this way. If the Blue Jays had offered $600m/10, no deferred, it would have been a better offer and Ohtani should have viewed it that way. Whether other factors were important, who knows?

I see.

I do think that once you are past 250M - the money becomes pointless. You or anyone in your family will never need to think about money again. Period. At that point it's more ego and signing 10/500 doesn't sound as good as 10/700 - and it also continues your income well after your playing days are done which is a nice safety net in the unlikely event you're able to spend the other 500M.

Either way it's such an unfathomable amount of money.

 

[RobertS975]

Yeah, the assumption that a team that was .650 in the regular year is a team 65 percent likely to win at the snapshot in time that is the playoffs is faulty — obviously. We saw it this year. The hot wild card team is a thing in all sports. Every team goes on streaks and lulls and sometimes these happen in June and sometimes in October.

THE Red Sox were the champions of July, right?

 

[RobertS975]

People probably don't want to hear this, but I suspect that when the light of day is put on the details of this contract, it will represent what the Dodgers were willing to risk in AAV without being able to get contract insurance. Or if they were able to get partial insurance, it will be under whatever percentage that the insurance companies were willing to write.

Also, keep in mind that Ohtani can monetize his deferred funds today. He can sell his 40 year deferred annuity for an amount paid to him today in return for signing over his deferred payments.

 

[Bob Montgomerys Helmet Hat]

Also, keep in mind that Ohtani can monetize his deferred funds today. He can sell his 40 year deferred annuity for an amount paid to him today in return for signing over his deferred payments.

877-CASHNOW?

 

[Montana Fan]

Approximately 1 out of 1600.

Thanks. That’s 40 times worse than Buster Douglas’ odds. Unbelievable.

 

[snowmanny]

I see.

I do think that once you are past 250M - the money becomes pointless. You or anyone in your family will never need to think about money again. Period. At that point it's more ego and signing 10/500 doesn't sound as good as 10/700 - and it also continues your income well after your playing days are done which is a nice safety net in the unlikely event you're able to spend the other 500M.

Either way it's such an unfathomable amount of money.

Well, at a certain point, if you keep accruing money, you have so much money you can sign Yamamoto.

 

[radsoxfan]

Also, keep in mind that Ohtani can monetize his deferred funds today. He can sell his 40 year deferred annuity for an amount paid to him today in return for signing over his deferred payments.

Are teams allowed to do the reverse to lower tax payments?

For example, for simplicity lets assume the 10/700M Ohtani contract is really valued as a standard 10/500M once they do the math on all the deferrals.

Can a team without cash flow issues sign Ohtani to a massively front loaded 10 year 360M contract with 350M paid as a signing bonus and a yearly salary of 1M?

350M up front right now at these interest rates is probably pretty close to the the same value as 50M/year for 10 years. Ohtani could buy an annuity if he wanted. And the AAV would be 36M/year.

Maybe they do the reverse math they do for the deferrals to still normalize it to 10 years?

 

[axx]

Not that I expect it to happen... but at what point do you wonder if MLB is going to reject the contract and the deal falls apart? Esp after last year.

 

[AlNipper49]

Are teams allowed to do the reverse to lower tax payments?

For example, for simplicity lets assume the 10/700M Ohtani contract is really valued as a standard 10/500M once they do the math on all the deferrals.

Can a team without cash flow issues sign Ohtani to a massively front loaded 10 year 360M contract with 350M paid as a signing bonus and a yearly salary of 1M?

350M up front right now at these interest rates is probably pretty close to the the same value as 50M/year for 10 years. Ohtani could buy an annuity if he wanted. And the AAV would be 36M/year.

Maybe they do the reverse math they do for the deferrals to still normalize it to 10 years?

This is a good question and something pertinent to the Sox this year. They have cash to spend but at some point you don't spend it as you need to remain flexible for future years. For example - you don't want to sign Montgomery when Cole is a free agent next year (hypothetical) and pay Montgomery what Cole would be offered (hypothetical) in a hypothetical situation where it's an either / or. But can you sign Montgomery to a 3/100 deal and give him 60 of it this year? It seems like it would be a good strategy on years when the free agent pool isn't as hot as other years.

 

[glennhoffmania]

I see.

I do think that once you are past 250M - the money becomes pointless. You or anyone in your family will never need to think about money again. Period. At that point it's more ego and signing 10/500 doesn't sound as good as 10/700 - and it also continues your income well after your playing days are done which is a nice safety net in the unlikely event you're able to spend the other 500M.

Either way it's such an unfathomable amount of money.

This is exactly right based on a conversation I had a few years ago with a front office exec. Your life isn't meaningfully different if you make 300m instead of 350m. Players want be able to say they signed a record deal, even if the record doesn't stand for very long. It's why when people talk about how if a guy signed with, say, Houston for 10m less than with, say, SF they'd be better off because of state incomes taxes it's nonsense. They don't care about that stuff when they're making eight figures every year.

 

[BaseballJones]

The system has made winning the World Series not especially meaningful anymore, in my opinion.

Do you think this may be, in part, because your team hasn't won it for so long, and only once in the last 23 seasons?

(That's not a shot at you, btw)

 

[DennyDoyle'sBoil]

Are teams allowed to do the reverse to lower tax payments?

For example, for simplicity lets assume the 10/700M Ohtani contract is really valued as a standard 10/500M once they do the math on all the deferrals.

Can a team without cash flow issues sign Ohtani to a massively front loaded 10 year 360M contract with 350M paid as a signing bonus and a yearly salary of 1M?

350M up front right now at these interest rates is probably pretty close to the the same value as 50M/year for 10 years. Ohtani could buy an annuity if he wanted. And the AAV would be 36M/year.

Maybe they do the reverse math they do for the deferrals to still normalize it to 10 years?

Yeah, I think that is what they would do. All contracts have deferred money in the sense that even though it is guaranteed, you pay in yearly installments. Like, the Judge contract does not have a present value of $360 million. But we hit the Yankees with $360 million in CBT credit, spreading the tax hit along with the contract. We don’t say the PV is actually $325m and hit them with $32.5m per year. We could. And maybe actually we should. The current CBT system kind of developed mostly in a low interest rate world. Higher rates make things look different.

 

[jon abbey]

Do you think this may be, in part, because your team hasn't won it for so long, and only once in the last 23 seasons?

(That's not a shot at you, btw)

Nope, honestly. I said it before this postseason and then the five best regular season record teams lost in the first round. The current system crowns whichever 85+ win team is hottest for a few weeks, I don’t believe that Texas or Arizona were anywhere near the best two teams this year.

 

[jon abbey]

Yeah, I think that is what they would do. All contracts have deferred money in the sense that even though it is guaranteed, you pay in yearly installments. Like, the Judge contract does not have a present value of $360 million. But we hit the Yankees with $360 million in CBT credit, spreading the tax hit along with the contract. We don’t say the PV is actually $325m and hit them with $32.5m per year. We could. And maybe actually we should. The current CBT system kind of developed mostly in a low interest rate world. Higher rates make things look different.

But it isn’t all charged up front, when NY is charged $36M for Judge in 2028, it will be 2028, so this analysis seems wrong to me.

 

[Murderer's Crow]

I'm not buying that any playoff system will allow the best teams to make it further in the postseason but I completely agree that more teams makes the whole thing worse. I have no interest at all in watching any 100 win team have a couple of bad games while the baseball universe pretends that the 84 win team who beat them is underrated and poised to win and motivated by clubhouse chemistry.