According to reports, Shohei Ohtani is planning to defer $68M of his $70M annual salary in an effort to help the Dodgers acquire additional players and lower their tax burden.
The newly acquired two way superstar stands to defer $680M of his total salary over the next 10 seasons, representing roughly 97% of the total value of the deal. In doing so, it will allow Los Angeles to have extra roster flexibility and possibly acquire more free agents this offseason.
Sources indicate that the idea was actually Ohtani’s, and will see him earn the remainder of his contract between 2034 and 2043. No doubt the Japanese DH’s lack of playoff experience throughout his MLB career played a large role in his desire to help out his new team’s front office.
“Dodger fans, thank you for welcoming me to your team,” Ohtani said via a team news release. “I can say 100 percent that you, the Dodger organization and I share the same goal — to bring World Series parades to the streets of Los Angeles.”
By deferring his salary, only $46M of his $70M salary will count towards the Dodgers competitive balance tax figure. The terms of the CBT discounts deferred money but doesn’t exclude it altogether.
Between Ohtani, Freddie Freeman, and Mookie Betts, LA has roughly $100M locked up between 3 players for the start of the 2024 campaign. With the tax threshold sitting at $237M for next season, the Dodgers will need to walk a financial tightrope to round out the remainder of their 40 man roster if they still plan on adding bodies this offseason.
“Shohei is a once-in-a-generation talent and one of the most exciting professional athletes in the world,” said Dodgers Chairman Mark Walter. “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. Together with Shohei, we will work to help grow the number and breadth of people around the world who enjoy the excitement of Major League Baseball.”
Los Angeles remains in the mix for several high profile free agents, and have most recently been linked to Japanese superstar Yoshinobu Yamamoto. One can assume LA’s newest acquisition will no doubt be lobbying his fellow countryman to don Dodger blue in 2024.
-Kyle Skinner
Twitter: @JKyleSkinner
Photo: Mogami Kariya. This file is licensed under the Creative Commons Attribution-Share Alike 2.0 Generic license.