In the early morning of December 10, Beijing time, Shohei Ohtani, the two-time MLB American League Most Valuable Player, personally announced that he would join the Los Angeles Dodgers and sign a ten-year contract with a sky-high price of $700 million. But just two days later, the details of the contract were revealed, and $680 million of it would be paid with a 10-year delay.
Why did Shohei Ohtani, a Japanese player, win the world's largest sports contract, and what did the delay in paying more than 97% of the contract fee mean to the team and himself?
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Text / Fu Haonan
Editor / Yang Yumeng
In the early morning of December 10, Beijing time, two-time MLB American League Most Valuable player Shohei Ohtani (Shohei Ohtani) personally announced that he had reached an agreement with the Los Angeles Dodgers and signed a ten-year contract of $700 million - judging from the numbers alone, this means that his weekly salary will exceed $1.346 million, and he can earn $192,000 a day, and even an average of $133 per minute.
Source: FOX
Shohei Ohtani, 29 years old from Japan, not only broke the record of the largest contract in MLB history with a gap of more than 250 million US dollars, but also surpassed the contract amount previously signed by Messi and Ronaldo in one fell swoop, setting a new record for the total salary of a single contract for a new world athlete, shocking the global sports world!
But just two days later, the details of Ohtani's contract were revealed, causing an uproar: he was willing to deal with $680 million in the contract in the form of deferred payments, a significant reduction in his average annual salary.
According to the contract, Dodgers will pay the lion's share of the sky-high contract with interest over 2034-43, and will currently only pay Ohtani an annual salary of $2 million. This payment method will free up more room for Dodgers to sign more players to bolster the roster in the short-term competition window.
Why was Shohei Ohtani, an Asian player, able to win the world's largest sports contract? Is it worth it for Dodge to pay him a huge price of $700 million for 10 years? What capital does he have to sacrifice more than 97% of his contract money to become a global team at the moment?
Shohei Otani, why is it worth so much money?
In a previous episode of The Baseball Files, we made an assessment of the first person in baseball today, and mentioned the key points that define the value of Shohei Ohtani's new contract: first, his unique ability to play as a top-tier pitcher on the field.
For three consecutive seasons, Ohtani has been phenomenal in both pitching and batting, dominating both offensive and defensive ends, surpassing the legendary Babe Ruth 100 years ago, refreshing people's perceptions and concepts of baseball as a sport, and turning the impossible into possible.
Not only did he become the first player in major league history to win the MVP by multiple unanimous votes, but he also led Japan to victory over the United States in the World Baseball Classic in the first half of the year.
Therefore, Ohtani is the undisputed number one star in baseball, and he deserves the salary of a top pitcher + top hitter if he can achieve the ultimate in two very different skills in this sport, not to mention his excellent running ability. Even if Ohtani has to undergo surgery again this year due to a torn ulnar collateral ligament and can only play again as a pitcher in 2025, the improvement he will bring to the team's future strength ceiling is immeasurable.
The second is Shohei Ohtani's huge commercial influence off the court. Before signing the contract, Ohtani's off-court earnings this year had reached the highest in MLB - according to Sportico's estimate in March this year, Ohtani's sponsorship endorsement income was as high as $40 million, and no other professional baseball player earned more than $5 million, including former MVP winners such as Trout, Harper, and Judge.
Even if you change the field and compare Ohtani with the basketball superstars with the strongest personal brand effect in the four major leagues in North America, his sponsorship and endorsement income is second only to James, Curry, Brother Alphabet and Durant, and higher than Doncic, Harden and others. Brands signed with Ohtani include, but are not limited to, Japan Airlines, Oakley, Hugo Boss, Descente, Porsche, Topps Card and New Balance, among others.
Ohtani's contract amount is comparable to Curry and James' total career contract income
图源：clutchpoints
At the same time, Ohtani also leads the major leagues in the number of followers on social media, with 6.4 million followers on Instagram alone, which is more than the total number of followers on the three social media platforms of Trout, MLB's second-most popular former teammate. In addition, he also ranks first among major league players in jersey sales this year.
Whether from the perspective of social media influence or personal brand effect, Shohei Ohtani is the brightest star in baseball. And the huge off-field income is also why he has the confidence to accept the team's deferred payment.
Dodge's 700 million gamble, can it be earned?
To see the answer to this question, we must first understand the other subject of this signing - the Los Angeles Dodgers.
The Dodgers, based in the City of Angels, are MLB's traditional giants and the second most valuable team in Forbes at $4.8 billion in commercial value after the New York Yankees. They not only have the world's top capital, market resources and brand exposure, but also a powerhouse that has entered the playoffs for 11 consecutive years.
The Dodgers have the highest average home attendance in the major leagues for the 2023 season (over 47,000), and according to ESPN, the lowest second-hand ticket price in the second-hand ticket market has soared to more than $220 for their home opener against the Cardinals next year after signing Ohtani.
In addition, according to SponsorUnited, MLB teams' sponsorship revenue in 2023 has reached $1.5 billion, an increase of 23% from last year and a new high in recent years. In such an environment, the Dodgers themselves are one of the most "gold-absorbing" teams in the major leagues, and signing the MLB superstar with the strongest "money ability" today is a match made in heaven.
It's no wonder that many sports media people in North America laugh: Dodger's salary for Ohtani will be able to recover from ticketing, merchandising, sponsorship and other income in the first year.
In particular, we have to count the Japanese investment brought by Ohtani and the attention in East Asia: according to Axios, 22 billboards were sold to Japanese brands at the Angels' home stadium last season, because Japan's national television station NHK signed an early broadcast deal with Angels, with a fixed multi-camera broadcast in the stadium, including an exclusive view of Ohtani that tracked the whole stadium.
As a result, Dodger's huge investment in Ohtani has paid off considerably, both in terms of the assets he brings on and off the court.
The length and value of the contracts of the top 10 MLB players in history
Source: FOX
Aside from money, what do both sides value?
The deal is not without risk — as a pitcher, Ohtani's return to peak form after two elbow ligament surgeries is still in question.
Not only that, but even if Ohtani accepts the contract extension, but the Dodgers have spent hundreds of millions of dollars to sign Murkey Bates and Freddie Freeman, two MVP-level superstars, then how much competitive balance tax (i.e., MLB's luxury tax) will be paid on the team's salary in the future and how much room it can leave for maneuvering in the future is equally important.
We may speculate that it was Dodgers doctor Neal El Attarche who performed Ohtani's second surgery, and his inside information gives the team high hopes that Ohtani will return to his full form.
Second, Bates and Freeman have actually accepted deferred payments, with $115 million of the former's 12-year $365 million contract being deferred to 2033-2044, and $57 million of the latter's six-year, $162 million contract being deferred until 2028-2040.
Even if that means the Dodgers will have to pay a total of $857 million in contract extensions for the three superstars between 2033 and 2044, at least for now, their combined salaries only account for about $100 million a year for the Dodgers, and the amount of the competitive balance tax triggered in the 2024 season is $237 million.
Source: MLB
As a result, the team has a strong guarantee for both roster operations and box office, and the Dodgers can even continue to look for pitchers in the free agent market, such as Ohtani's national team teammate Yushin Yamamoto (No. 2 in the free agent market this year).
According to Sports Illustrated, Ohtani's contacts with Dodgers executives have repeatedly emphasized that victory and success mean more to him than money.
The Wizards have spent six seasons without a playoff in the major leagues and is about to turn 30 looking to make a breakthrough in the next phase of his career. Coupled with the fact that his off-field earnings will only continue to rise, the amount of cash provided by the team's contract may not mean much to him.
It is worth mentioning that although the Dodgers were widely regarded as Ohtani's most likely next home from the beginning (geographical location, Japanese fan base, team capital, roster strength, market and other advantageous factors), Ohtani, as the biggest free agent in MLB history, has not made a big splash for himself in the past few weeks, he has mysteriously visited various teams and warned everyone through the team not to reveal too much information.
This even annoyed ESPN and other major media outlets, which were originally planning to use Ohtani's movements as a way to drive offseason topic traffic, and they called on Ohtani to do more to promote baseball and stop hiding his whereabouts and intentions like protecting top-secret information. Dodgers were also nervous because of the eventual rumors that the Toronto Blue Jays had become one of Ohtani's strongest contenders.
But in the end, Shohei Ohtani chose to stay in Southern California, choosing the Dodgers who wanted to sign him 10 years ago - the team in the top 10 of the minor league farm system (future potential), a team with a winning culture and a pure attitude to baseball, the team that is most likely to make him win the World Series and achieve his "greatest" dream.
Previously, even ESPN was in a hurry and called on Ohtani to reveal more information
The impact of the two major topics of $700 million and deferred payments not only satisfied the appetite of the media from all walks of life, but also pushed baseball and MLB to the forefront of public opinion.
But overall, congratulations to Shohei Ohtani and the Los Angeles Dodgers, and we'll see what happens next spring.