HomeSportsDodgers' reported response to Shohei Ohtani's $680 million deferral request: 'Holy f***'

Dodgers’ reported response to Shohei Ohtani’s $680 million deferral request: ‘Holy f***’

Shohei Ohtani’s $700 million contract with the Los Angeles Dodgers stunned the baseball world this offseason. It also reportedly surprised the Dodgers.

A Sports Illustrated feature by Tom Verducci on Ohtani, published ahead of his Dodgers debut in South Korea on Wednesday, sheds new light on how the two-way phenom’s contract came together a few months ago, specifically how the idea came to be reached a position to defer $680 million of the payment. money until after the end of the contract.

Such a structure has no precedent in baseball. A player agreeing to plead guilty for 97% of his contract money is so team-friendly that Ohtani’s contract sparked debate about whether MLB should step in to close what many called a loophole. It’s such a bizarre idea that it could only have come from the player himself, to improve the competitive position of his new team.

According to SI, Ohtani’s agent Nez Balelo explained the proposal to Dodgers president of baseball operations Andrew Friedman on December 7, two days before the deal was announced. Friedman told Verducci the word “Deal!” immediately came to mind, and a few more emerged after the conversation was over:

Friedman and Balelo, who still had other teams interested, agreed to talk again in more detail the next morning. After hanging up, Friedman called Stan Kasten, Dodgers president and CEO.

“Holy f—” Friedman said.

“Is that a ‘Holy f-‘ good or a ‘Holy f-‘ bad?” Kasten asked.

Very good indeed.

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Instead of paying Ohtani the average annual value of his contract of $70 million this year, the Dodgers will pay him $2 million. Another $2 million next year, and every year until 2033. After that, they’ll pay him $68 million annually, likely hoping Ohtani’s revenue streams have already guaranteed he’s paid for himself.

SEOUL, SOUTH KOREA - MARCH 18: Shohei Ohtani #17 of the Los Angeles Dodgers prepares to bat in the 5th inning during the exhibition game between Team Korea and Los Angeles Dodgers at Gocheok Sky Dome on March 18, 2024 in Seoul, South Korea.  (Photo by Chung Sung-Jun/Getty Images)

Shohei Ohtani’s contract could only have come from Shohei Ohtani. (Photo by Chung Sung-Jun/Getty Images)

Financially, Ohtani will pay the price due to the lack of interest in the subsequent payments. That’s such a factor that the MLB Players Association has put the actual current value of Ohtani’s contract at about $438 million, while MLB estimated it at $460 million.

It won’t be a total loss, however, as Ohtani will be able to avoid a large portion of California state income taxes. Verducci notes that the California Center for Jobs and the Economy has estimated that if Ohtani is not living in California at the end of the contract, he could avoid $98 million in income taxes.

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California State Controller Malia Cohen wasn’t happy about it and used the news to call for a cap on contract deferrals.

Shohei Ohtani’s deferred money unlocked the Dodgers’ offseason

In the meantime, the Dodgers could use that $68 million on other things, namely making sure Ohtani wasn’t their only splashy signing of the offseason. On the same day Ohtani was introduced as a Dodger in Los Angeles, the team traded for Tampa Bay Rays All-Star Tyler Glasnow. Then they signed another Japanese free agent, Yoshinobu Yamamoto, to the largest contract ever for a pitcher, plus Teoscar Hernández (one year, $23.5 million) and James Paxton (one year, $11 million).

On an average salary basis, Glasnow, Hernández and Paxton will make a combined $61.5 million next season — or $6.5 million less than what Ohtani is deferring.

As Friedman said at Ohtani’s conference, it’s a convention that any team would have been afraid to pitch Ohtani for fear of offending him:

“I wouldn’t have had the guts to suggest it, and that’s the funny thing about ‘Oh, the Dodgers!’” Friedman said. ‘I wouldn’t have had the guts to do that. But like [Ohtani’s agent Nez Balelo] We walked through it and put it down as we were talking, it was incredibly consistent with everything he had said throughout the process. Sometimes you experience that, but they don’t sync and they don’t match.”

The new Dodgers will make their LA debut in the early morning hours on Wednesday, with first pitch at the Gocheok Sky Dome scheduled for 3:05 a.m. PT against the San Diego Padres.

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