I have to admit that my jaw hit the floor when I saw Shohei Ohtani signed a ten year, $700 million contract with the Los Angeles Dodgers. It was amazing when we hadn’t even hit the $500 million mark yet for a player when Ohtani blew by it.
I was even more shocked when I learned that Ohtani, who turns 30 at mid-season next year, wouldn’t be the $70 million man every season from now until 2033, but would only make a yearly salary not much better than a rookie on the squad, just $2 million. Instead, his contract will have most of its money deferred until a point where he’ll presumably no longer be active. Apparently the thinking was, by deferring $68 million annually, that Shohei’s contract would give the Dodgers more resources to assist in building a superior team while he’s still playing since he’s being paid like a backup infielder or middle reliever. And don’t forget: he’s really playing two roles once his arm troubles subside in 2025. (Even then, he’s only available as a starting pitcher or opener, given the Ohtani Rule adopted in 2022 so he could play both as a pitcher and DH.)
Yet what Ohtani gives over the next decade, he will take away during the following ten years. Oriole fans certainly recall the drag of the Chris Davis contract, and Tiger fans regularly rued the albatross of the final years of the Miguel Cabrera deal as it handcuffed the team from making more of a splash in the free agent market. Imagine the impact $68 million would make on a team’s payroll, even if the average doubles in the next ten years. It basically means the Dodgers’ window is right now, or that they need to develop an Orioles-grade minor league system to plug the gap beginning in the early ‘30s.
On his end, Ohtani takes a significant hit. Because he’s deferring with no interest, his $680 million stake in 10 years would be worth $516 million based on inflation over the last ten years (and perhaps much less because inflation has increased of late.) That’s not to say he won’t be fantastically wealthy (as he can also thrive with endorsements and such) but he does leave a lot of money on the table.
One thing about baseball as a career, though: unlike most professions where the prime earning years come when a person is in their 50s, baseball players seldom draw a large salary beyond the age of 40. Usually they’re looking back at a career where they may have made $3-4 million by hanging around a half-dozen seasons. For every $700 million Ohtani, there are 100 Pedro Florimons who bounced around for several years between majors and minors and may have made $5 million total - more than I’ll probably ever make in my life unless my Substacks REALLY take off, but not really enough to be comfortable for life unless it was invested well.
There’s also the interesting possiblilty Ohtani may have an Ichiro-like career and be a productive player well into his forties. Since his contract with the Dodgers expires in a decade, it might be worth the flier come 2034 for a team to take a chance on him, giving him a major league minimum deal and letting the Dodgers make him comfortable. (Imagine him on the Giants or Padres being paid bigtime by the Dodgers.) At that point he may be on the cusp of career achivements like 500 home runs or 200 wins as a pitcher, so he may want to round off his career chasing those numbers like Miggy Cabrera did. (I doubt Ohtani makes it to 3,000 hits though.) He could have a Cabrera-style retirement tour, too.
So the Dodgers are truly mortgaging their future to win in the next decade. We’ll see if the gamble pays off.
Programming note: I’m taking the week off from both The Knothole and my eponymous site next week, so Merry Christmas and Happy New Year to my readers! On The Knothole, I’ll be back on January 4, 2024. As Shorebird fans, we’ll be over halfway through the offseason by then!
Until next time, remember you can Buy Me a Coffee since I have a page there.