Ohtani contract structure could lead to additions for Dodgers

Shohei Ohtani. Kiyoshi Mio-USA TODAY Sports

Shohei Ohtani contract structure could lead to another massive addition for Dodgers

By Eric Smithling | Last updated 12/11/23

Already the winner of MLB free agency, the Dodgers might not be done. After adding Shohei Ohtani, coveted Japanese pitcher Yoshinobu Yamamoto could be next.

The Athletic's Fabian Ardaya provided details of the team's historic $700m contract for Ohtani, which shockingly defers $680M until the end of his deal.

Exclusive @TheAthletic: Shohei Ohtani will defer $68 million per year of his $70 million annual salary over the course of his 10-year, $700 million deal with the Dodgers, allowing the team to keep spending, according to a person briefed on the terms.https://t.co/IsnWlsbTq9
— Fabian Ardaya (@FabianArdaya) December 11, 2023

That means he'll make $2M per season over the next 10 seasons, or $1,280,000 more than the MLB minimum salary.

ESPN's Jeff Passan noted the unprecedented structure is legal, with the league's collective bargaining agreement explicitly stating, "There shall be no limitations on ... deferred compensation."

For anyone wondering if MLB will challenge or cancel Ohtani's contract: The answer is unequivocally no. There is a specific article in the collective-bargaining agreement that addresses this. And it's very clear: Deferred money is limitless -- even $680 million of $700 million. pic.twitter.com/DGNK0JulED
— Jeff Passan (@JeffPassan) December 11, 2023

Those savings will allow Los Angeles to spend even more in free agency.

The Dodgers have a loaded lineup with Ohtani, Mookie Betts and Freddie Freeman leading the way. However, their rotation needs work, especially with Ohtani unable to pitch in 2024 due to his elbow injury.

This season, Dodgers starting pitchers ranked 20th in ERA, 22nd in strikeouts per nine innings and 24th in home runs allowed per nine innings.

Ohtani's deferred compensation gives the Dodgers financial flexibility to swing big on other free agents, including Yamamoto, who played in Japan's Western and Pacific Leagues for the Orix Buffaloes from 2017-23. In seven seasons, he had a 75-30 record with a 1.72 earned run average.

On Sunday, Passan wrote, "Adding him and Ohtani isn't out of the question."

Thanks to the unorthodox structure of Ohtani's contract, those chances have increased.

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