MLB superstar Shohei Ohtani has signed a record-setting contract with the Los Angeles Dodgers, but the terms of the deal are anything but conventional. According to a source familiar with the agreement, Ohtani will defer more than 97% of his $700 million contract until after the 10-year term has ended.
The two-time American League MVP will reportedly defer $68 million of his $70 million salary each year, with the remaining $680 million being paid out after the 2033 MLB season.
The decision to defer such a large portion of his salary came from Ohtani himself, who was educated on the implications and process of deferrals and ultimately felt it was the right thing to do. According to the source, Ohtani’s high earnings off the field made the decision an easy one for him.
In a statement announcing the signing, Dodgers chairman Mark Walter congratulated Ohtani on the “historic contract,” calling him a once-in-a-generation talent and one of the most exciting professional athletes in the world.
The unique terms of the deal will allow the Dodgers to have more financial flexibility to surround Ohtani with other top players, while also helping the team avoid Ohtani’s full salary contributing towards MLB’s luxury tax threshold.
Ohtani, who pitches and bats as a designated hitter, announced his move from the Los Angeles Angels to the Dodgers on Saturday, marking a significant move for the 29-year-old Japanese phenom.