Shohei Ohtani will defer $680M in deal with Dodgers, sources say - ESPN

Shohei Ohtani's historic contract with the Los Angeles Dodgers will see him defer $68 million of his annual $70 million salary, sources familiar with the deal said Monday, significantly lowering his new team's payroll and potential tax burden.

Ohtani agreed on a 10-year, $700 million contract with the Dodgers on Saturday, by far the richest in the history of North American professional sports. A source said then that the majority of the contract would come in deferred money; under this structure, however, Ohtani is deferring more than 97% of his earnings. The deferred money — totaling $680 million — will be paid to Ohtani between 2034 and 2043, a source said.

The deferrals were Ohtani's idea, a source close to the situation said, motivated largely by the thought of helping the Dodgers sign other players and made easier by his massive off-the-field earnings. Ohtani is believed to make upward of $45 million annually through endorsements, a source said, making him by far the most marketable player in Major League Baseball. The Los Angeles Angels were believed to make more than $20 million annually off that same marketability during his tenure there.

Ohtani's cost toward the Dodgers' competitive balance tax payroll — which typically uses the average annual value of contracts, in this case $70 million, but discounts deferred money — will be about $46 million after each season. That puts the combined cost of Ohtani, Freddie Freeman and Mookie Betts toward the CBT payroll at somewhere in the neighborhood of $100 million annually. The luxury tax threshold sits at $237 million in 2024.

The collective bargaining agreement does not place a limit on the amount of money that can be deferred, but teams have to set aside the