Shohei Ohtani is an LA Dodger: 10 years/$700 million
- Thread starter RedOctober3829
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That’s miles better than Houston and Toronto like me (well two of top 3)
70/yr is a lot for a DH
They better hope he can pitch
Agreed on the conflation of 2 separate things, apologies for any confusion.
The interest rates are why long term contracts now are not quite as insane as they seem (Correa's initial Giants 13/350M contract was worth 285M present value at the time of that article I posted, 50M less than in a low interest rate environment).
The deferrals are the reason (I assume) the CBT values are adjusted downward and 700M is not going to be the numerator when all is said and done on the yearly tax.
That's a hell of a crystal ball you've got there. The Yankees were the best team in baseball for years until they weren't. Tossing hundreds of millions at A-Rod, Giambi, and Sheffield didn't lock in another decade of dominance, even with the steroids. Who knows what the Dodgers end up looking like in 2 years, never mind 10?
Fans should want titles. That's why you play the game is to win. Not taking the postseason "seriously" is a weird take to have IMO.
In 2023, the A's estimated payroll was $51,230,000 and the Guardians, Pirates, Rays, and Reds ranged from $70,114,729 to $77,877,833 (and according to bb-ref, these values may not include bonuses a team paid in the season or players called up or acquired mid-season). The Yankees had the highest payroll at $259,417,008.
And it's not just MLB handing out these huge salaries. I suspect that soon the amount of money given to broadcast companies well increase as well as ticket prices for games. But are we seeing wages go up correspondingly and prices for other goods not increasing? How soon before sports begins to charge media for reporting stats, etc.? I'd like to know how many seats are bought by corporations to use as tax write-offs?
And it's not just MLB handing out these huge salaries. I suspect that soon the amount of money given to broadcast companies well increase as well as ticket prices for games. But are we seeing wages go up correspondingly and prices for other goods not increasing? How soon before sports begins to charge media for reporting stats, etc.? I'd like to know how many seats are bought by corporations to use as tax write-offs?
Regular season has games you can win, too. It's a very American idea that winning a short series tournament is more valuable than the more evenly scheduled full season.
I think if they get to the post-season 6 or 7 years it will of course be deemed a good deal. But I would also say that if they win 1 or 2 WS in the first four or five years, and Shohei is a major part of the championship, most fans will consider it a good risk to have taken.
I think its you who is missing the point.
Again. I live in LA (for 30 years) and work with (and have friends who are diehard dodger fans) They won 111 games in 2022 and 100 games last year and have Bupkis to show for it. When they got bounced in the playoffs, the fans were out for blood. They wanted Roberts gone, and major changes in the FO. They were absolutely pissed.
they did not give a shit that they won 111 and 100 regular season games, because it did not End in them winning the WS. Some of my friends called the dodgers frauds who can never get it done in the playoffs.
there is a reason the colts have been a constant punching bag for stupid banners they put up.
Yeah it did, actually. The Yankees easily had the most wins between 2002 and 2012, 100 more than the Red Sox.
Spending money on good baseball players is a very effective way of building a good baseball team. In fact, it's the most effective way. I am shocked at how good of a job the owners have done convincing fans otherwise.
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I am not saying that Dodgers fans dont care about winning the World Series. I am not saying anything close to that. If you're going to keep engaging with me on this, please actually read and understand what I am arguing.
Degrom at 35 got 5 years at 185 I believe. So double that for Ohtani in terms of years and you get $370. That leaves 10 years at $330 for the batter.
It's not completely insane.
I guess this means JDM is available.
It's not completely insane.
I guess this means JDM is available.
Yes, but last year's losses were particularly pitiful against the D-backs. They just folded. Their pitching stank, and so did Betts & Freeman.
Absolutely no chance Ohtani is getting more as a pitcher than as a hitter. Not even close.
Once this gets contract gets valued at around 600M-ish by the players union, I'll say 450M hitter/150M pitcher.
Cubs offered $575m with incentives to bring it to 600.
View: https://twitter.com/mjhurleytdt/status/1733599346656960758
View: https://twitter.com/mjhurleytdt/status/1733599346656960758
The system has made winning the World Series not especially meaningful anymore, in my opinion.
At least $100M is PR value, everyone has said Ohtani brings a ton of off-field value.
Thanks for this.
Every time there’s a record setting deal in MLB, NBA, whatever, there’s a bunch of “this is ridiculous money” reactions. Until the next record breaking deal causes them to faint again. If people want to debate the strategy of committing X dollars of a salary cap to a player, that’s fair. But the raw dollars shouldn’t shock. You can see far more shocking numbers in other industries and sports. Mbappe reportedly turned down $1 BILLION for his first year from the Saudis.
Direct Quote from Jeff Passan Tweet (apologies for formatting):
"I’m going to explain why Shohei Ohtani’s $700 million contract with the Los Angeles Dodgers will not equal $700 million in terms of MLB accounting or the present-day value of the deal.
When money in a contract is deferred, the competitive-balance tax number — the luxury tax — is discounted. With a source saying a “majority” of Ohtani’s contract is deferred, the discount could be significant. Typically, a CBT number is the average annual value of a deal — in this case $70 million. But depending on the size and length of the deferrals, Ohtani’s CBT number is likelier to wind up in the $40-50 million-a-year range, an enormous benefit for the Dodgers.
The deferrals also affect the net present value of the deal. There’s a rule of thumb across all walks of life: Money today is more valuable than money tomorrow, inflation being what it is. When you defer money, you’re taking less. The Dodgers are operating in an environment in which the prime rate is 8.5%. And with money today being so pricey, it lowers the present-day value of the deal by a significant margin.
Regardless, in the end, Shohei Ohtani will be paid 700 million US dollars by the Dodgers. It’s an obscene amount of money. It’s just going to be seen as less by the league’s accounting — and will allow the Dodgers to add even more around Ohtani as they try to win a championship."
"I’m going to explain why Shohei Ohtani’s $700 million contract with the Los Angeles Dodgers will not equal $700 million in terms of MLB accounting or the present-day value of the deal.
When money in a contract is deferred, the competitive-balance tax number — the luxury tax — is discounted. With a source saying a “majority” of Ohtani’s contract is deferred, the discount could be significant. Typically, a CBT number is the average annual value of a deal — in this case $70 million. But depending on the size and length of the deferrals, Ohtani’s CBT number is likelier to wind up in the $40-50 million-a-year range, an enormous benefit for the Dodgers.
The deferrals also affect the net present value of the deal. There’s a rule of thumb across all walks of life: Money today is more valuable than money tomorrow, inflation being what it is. When you defer money, you’re taking less. The Dodgers are operating in an environment in which the prime rate is 8.5%. And with money today being so pricey, it lowers the present-day value of the deal by a significant margin.
Regardless, in the end, Shohei Ohtani will be paid 700 million US dollars by the Dodgers. It’s an obscene amount of money. It’s just going to be seen as less by the league’s accounting — and will allow the Dodgers to add even more around Ohtani as they try to win a championship."
I agree that the current system devalues the World Series to some degree, but, then, what exactly is “meaningful”? Making the final four? Making the playoffs? What constitutes a season worth celebrating?
It's not that the owners have convinced fans that spending money on free agents is a bad idea, it's the reality of the aging curve and the rules governing control of young players. By the time a player, no matter how great, reaches free agency, it's overwhelmingly likely that his best years are behind him. I'm all for changing the rules of the game to pay young players more when they're more productive, but it doesn't seem like anyone in the game wants that.
It depends on the team and the situation, for instance Baltimore had an incredible season this year despite not winning a playoff game.
I think that’s fair. To me, making the final 4 in any sport is a great achievement…unless you’ve done that a bunch of times without winning the whole thing (see: 1993 Bills, 2023 Celtics).
I guess I don't understand what about the current system devalues a World Series title. Is it the specific playoff format or no? Do you want to go back to the old format where there's 2 divisions and there's only an LCS and a WS? Do you want to keep it to 4 teams in? Make all of the playoff series best of 7?
I want to make the postseason all teams that win 90 games or more and only those teams, no matter how many or few that is each year. That would be a start, a team that can't win 90 games should not be eligible to be champions. I also would like to dump divisions and just seed by record within each league, but since none of this is going to happen, I will continue to lose interest in the MLB postseason once my team's not in it anymore.
To me, the best part about baseball is that an 85 win team can make a World Series run. Same as a Cinderella run in the NCAA tournament. But, I certainly respect your position.
The shoddy quality of nationally televised baseball factors in also. If it's the middle of the summer and your team is playing six games on local TV and one on Fox in a week and for some reason you have to pick one of the seven to miss, almost everyone would pick the Fox game. That same shoddy quality permeates postseason baseball telecasts and also affects my perspective on all of this.
Anyway, all off topic, sorry.
In case you are wondering what Angels fans are thinking, here is a text from my friend who grew up in Anaheim Hills, “Baseball ruined forever. I need a hit of the Wash crack pipe.”
This would have been like Mookie going to the Yankees.
This would have been like Mookie going to the Yankees.
The deferrals aren't anything super sophisticated. You defer money, its discounted by some rate (i.e. a pre-agreed interest rate that compensates the party accepting the deferred payments for forgone earnings on that money) and instead of 10 years of $70mm/per it comes out to something less on an annualized basis.
This simple trick will save you millions!*
*on an AAV basis.
This simple trick will save you millions!*
*on an AAV basis.
Why 90? Seems arbitrary. What's the difference between an 89 win team and a 90 win team?
Anthony Davis to the Lakers is maybe a better comparison, whatever the comparison is it needs to involve the original team doing a horrendous job at surrounding the superstar with more talent.
Yeah that seemed a bit extreme to me.
My initial hunch just with the "massive deferral" talk is that it would shake out in the 55-60 range rather than 70.
We had an exchange recently on main board which turned on someone not understanding the impact of deferrals and focusing on just the top-line reported salary numbers; as above illustrates, we should all be aware here of the difference between a tweet of a total number and the actual economic value of an agreement. While the $700 mil headline is fine, in the real world when we compare offers---like the Cubs offer and the Dodgers offer to Ohtani--we need to be actually doing the economic thinking described above. That is what players and agents actually do and we should all try to be disciplined about doing that same thinking. I obviously dont' know the specific details of either offer at moment, but as they come out and we discuss---remember there's a lot more to it than the top-line number
People get way too concerned with the money for a league without a cap and not that terrible tax penalties.
The Dodgers want to win a lot of games and give themselves the best chance of winning the WS every year. Getting the best player in baseball will help that.
The money only matters if it stops them from doing other things that would help more, and the way baseball is set up the determining factor on that is mostly how much money the ownership is willing to pay. Ohtani at $70M AAV is probably bad for the Red Sox because of how John Henry wants to run his team financially. For the Dodgers.... they have different views on what they want to spend and what kind of profit/loss they find acceptable. Just like how in a few years when the Saudis buy the Orioles or something they won't have the same ideas about how to run it financially that Angelos did.
The Dodgers want to win a lot of games and give themselves the best chance of winning the WS every year. Getting the best player in baseball will help that.
The money only matters if it stops them from doing other things that would help more, and the way baseball is set up the determining factor on that is mostly how much money the ownership is willing to pay. Ohtani at $70M AAV is probably bad for the Red Sox because of how John Henry wants to run his team financially. For the Dodgers.... they have different views on what they want to spend and what kind of profit/loss they find acceptable. Just like how in a few years when the Saudis buy the Orioles or something they won't have the same ideas about how to run it financially that Angelos did.
The Dodgers are hoping climate change or WW3 will keep them from paying the full 700.
Random question - does anyone know the personal income tax implications of the deferrals? If Ohtani retires in Florida, or Japan, do all those deferrals get taxed as earned in his current location? At the very least, I assume he will not have to pay state income tax to all the states LA plays in for the deferred money.