Kirby Lee/USA TODAY Sports
MLB fans had expected a massive deal to be struck following Shohei Ohtani’s time as a free agent. As Major League Baseball’s (MLB) reigning superstar, a multi-billion-dollar commitment was certainly expected.
But the scope of Ohtani’s eventual contract with the Los Angeles Dodgers still came as a shock.
Sports news outlets like ESPN, Sports Illustrated, The Athletic and the Associated Press had waited with bated breath for weeks to learn the outcome of Ohtani’s free agency. While many had anticipated an astronomical value, no one could have predicted the specifics of the surprising clauses in the contract.
The largest MLB contract in history
Shohei Ohtani agreed to a 10-year, $700 million contract with the Dodgers on December 11, setting a record not just in MLB history, but across all professional sports.
Ohtani’s free agency seemed to come at exactly the right time in his career. After starting out in the Nippon Professional Baseball (NPB) league in Japan, he spent a number of seasons making his mark as a franchise player with the Los Angeles Angels.
Ohtani has racked up accolades since his 2018 MLB debut, including becoming the first player in MLB history to win Most Valuable Player (MVP) by unanimous vote twice as well as the first to net 10 wins and hit 40 home runs in the same season. He also received the American League (AL) Hank Aaron Award, been named as an All-Star three times and was the AL home run leader in 2023.
But there’s been a major drawback to his time with the Angels, one that’s almost shocking considering his already long list of achievements: Shohei Ohtani has never made an appearance in the playoffs.
If Ohtani wants to the chance to play in the World Series, it’s unlikely that it would happen with the Angels. When his contract with the team expired after the 2023 season, he became a free agent and eventually landed with the Los Angeles Dodgers after being courted by a number of MLB teams.
What are the clauses in the Shohei Ohtani contract?
It’s not just the mind-blowing figure of $700 million that has caused such a stir around Ohtani’s deal. It’s also the many unique clauses that were worked into the contract, which many accredit to the Japanese slugger’s shrewd agent, Nez Balelo.
Shohei Ohtani’s salary
Ohtani’s annual salary will be set at just $2 million. Though that’s no small number by any measure, it looks tiny when compared to the total value of the highest MLB contract ever negotiated.
The Shohei Ohtani salary clause came as the most surprising part of the contract for many fans and journalists. It seems low for a player like Ohtani, but the rest of the clauses in the contract help to make sense of this decision.
Keep in mind that the MLB isn’t Ohtani’s only source of income. He also has a number of high-value brand endorsements.
Deferrals
The bulk of Ohtani’s earnings from the contract will come in the 10 years after his contract expires. From 2034 to 2043, he’ll be paid a total of $680 million.
This is a big win for the Dodgers since they’ll only have to pay Ohtani’s salary of $2 million for the first two years. After that, they’ll also have to start setting aside a minimum of $46 million each year to fund those deferral payments down the road.
The deferrals in Ohtani’s contract also help the team when it comes to minimizing how much they owe in competitive balance tax (CBT), which is commonly referred to as the luxury tax.
Ohtani’s idea shows that his decision to join the Dodgers isn’t just about his own personal financial. He wants to make sure the Dodgers are successful during his time there, and freeing up finances during that time allows more money to be invested into bolstering the team.
Dodgers personnel
Shohei Ohtani clearly has strong feelings about the way the team is managed. His contract features a clause that allows him to opt out at the end of a season if Dodgers owner Mark Walter or the team’s president of baseball operations Andrew Friedman leave.
Player perks
Shohei Ohtani also worked in a few perks as part of his contract. Two of the most notable include a reserved suite at Dodgers Stadium and an interpreter.
When does Shohei Ohtani’s current MLB contract expire?
Shohei Ohtani signed a contract for 10 years, beginning with the 2024 season. This contract expires after the conclusion of the 2033 season, at which point the star hitter can renegotiate or go elsewhere.
What are the largest MLB contracts for free agents?
Wondering how Ohtani’s contract stacks up with others in the MLB? Here are some of the league’s largest free agent contracts:
- Shohei Ohtani, Los Angeles Dodgers: $700 million, 10 years
- Aaron Judge, New York Yankees: $360 million, 9 years
- Bryce Harper, Philadelphia Phillies: $330 million, 13 years
- Corey Seager, Texas Rangers: $325 million, 10 years
- Gerrit Cole, New York Yankees: $324 million, 9 years
When calculated for the average annual value, Ohtani still ranks at the top for the highest MLB contracts:
- Shohei Ohtani, Los Angeles Dodgers: $43,783,056
- Max Scherzer, New York Mets: $43,333,333
- Justin Verlander, New York Mets: $43,330,000
- Aaron Judge, New York Yankees: $40,000,000
- Jacob deGrom, Texas Rangers: $37,000,000
What are the biggest contracts in sports history?
These are the highest value contracts across all professional sports, including American leagues like the MLB, National Basketball Association (NBA) and National Football League (NFL) as well as those in other countries:
- Shohei Ohtani, Los Angeles Dodgers: $700,000,000
- Lionel Messi, FC Barcelona: $674,000,000
- Cristiano Ronaldo, Al-Nassr: $536,336,818
- Patrick Mahomes, Kansas City Chiefs: $450,000,000
- Karim Benzema, Al-Ittihad Club: $447,302,608
- Mike Trout, Los Angeles Angels: $426,500,000
- Canelo Alvarez: DAZN: $365,000,000
- Mookie Betts, Los Angeles Dodgers: $365,000,000
- Aaron Judge, New York Yankees: $360,000,000
- Manny Machado, San Diego Padres: $350,000,000
Looking ahead to 2024
Kyle Ross/USA TODAY Sports
Though the offseason Shohei Ohtani news surrounding the new contract has become a high-profile story, there are many questions still lingering as the 2024 season approaches.
Toward the end of the 2023 season, Ohtani had what many assumed was a Tommy John surgery. The initial outlook was that he wouldn’t pitch until 2025, but his agent has said that it was a different procedure that should allow him to recover faster than his Tommy John surgery in 2018. Either way, it’s likely the procedure will delay his debut on the pitcher’s mound at Dodger Stadium in California.
There’s also the new dynamic on the Dodgers to consider. Ohtani is leaving long-time teammates like outfielder Mike Trout of the Angels and joining Dodgers standouts like Freddie Freeman and newcomer Tyler Glasnow.
Ohtani has already been involved with recruitment efforts for the team as well. He’s reportedly met with Japanese free agent Yoshinobu Yamamoto, a star from the NPB, and is heavily invested in the trajectory of the team in the coming years.