Just as the baseball world was wrapping its mind around Shohei Ohtani’s record $700 million deal with the Los Angeles Dodgers, another bombshell dropped on Monday night: Ohtani would be deferring some $680 million of that number, only making $2 million per year over the actual course of the deal. Immediately, questions — and accusations — started flying. How would the league’s 29 other owners feel about such an unprecedented contract structure, one that granted crucial financial flexibility to what is already one of the richest franchises around? And how would the union feel about its highest-paid member willingly taking less rather than resetting the market?
All of that uproar now has Ohtani’s agent, Nez Balelo, doing a bit of a damage control. In a new interview with Tom Verducci, Balelo described the process by which Ohtani chose the Dodgers and why his client agreed to such a unique deal. Balelo told Verducci that the deferred payments were Ohtani’s idea, and that the two-way star wanted the deal structured this way in order to give his team a better chance to field a competitive team around him.
“Nobody should be surprised,” Balelo says. “Everything he does is unique and impeccably well thought out. Who in their right mind gets to this level and decides he wants to help the team and the city compete above all else and basically says, ‘I don’t need it.’ Nobody does that. But there is nobody like him. This is the epitome of thinking about others, of pure intentions.
“This is who he is, who he always has been. He is coming in not as someone above all others, but as a complementary player to help the team win.”
There’s no doubt that this is helpful to the Dodgers in the immediate future, and it’s fine to credit Ohtani with prioritizing his desire to win — especially given how badly the Angels failed to put talent around him over the last few years. Still, we can probably dial down the altruism stuff; Ohtani will still be getting $700 million dollars, even if the lack of interest on those deferred payments lowers the actual value to “only” $460 million or so. (And he’s still big business off the field, with a non-salary income of some $50 million per year.)
Ohtani wanted to get paid what he was worth while making sure that he didn’t get stuck in non-competitive purgatory again, and to his and Balelo’s credit, he made it happen. But there are also far-reaching consequences to that choice — as Balelo explained, this contract structure really is without precedent in the history of the sport:
“Nobody at the top of their sport has ever done anything like this,” Balelo says about how Ohtani came up with the idea of deferring the bulk of his salary. “No way. When he brought it up, I looked into it. Nothing comes close.”
This is true. Ohtani is not only deferring the most total money but also the highest percentage of his contract, lapping the previous record held by Max Scherzer (who deferred half of his contract with the Nationals in 2015). Let’s also keep in mind that Ohtani did leave tens of millions, at least, on the table by coming to Major League Baseball for the 2018 season, before he had enough service time in Japan’s NPB to be posted; combined with what he’s doing on his current contract, a picture of Ohtani’s priorities — namely, to play and win in the States — becomes clear. But, again, he’s also making more in the next 20 years than any other athlete ever has.
(Verducci also reports that Ohtani has “language in his contract that assures the club will make good on its promise to use the savings he created to build a competitive team around him.” It’s unclear exactly what that language is, and Balelo declined to comment on it.)
Again, in the micro sense, this is all fine. No one can question Ohtani’s desire to win, nor can anyone question that Ohtani secured himself generational wealth. But Balelo’s spin here is, well, just that: spin. Ohtani isn’t running a charity, and despite his camp’s best efforts, his decision does affect both the other teams around the league and, more importantly, his fellow players. It remains to be seen what this massive deferral will mean for the free-agent market going forward — whether other stars will also start deferring more and more of their contracts, and whether they’ll be able to use the sticker price of Ohtani’s deal ($700 million) or the real value ($460 million) when negotiating their own contracts.