Reports: Ohtani to defer $680 million in contract with Dodgers, will earn $2 million per season

Shohei Ohtani will defer over 97 per cent of his $700-million contract with the Los Angeles Dodgers until the end of the deal, according to multiple reports.

ESPN’s Jeff Passan reports that the reigning AL MVP will earn $2 million each season in his record-breaking 10-year deal, with $680 million being deferred to 2034-2043.

He will earn $68 million per year over that span.

Passan reported that the Competitive Balance Tax (CBT) hit will come in at around $46 million for the Dodgers. In MLB’s collective bargaining agreement, the CBT threshold will be $237 million in 2024.

Per MLB, “A club that exceeds the Competitive Balance Tax threshold is subject to an increasing tax rate depending on how many consecutive years it has done so.”

The first year of exceeding the tax rate results in a 20 per cent tax on all overages, the second year carriers a 30 per cent rate on all overages and after three years or more, the tax on all overages is 50 per cent.

According to FanGraphs’ Roster Resource, Los Angeles’ estimated final 2023 payroll was $236 million — $3 million higher than the $233 million threshold last season.

Passan shared “that there is a specific article in the collective-bargaining agreement that addresses” deferred money that states there are no limitations on the amount of money that can be deferred in a contract.

The deferrals were reportedly proposed by Ohtani to give the Dodgers the opportunity to continue adding to the roster after making him the highest-paid player in MLB history.

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