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Shohei Ohtani shocked the baseball world after signing a 10-year, $700 million deal with the Los Angeles Dodgers. It is the most significant contract ever signed by a professional athlete.
Ohtani's deal trumps the 10-year, $450 million deal NFL star quarterback Patrick Mahomes signed with the Kansas City Chiefs. It also tops the contract of future Hall of Famer Cristiano Ronaldo's $536 million deal for 2.5 years.
Ohtani will defer much of his contract while he is with the Dodgers. He plans on deferring $68 million per season. With the deferment, the team is saving nearly $24 million.
While he signed a deal for $700 million, the contract is being valued at $437,830,563, according to the Major League Baseball Players Association.
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Shohei Ohtani's hit towards the luxury tax will be about $46 million annually. The value also accounts for a three percent projected inflation rate.
The CBT refers to the Competitive Balance Tax, a tax on teams who go over a predetermined payroll threshold. For the 2024 season, the threshold is set at $237 million.
With Shohei Ohtani deferring much of his contract, how does this help the Dodgers?
Shohei Ohtani's deferment really helps the Dodgers. They can now spend more money on other players, increasing their odds of winning the 2024 World Series.
This is great for a team that still does not have their starting rotation figured out yet. Clayton Kershaw is a free agent and will miss the start of the season if the team re-signs him. Kershaw underwent shoulder surgery after the season ended.
It has been reported that the team is interested in acquiring Rays pitcher Tyler Glasnow. Glasnow is coming off a solid season where he started 21 games, compiling a 10-7 record with a 3.53 ERA.
Another name the team is tied to is Yoshinobu Yamamoto. Yamamoto is the top-rated pitcher on the open market and would be a great addition to the rotation. He would work as a frontline starter and would pair nicely alongside Ohtani.
