Shohei Ohtani contract guaranteed money: Breaking down the reported earnings of two-time MVP after $700,000,000 Dodgers move

The baseball world was stunned after two-way phenom Shohei Ohtani signed a blockbuster deal with the LA Dodgers. His 10-year, $700 million contract is by far the largest in professional sports, and it surpassed the combined contract value of Bryce Harper and Aaron Judge.

However, there are a lot of deferrals in his contract, which might have gone unnoticed in the public eye. And ESPN analyst Jeff Passan went into the details of his contract, which will reflect the contract's true value.

The Dodgers are going to pay him $700 million over the next decade, but the present-day value of the contract will be far lower. Money tomorrow is far more valuable than money today, and going by that and adding inflation to it, Ohtani's deal will wind up being less than the hyped $70 million a year.

As per Passan, MLB discounts deferrals when calculating the amount teams are charged under the competitive balance tax (CBT) accounting system, so Ohtani's deal is expected to cost between $40 million and $50 million per year, rather than the $70 million per year a straight contract would.

This opens up a lot for the Dodgers, who would like to inherit more star players and build a team around the two-way superstar. Shohei Ohtani's contract gives the Dodgers the flexibility to spend heavily, despite having a payroll that exceeds the initial luxury tax level of $237 million but does not necessarily exceed the $293.3 million figure set by Los Angeles in 2022.

Shohei Ohtani's deal disclosure was a cinematic one

The former Angels star's free agency lived up to its billing, with anticipations soaring between the Toronto Blue Jays and the Dodgers to sign him.

The last 30 hours before he declared his destination saw misguided reports that said that Ohtani was on a flight from South California to Toronto, highlighting the possibility of him signing with the Blue Jays.

However, the reports were anything but true, as Shohei Ohtani took to his Instagram at 3:03 pm ET to announce that he'll be joining the Dodgers.

Ohtani apologized for taking so long to arrive at a decision and also expressed his gratitude to his former team, the Los Angeles Angels.