Every year on July 1, folks across baseball celebrate Bobby Bonilla day, where the Mets pay the former outfielder who retired in 2001 just under $1.2 million because of one of the great business deals in sports history, as he deferred the money owed on his $5.9 million contract in 1999 for eight percent interest starting in 2011 — which resulted in him getting $29.8 million out of the deal in total through 2035.
Fittingly, right as Bobby Bonilla Day finally is set to come to an end, a new deferred money king will be taking the throne, and his name is Shohei Ohtani. The Japanese star has a 10-year, $700 million with the Dodgers now after a wild free agency, but that deal will apparently feature an insane amount of deferred money to help L.A. spend to build the best team around him now. Fabian Ardaya of The Athletic and Jeff Passan of ESPN brought word on Monday that Ohtani will defer all but $20 million to the future, making $2 million per year while playing for the Dodgers and then making $68 million per year from 2034-2043.
Exclusive @TheAthletic: Shohei Ohtani will defer $68 million per year of his $70 million annual salary over the course of his 10-year, $700 million deal with the Dodgers, allowing the team to keep spending, according to a person briefed on the terms.https://t.co/IsnWlsbTq9
— Fabian Ardaya (@FabianArdaya) December 11, 2023
Shohei Ohtani's $700 million contract calls for him to be paid only $2 million a year for the next 10 seasons, with $680 million deferred until the end of the deal, sources confirm to ESPN.
The CBT hit on the contract is going to be around $46 million, a huge discount for L.A.
— Jeff Passan (@JeffPassan) December 11, 2023
Now, Ohtani isn’t collecting interest on this deal, so it’s not the same kind of come-up that Bonilla got, but it is a savvy business play for Ohtani and the Dodgers. According to Ardaya, Ohtani brings in approximately $50 million from off-field endorsements and deals right now, and that figure is likely to only increase with the Dodgers. That means he doesn’t need another $70 million annually right now, but once he’s nearing the end of his career or retired, he’ll be bringing in even more. There’s also the potential for him to save a lot in taxes if he’s no longer living in California when he starts taking on those deferred payments.
As Passan notes, by deferring that much, Ohtani’s hit on the Dodgers “competitive balance tax” sheet will only be $46 million, a savings of $24 million a year that they can now spend on other players. While baseball doesn’t have a salary cap, each team enters the year with a number in mind to spend and Ohtani taking less opens up more in that L.A. budget to build out the rest of the roster around the star trio of himself, Freddie Freeman, and Mookie Betts.
