Shohei Ohtani’s agent on decision to defer $700,000,000 deal: “Everything he does is impeccably well thought out”
Shohei Ohtani's Dec. 9 contract with the Los Angeles Dodgers set an all-time sports record. However, owing to some interesting maneuvering from Ohtani and his agent, it will be some time before the star sees the vast majority of the cash.
As the ink on the deal was still drying, Ohtani and his agent, Nez Balelo, revealed an ingenious plan. Ohtani will take a salary of $2 million per year, deferring the remainder until after his contract ends in 2034. By doing so, Ohtani is taking a pay cut of nearly $68 million per annum.
"Per reports, the deferment of Shohei Ohtani’s contract will equal $68M per year. That means he’ll only make $2M per year" - Fantom Sports Industries
The shrewd operating allows the Los Angeles Dodgers to save some $23.94 million on their luxury tax threshold. The remaining $680 million will be paid out over the decade succeeding his contract.
Although many have praised Ohtani for being selfless and immaterial, the play has wider repercussions for the team. It appears as though the Dodgers will have a lot more breathing room in the age of Ohtani than was previously expected, given the magnitude of the contract.
In a recent piece for Sports Illustrated, writer Tom Verducci quoted Balelo's take on the deal. An agent since 2006, Balelo is a former player who was central in hammering out Shohei Ohtani's record-shattering contract. In reference to Ohtani's decision, Balelo said:
“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"
After having earned $30 million playing for the Los Angeles Angels last season, Ohtani is taking a nominal $28 million paycut. However, whatever money was foregone will eventually find its way back to its rightful owner.
If only Shohei Ohtani's other suitors knew of deferment plan
Right up until the day of Ohtani's signing, several other teams, like the Toronto Blue Jays, were still trying to offer a deal that the Japanese star could not refuse.
As such, many organizations were coming to terms with the sacrifices they would have to make. Had they known about the deferment, they might have put even more cash on the table.