![]() ![]() In Ohtani's case, his AAV is not $70 million – $700 million over the stated 10 years of the contract – but something around $46 million because of those massive deferrals spread across many years.Īs another example, Max Scherzer signed a seven-year contract worth $210 million with the Nationals in 2015. For instance, a player on two-year, $20 million contract who's paid $5 million in year one and $15 million in year two is nevertheless a $10 million CBT hit in both years because that's the average annual value of his contract. For players on long-term contracts, their exact salary is in a given season is not what's relevant. A team's payroll for CBT purposes is calculated in terms of average annual value. The CBT is a penalty tax on payrolls in MLB that hits teams when they clear certain thresholds. Ardaya adds that the annual competitive balance tax (CBT, or luxury tax) figure for the Dodgers is expected to be around $46 million. Just to emphasize and reframe the key point, Ohtani agreed to defer $680 million of his $700 million deal with the Dodgers. ![]() The deferred money is to be paid out without interest from 2034 to 2043." "In an effort to enable the Dodgers to continue spending around stars Ohtani, Mookie Betts and Freddie Freeman, Ohtani agreed to defer all but $2 million of his annual salary - $68 million of his $70 million per year - until after the completion of the contract. The "unprecedented deferrals" originally reported by MLB.com were detailed Monday and are, indeed, unprecedented. Let's jump right into that most essential takeaway. Specifically, Ohtani and the Dodgers have agreed to massive deferrals on a scale not seen before in MLB. Indeed, the deal is notable not only for its total dollar figure but also for the way it's paid out. Needless to say, Ohtani's record-setting contract is very complicated - he will not be paid a straight $70 million per year for 10 years. Here are the largest contract in baseball history: It is the largest contract in sports history, eclipsing Lionel Messi's $673 million contract with FC Barcelona. ![]() The contract terms are staggering: 10 years and $700 million. Saturday afternoon, Ohtani announced he is signing with the Los Angeles Dodgers. In the end, Shohei Ohtani landed where most expected him to land. ![]()
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