REVEALED: Shohei Ohtani can OPT out of his eyewatering $700million at the LA Dodgers… and here’s how
Shohei Ohtani could opt out of his 10-year, $700 million contract with the Los Angeles Dodgers if one of two key executives is no longer in place, a person familiar with the deal told The Associated Press on Wednesday.
Ohtani, who will be formally introduced by the Dodgers at a news conference Thursday, will be allowed to terminate the deal if Mark Walter no longer has control over owner or president of baseball operations Andrew Friedman is no longer with the team, the person said.
The person spoke on condition of anonymity because the terms were not made public.
Ohtani’s deal, announced Monday, calls for 97% of the money to be deferred without interest and not be paid in full until 2043.
The Athletic first reported Wednesday that Ohtani’s deal contains a provision allowing him to opt out at the end of the season if the Dodgers make specific personnel changes.
Shohei Ohtani could opt out of his contract with the Dodgers if two executives don’t take their current positions.
The deal is still in the form of a letter of agreement between Ohtani’s representatives and the team, and a formal contract has not yet been submitted to Major League Baseball, the person said.
Ohtani’s contract calls for an annual salary of $70 million, and of the annual salary, $68 million is deferred without interest and paid in equal installments every July 1 from 2034 to 2043.
Ohtani will be introduced during a press conference at Dodger Stadium at Centerfield Plaza beginning at 3:00 pm PT.
On Wednesday, MLB said Ohtani broke Fanatics’ record for highest jersey sales in the first 48 hours of release, surpassing soccer stars Lionel Messi and Cristiano Ronaldo.
Ohtani was nowhere to be seen at the stadium Wednesday, where he met with teammates including seven-time All-Star outfielder Mookie Betts and reliever Joe Kelly.
“I had a chance to talk to him,” Kelly said, surrounded by children attending an outdoor holiday party accompanied by loud music.
“He was already training, already training, getting bigger and stronger. His hand seemed good to me.
Ohtani’s deal includes no trading and includes a hotel room while traveling, a premium luxury suite for home games and a full-time translator. Ohtani will donate an amount not to exceed 1% to Dodgers charities.
That’s thanks to a clause in his massive 10-year, $700 million megadeal he recently signed.
Ohtani last spoke to reporters on Aug. 9, two weeks before the injury, which required surgery and will keep him out of the mound until 2025. He had surgery on September 19, but the nature of it was not fully announced. Ohtani underwent Tommy John surgery on October 1, 2018.
A unique two-way star as both a hitter and pitcher, the 29-year-old left the Los Angeles Angels as a free agent after six years.
Kelly is changing numbers after agreeing to a one-year, $8 million contract with the team on Monday, opening up the 17th spot for Ohtani, who thanked him for the gesture.
“I wasn’t going to give it to just anyone,” Kelly said. “If Shohei continues to perform, he will become a future Hall of Famer and I can retire my number. This is the closest thing to the Hall of Fame.”
When asked what Ohtani gave him in return, Kelly replied: “Oh, there’s a list, but no comments.”
Ohtani spoke to the media infrequently during his time in Anaheim, leaving his teammates bombarded with questions about the enigmatic superstar.
Kelly said he was willing to answer Ohtani’s questions “maybe once a week.”
Ohtani’s move from Anaheim to Hollywood had fans on both sides of the Pacific flocking to buy Dodgers merchandise and inquire about tickets on the secondary market. The team has not yet begun selling single-game tickets for next season.
Ohtani is holding off on the deal except for $20 million until his contract is 10 years old.
“Every game will be sold out,” Kelly said. “Every game we play will be like a playoff atmosphere.”
Ahead of his 30th birthday on July 5, Ohtani has a .274 batting average with 171 homers, 437 RBIs and 86 stolen bases, and a 39-19 record with a 3.01 ERA and 608 strikeouts in 481 2/3 innings. Ohtani has 34.7 wins above replacement (WAR), according to baseball.
“I think overall it was a good performance for both sides,” Kelly said. The Dodgers are competitive every year, and it’s one of those things: He’s the highest paid player in all of sports, and we’ll still be able to add to our team every year when he becomes a Dodger.
There are three different estimates of the value of the contract in modern dollars.
– For luxury tax purposes, a discount rate of 4.43% is used and the cost is $460,767,685. This is the federal intermediate-term rate as determined by Internal Revenue Code section 1274(d) using the October 2023 rate. That figure means Ohtani’s Dodgers luxury tax bill would be about $46.1 million annually.
– For regular MLB payroll purposes, a discount rate of 10% is used and the value is $282,107,876. This is the JP Morgan Chase base rate plus 1%, rounded to the nearest full percentage point, as defined in Article XV(K) of the collective bargaining agreement.
– The Players Association valued the contract at $437,830,563.