Blake Williams/DodgerBlue.com
The Los Angeles Dodgers sent shockwaves through the baseball world with their signing of Shohei Ohtani to a 10-year, $700 million contract, which is the biggest deal in professional sports history.
Ohtani’s contract comes with unprecedented deferrals as he will earn only $2 million per season over the life of the deal. The two-way star will then receive $68 million per year from 2034-2043.
Ohtani was the most sought-after free agent in MLB history, and his signing could pay dividends for the Dodgers both on and off the field.
One financial expert believes the Dodgers’ massive investment in Ohtani will net them a substantial return in the long run, per Jack Harris of the L.A. Times:
“They’re getting a huge financial windfall for this contract [when compared to the $460-million present value disclosed],” said finance expert Morrie Aaron, founder and president of MCA Financial Group. “They’ll make a lot of money — a lot of money — on this thing.”
A rival agent said the Dodgers will earn close to $1 billion over the next decade by signing Ohtani:
“This may be close to an $800 million to $1 billion gain for the Dodgers over a decade,” the agent said, noting that if the team were to simply take the $680 million in deferrals and invest it — say, with an asset management firm like Guggenheim Partners, which is run by Dodgers owner Mark Walter — then the money could more than double in a decade’s time.
“They may be able to make $1 billion extra,” the agent reiterated.
An anonymous league executive previously noted the team that signs Ohtani would get a great return on investment.
Aside from his on-field production, Ohtani brings value to an organization through marketing, sponsorships and merchandise sales due to his immense popularity among fans.
After his signing became official, Fanatics announced that Ohtani’s No. 17 Dodgers jersey set a record for sales in the first 48 hours of release.
Shohei Ohtani contract includes language to assure Dodgers consider spending
Ohtani’s unique contract structure was presented by the 29-year-old himself as a way for the Dodgers to keep building a competitive team around him.
Prior to signing his deal, Ohtani sought assurances from the Dodgers that they would continue adding elite talent with the savings.
The Dodgers have made good on that so far by acquiring Tyler Glasnow and signing Yoshinobu Yamamoto.
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