FILE – Los Angeles Angels starting pitcher Shohei Ohtani pitches during a baseball game against the Los Angeles Dodgers in Anaheim, Calif., June 21, 2023. Ohtani agreed on Saturday, Dec. 9, to a U.S. record contract $700 million for 10 years with the Dodgers. (AP Photo/Ashley Landis, file)

NEW YORK — Shohei Ohtani will receive just $20 million of his $700 million contract with the Los Angeles Dodgers over the next 10 years, with $680 million payable from 2034-43 in an unusual structure that gives the team bigger payroll flexibility in the coming seasons.

Ohtani's record deal, reached on Saturday, calls for annual salaries of $70 million, according to details obtained by The Associated Press. Of each year's salary, $68 million is deferred interest-free, payable in equal installments each July 1, 2034-43.

For baseball luxury tax purposes, the contract is valued as an annual addition to the Dodgers' payroll of about $46 million. Under the collective agreement, to calculate a team's tax payroll, the value of the deferred money is deducted at the medium-term federal rate. For all contracts this off-season, the discount will be at the October 2023 rate of 4.43%.

A unique two-way superstar as a hitter and pitcher, the 29-year-old Ohtani left the Los Angeles Angels as a free agent to sign with the Dodgers in a deal they announced Monday night.

“Dodger fans, thank you for having me on your team,” Ohtani said in a statement released by the club. “I can say 100 percent that you, the Dodger organization and I share the same goal – to bring World Series parades to the streets of Los Angeles.”

Ohtani's contract, combined with those of Mookie Betts and Freddie Freeman, increases the total deferred money owed to the three to $857 million from 2033-44.

Betts has a $365 million deal covering 2021-32 that includes $115 million in deferred salaries payable from 2033-44 and has the final $5 million of his signing bonus payable from 2033-35.

Freeman has a six-year, $162 million contract for 2022-27 that includes $57 million in deferred money payable from 2028-40.

The high points for deferred payments in Los Angeles are 2038 and '39, when the trio will receive $83 million, and 2040, when they will be owed $84 million.

By receiving the vast majority of the money when he presumably will not live in the United States, Ohtani also figures to have a tax benefit. California's highest tax rate for residents is 13.3%.

The two-time AL MVP has a number of endorsement deals that significantly increase his earnings beyond his baseball salary.

“On behalf of the LA Dodgers and our fans around the world, we welcome Shohei Ohtani to the Dodgers, the home of Jackie Robinson, Sandy Koufax and Hideo Nomo, three of the game's most legendary and innovative players,” said Mark Walter, president of the Dodgers and Guggenheim Baseball. “Shohei is a unique talent and one of the most exciting professional athletes in the world.”

Ohtani's dollar total is 64% higher than the previous baseball record, a 12-year, $426.5 million contract for Angels outfielder Mike Trout that began in 2019.

His average salary of $70 million is 62% above the previous maximum of $43,333,333 shared by pitchers Max Scherzer and Justin Verlander on deals they reached with the New York Mets. Ohtani's average salary nearly doubles the roughly $42.3 million he earned with the Angels. It also exceeds all of Baltimore and Oakland's payrolls this year.

However, for the luxury tax he will count only slightly more than Aaron Judge, who has a $40 million annual charge on the Yankees' payroll as he enters the second season of a nine-year, $360 contract. millions.


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“Shohei Ohtani is a generational player and it was an honor to watch him make history over the six seasons he spent in an Angels uniform,” the Angels posted on X, the social media platform formerly known as Twitter.

“We are extremely happy that Angels fans were able to watch him redefine what is possible in our sport. We thank Shohei for his many contributions to our franchise and the game of baseball. We wish him the best during the next chapter of his career.”



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