Historic Value

Ohtani's 10-year, $700 million contract is the largest in MLB and North American sports history, surpassing Patrick Mahomes' $503 million deal and Mike Trout's $426.5 million contract.

Deferred Payments

The contract includes unprecedented deferrals, with Ohtani deferring $68 million per year of his $70 million annual salary, resulting in him being paid only $2 million over the next 10 seasons.

Opt-Out Clause

The deal has a unique opt-out clause tied to the Dodgers' personnel changes. Ohtani can opt-out if specific Dodgers executives are no longer with the team.

Contract Structure

Despite the headline figure, Ohtani's contract's real value for luxury tax purposes is estimated at around $460 million over 10 years, averaging $46 million per year.

Present-Day Value

Due to the deferrals and the time value of money, the contract's present-day value is significantly less than the $700 million reported figure.

Salary Cap Management

 The deferred payments allow the Dodgers greater payroll flexibility and help manage their luxury tax situation.

Tax Implications

The deferral might enable Ohtani to potentially move to a lower-tax jurisdiction in the future, impacting the taxes owed on the income.

Future Payouts

Ohtani will receive the deferred $680 million after the 10-year contract period, essentially extending his income from the Dodgers into his 40s.

Guaranteed Earnings

Despite the complex structure, Ohtani is guaranteed the full $700 million from the Dodgers.

Breakdown of Earnings

Ohtani's contract averages $70 million per year and $1.35 million per week, setting new highs in MLB contract averages.