Ohtani to Dodgers for an ungodly amount of money

[Jason Ross]

Just now, Transmogrified Tiger said:

If Ohtani signed a straight up 10/460 deal when others had offered more, would we want that voided?  There's basically zero difference between that hypothetical and the actual deal, to Ohtani or to the CBT.

This greatly sets a precedent for players, however. And it allows teams to create situations in which they can push money off. I'd have no problem if Ohtani signed a straight 10/$460m. What I do have an issue is teams asking players to essentially, loan them, 0% interest free money. It also creates a situation where teams and owners can essentially, for the next few years, push these payments off to the next person. Why not differ a contract for 20 years if you're 80. You'll be dead. 

This isn't a good look for the league or the rules they implement on themselves. You want to defer some money? Fine. But this feels like a tax loophole, not a legitimate contract in the spirit of the rules they implemented, either. It feels like that old definition of porn. I can't define when it's wrong, but I know it when I see it. 

[Rob]

Just now, cl smooth said:

There’s been deferred money in long term deals before but nothing like this, right? MLB itself and the MLBPA are cool with a player getting ~97% of their total contract deferred until after the contract is over? 

I mean, there's a reason we celebrate Bobby Bonilla day every year. That was an early example of a pretty extreme deferral. And Scherzer's big contract with the Nationals deferred about half his pay.

This is the biggest deferral ever, no doubt. But as TT said, this isn't really a "loophole" in the CBT. He basically took a 10 year / $460 million dollar contract. And he also agreed to loan the Dodgers $440 million with no payments until 2034, and those payments will run until 2043. Over the course of that $440 million dollar loan, they'll pay him back in the amount of $680 million.

[mul21]

2 minutes ago, Rob said:

I mean, there's a reason we celebrate Bobby Bonilla day every year. That was an early example of a pretty extreme deferral. And Scherzer's big contract with the Nationals deferred about half his pay.

This is the biggest deferral ever, no doubt. But as TT said, this isn't really a "loophole" in the CBT. He basically took a 10 year / $460 million dollar contract. And he also agreed to loan the Dodgers $440 million with no payments until 2034, and those payments will run until 2043. Over the course of that $440 million dollar loan, they'll pay him back in the amount of $680 million.

Bonilla was a buyout of an existing deal though, not an original contract. This definitely feels sketchy. And to answer TT, yeah, I’d have been fine with 10/$460 straight up if LA was the determining factor. 

[ILMindState]

Ohtani heel turn. He was never going to any other team.  It was always going to be the Dodgers.  They just used the Blue Jays as leverage while they came up with this BS loophole.  

[Transmogrified Tiger]

12 minutes ago, 1908_Cubs said:

This greatly sets a precedent for players, however. And it allows teams to create situations in which they can push money off. I'd have no problem if Ohtani signed a straight 10/$460m. What I do have an issue is teams asking players to essentially, loan them, 0% interest free money. It also creates a situation where teams and owners can essentially, for the next few years, push these payments off to the next person. Why not differ a contract for 20 years if you're 80. You'll be dead. 

This isn't a good look for the league or the rules they implement on themselves. You want to defer some money? Fine. But this feels like a tax loophole, not a legitimate contract in the spirit of the rules they implemented, either. It feels like that old definition of porn. I can't define when it's wrong, but I know it when I see it. 

The player still has to agree to it though, and they have agents and lawyers and accountants to make the equivalency of value clear.  Plus there's reporting that this was Ohtani's idea to begin with.  If this deal had been reported as a 10/460 deal originally would we be calling this an abuse of the system?  In the way we talk about contracts that's what it is.

Let's ask ourselves this, do we think that the Dodgers offering and Ohtani accepting a straight 10/460 was possible/likely?  I have no reason to think the answer is no.  So in that case the main beneficiary of the deferrals is Ohtani himself(along with his agent and the players union).  They get the contract he was destined to sign and they get to hold up a new record number.  The Dodgers get the guy who wants to play for them at the CBT number they were always destined to offer.

[Thusly Boned]

5 minutes ago, ILMindState said:

Ohtani heel turn. He was never going to any other team.  It was always going to be the Dodgers.  They just used the Blue Jays as leverage while they came up with this BS loophole.  

That much is patently obvious now, particularly since it has been reported the deferrals were his idea.

He wants to win, and really only wanted LA. 

Does it make him a heel? I don't know, but it sure it irritating that the whole thing was a dog and pony show. But it also was what a most people were assuming (that he really only wanted to stay in LA).

Edited December 11, 2023 by XZero77

[chopsx9]

15 minutes ago, 1908_Cubs said:

 What I do have an issue is teams asking players to essentially, loan them, 0% interest free money.

But they aren't - thats why he's getting $680 and not $460.

[Tryptamine]

Not good for the game and it's going to cost baseball fans.

[Jason Ross]

1 minute ago, Transmogrified Tiger said:

The player still has to agree to it though, and they have agents and lawyers and accountants to make the equivalency of value clear.  Plus there's reporting that this was Ohtani's idea to begin with.  If it had been reported as a 10/460 deal originally would we be calling this an abuse of the system?  In the way we talk about contracts that's what it is.

Let's ask ourselves this, do we think that the Dodgers offering and Ohtani accepting a straight 10/460 was possible/likely?  I have no reason to think the answer is no.  So in that case the main beneficiary of the deferrals is Ohtani himself(along with his agent and the players union).  They get the contract he was destined to sign and they get to hold up a new record number.  The Dodgers get the guy who wants to play for them at the CBT number they were always destined to offer.

Well, it's also not just a 10/$460m deal and we can't treat is as such. I think that's unfair. It's that for real world but there's a lot going on here, as well. If the Dodgers wanted to sign him to that contract...fine by me. Pay the man $46m a year. But this puts a dangerous precedent in play. "You care about winning? You better defer your contract" and that's an unfair burden to place on these players. I really don't care who's idea it was in the end, Ohtani, the Dodgers...it's not good for baseball. This creates a few years, prior to the new CBA, where players can be exploited in these situations by multi-billion organizations. This feels like it can go south, really fast. Juan Soto is going to fee the pressure of this next offseason and he didn't ask for that, for example. Whether or not he ultimately has to do similar things, this wasn't the way MLB contracts had been working until...now. We'll see where they go from here, but it wouldn't be shocking to see MLB teams suddenly decide, as a whole, that large contracts will be offered in deferred payments from here on out (at least the big, 9-10+ year deals).

I think there some real, massive, underlying issues at play here. I think it's fairly gross. I also think it's genius accounting by both player and team, don't get me wrong. Great for Ohtani, he gets to be on the biggest team in baseball, and gets to be surrounded by amazingly awesome talented players. He gets to be the highest paid player. The Dodgers get the best player at a super acceptable CBT price and this contract will largely pay for itself. But I also think it goes against what the CBT is supposed to do per the owners, and I think it makes a dangerous precedent for other teams and players.

[Jason Ross]

3 minutes ago, chopsx9 said:

But they aren't - thats why he's getting $680 and not $460.

But they are. The Dodgers get to keep $680 (a loan) for 10 years. There's a 0% interest fee on this. He's getting $700m. It's just only going to be worth $460 in real world money. That's how a loan with 0% interest works.

[Rcal10]

What this tells me is it was the Dodgers all the way. He would not have done this for another team. Kind of sucks, but this is what it is. Cubs couldn’t do a damn thing about it. No way he does this for them. 

Edited December 11, 2023 by Rcal10

[chopsx9]

1 minute ago, 1908_Cubs said:

But they are. The Dodgers get to keep $680 (a loan) for 10 years. There's a 0% interest fee on this. He's getting $700m. It's just only going to be worth $460 in real world money. That's how a loan with 0% interest works.

No - they get to keep 460M for 10 years but have to payout 680.  In this scenario 460 is PD value of $680 10 years from now.

[17 Seconds]

this whole thing is a horsefeathers drag

Edited December 11, 2023 by 17 Seconds

[Rob]

How many young kids out there are going to be confused by all this contract business, do some research on it, and develop a budding interest in economics?

I gotta imagine it's more than one...

[CubinNY]

You kind of have to hand it to Ohtani. He’s getting his money and helping his team stay competitive. 
 

if he were on the Cubs every one one this site would love him. 
 

again, the Dodgers are a really good team. I’m not sure he makes the that much gooder. It’s hard to improve on 100 wins every year. I suppose we will see. 
 

 

[Jason Ross]

 

[Rcal10]

2 minutes ago, 1908_Cubs said:

 

What does this mean? Dodgers team payroll only shows $28M for him next year? Or will it be $46M? 

[Jason Ross]

3 minutes ago, Rcal10 said:

What does this mean? Dodgers team payroll only shows $28M for him next year? Or will it be $46M? 

No. It means when figuring out what the QO is next year, which incorporates the top 125 salaries in baseball, Ohtani's salary will be counted as $28m. The QO is the mean salary of the top-125. This, essentially, will lower the average of that top-125. How much? I'll admit and say "I suck hard at some math, so I'm not the guy to ask". But it will clearly effect that number in some fashion versus it being the CBT number ($46m) or the 10/$700m ($70m) it appeared to be on first look, as well.

Edited December 11, 2023 by 1908_Cubs

[Transmogrified Tiger]

11 minutes ago, 1908_Cubs said:

But this puts a dangerous precedent in play. "You care about winning? You better defer your contract" and that's an unfair burden to place on these players. I really don't care who's idea it was in the end, Ohtani, the Dodgers...it's not good for baseball. This creates a few years, prior to the new CBA, where players can be exploited in these situations by multi-billion organizations. This feels like it can go south, really fast. Juan Soto is going to fee the pressure of this next offseason and he didn't ask for that, for example. Whether or not he ultimately has to do similar things, this wasn't the way MLB contracts had been working until...now. We'll see where they go from here, but it wouldn't be shocking to see MLB teams suddenly decide, as a whole, that large contracts will be offered in deferred payments from here on out (at least the big, 9-10+ year deals).

Maybe I just lack imagination, but I really struggle to see the slippery slope created here.  There's zero question that if Ohtani wanted the money straight that he would've gotten it from someone, including the Dodgers.  Any team proposing this in free agency risks alienating the player, and there aren't so few winning teams that a very good team can leverage a player down(if that were true winning teams would just do this with pure AAV now).  The only way this persists is if a player is insistent on signing with a specific team and also being able to claim a specific top line contract number.  The unsavory side of it is on the player/union end of the deal.

 

I don't disagree that this is against the spirit of the way the CBA is designed, but I think in the same way that Ohtani the player is a unicorn, his contract is probably unlikely to have much imitation either.

[Rcal10]

4 minutes ago, CubinNY said:

You kind of have to hand it to Ohtani. He’s getting his money and helping his team stay competitive. 
 

if he were on the Cubs every one one this site would love him. 
 

again, the Dodgers are a really good team. I’m not sure he makes the that much gooder. It’s hard to improve on 100 wins every year. I suppose we will see. 
 

 

I am sure we would love it if it was us. And I hope next year this is something they look into with Soto. Doesn’t have to be as crazy. Maybe he makes $12M a year (spending money) for 13 years and then get $350M deferred. That gets him a $500M contract. But maybe only shows as $28m to $30m a year for team payroll purposes. Not as much a savings, but still good. Honestly this could change the way teams now make offers. But as 1908 said, puts pressure on the player to accept it. It does suck, but if this is the rule a high revenue team isn’t doing their job if they don’t at least try doing this.

[Jason Ross]

7 minutes ago, Transmogrified Tiger said:

Maybe I just lack imagination, but I really struggle to see the slippery slope created here.  There's zero question that if Ohtani wanted the money straight that he would've gotten it from someone, including the Dodgers.  Any team proposing this in free agency risks alienating the player, and there aren't so few winning teams that a very good team can leverage a player down(if that were true winning teams would just do this with pure AAV now).  The only way this persists is if a player is insistent on signing with a specific team and also being able to claim a specific top line contract number.  The unsavory side of it is on the player/union end of the deal.

 

I don't disagree that this is against the spirit of the way the CBA is designed, but I think in the same way that Ohtani the player is a unicorn, his contract is probably unlikely to have much imitation either.

Heyman's already posted how this will effect the QO. Instead of $46m being averaged in, which is the real world value of his contract, $28m will be averaged in. I mentioned in that post, I'm pretty bad at mental math, so I'm not sure how massive of an effect that's going to be...but it'll have an effect. And I'm not sure it's so easy as "a player has to want to go somewhere". We've seen the MLB act with collusion before, and I think this could open up a situation in which it happens again. I don't trust these owners or this league as far as you can throw them. The league is totally cool with owners, effectively, destroying their teams for tax breaks and a new stadium, and others who pocket CBT money.

I think it's nice to believe that this is the type of unicorn contract that won't be attempted again. I have a pretty negative view of the people who run this league and their ability to game an already rigged system.

Edited December 12, 2023 by 1908_Cubs

[Transmogrified Tiger]

LA Times Dodgers beat writer: 

 

[Jason Ross]

2 minutes ago, Transmogrified Tiger said:

LA Times Dodgers beat writer: 

 

Now I'm mad again. But this time at the Cubs.

Edited December 12, 2023 by 1908_Cubs

[JHBulls]

Goodbye to anyone’s hopes of signing Yamamoto after this.

But hey, at least they won’t need to do this in 12 months for Roki Sasaki when he’s paid peanuts anyway. 🤦‍♂️ 

[imb]

feels like more of an optics thing than a real issue

the $700m man playing for $2m a year so the best team in baseball can afford to consolidate even more good players. It sounds gross regardless of the LT implications