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It sounds outlandish, but this weekend, 670 The Score baseball insider Bruce Levine reported that the Angels' internal estimate of the annual revenue Shohei Ohtani generated for them was $100 million. I can't confirm that figure, but everyone to whom I have spoken puts the number between $70 million and $90 million. Having Ohtani not only raises the national profile of any team, but instantly creates huge marketing and advertisement opportunities in Japan. There's a feature-length documentary about the man on ESPN+ and (outside the US) Disney+ right now. This is not a normal free agent.
Given all that, this shouldn't surprise you, but it's an important thing to know: For many teams, there are two budgets for 2024 right now. There's one number the front office knows they need to stick to, and then there's another one, anywhere from $20 million to $40 million higher, that they need to stick to if they sign Ohtani. Entering the offseason, the Cubs know they're likely to exceed the first threshold of the competitive-balance tax rules in 2024. To stay below the second threshold, though, they would need to spend no more than $257 million. That's probably their de facto cap.
If they sign Ohtani, that changes. The new ceiling is the third threshold, at $277 million. Beyond that, the penalties get especially draconian, so it's unlikely that signing Ohtani would earn Jed Hoyer and Carter Hawkins any more wiggle room than that, but they would be given the flexibility to go all the way to the third threshold if they reeled in the biggest fish to hit open water since Alex Rodríguez. Part of that is the knowledge (held by all parties) that Ohtani has massive leverage, and that he will want to see evidence of a team's willingness and ability to field a consistent contender before signing. Another part, though, is the simple math described above. Realistically, he has no chance to get more than $55 million per year, and a relatively small chance to get even $50 million per year. That would just break baseball's salary scale too badly. If he's worth (taking a moving average from uncertain sources) $80 million per year, then merely having him on board is worth over $20 million each season.
Again, there are legitimate concerns here. The Rickettses might be willing to spend that way on an Ohtani-led team in the short term, but spuriously claim major losses and snap the purse shut in a few years if things don't go perfectly. Either way, Ohtani is a massive investment, and even for a team spending $300 million per year, a $50-million player is as big a problem if he's hurt or ineffective as he is a boon if he's playing as advertised. The threat that he'll be permanently diminished as a pitcher by this second elbow surgery is real. So is the danger that he'll age quickly at the plate, given all the extra energy he's put into the two-way project over the last half-decade. On balance, though, those are gambles well worth taking. The bonus any team gets by being the ones to take it almost offsets all the downside, anyway.
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