Shohei Ohtani’s unusual payment structure in $700m Dodgers deal is straight out of Todd Boehly’s playbook for Chelsea transfers
Shohei Ohtani’s new record-setting $700 million contract with the Los Angeles Dodgers is the latest example of the shrewd financial creativity employed by owner Todd Boehly at Chelsea FC.
Before persuading Ohtani to switch the Angels for the Dodgers, Boehly was able to exploit a loophole in the Premier League's Financial Fair Play regulations to sign a number of high-profile footballers.
Since acquiring ownership of Chelsea in May 2022, the Premier League club have spent over $1 billion on transfers, spreading the cost of the players by signing them on very long contracts.
Premier League shareholders agreed on Tuesday to amend the amortisation rule, setting a five-year maximum on all new or extended player contracts.
Creative accounting similar to the method used by Boehly at Chelsea is at the core of Ohtani's record-breaking new contract.
In an attempt to allow the Dodgers to be as competitive as possible while the slugger/ace is in uniform, Ohtani has agreed to structure his historic deal so that he defers almost all of his guaranteed $700 million until the beginning of 2034.
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Ohtani will only receive $2 million a year while playing for the Dodgers over the next decade.
The “Japanese Babe Ruth” will mostly live off his endorsements, which were estimated to annually be in the $40 million range last season.
The Dodgers were already one of the most recognizable brands in Major League Baseball.
A team that is expected to compete for a World Series next season should only increase Ohtani’s marketability and off-the-field opportunities.
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Since Ohtani signed a 10-year deal with the Dodgers, the majority of his new cash won’t be paid out until after his playing contract with the Dodgers is complete.
Ohtani's $700 million contract easily surpassed Mike Trout's ($426.5 million) for the largest in baseball history.
The former Los Angeles Angel also eclipsed Lionel Messi's $673 million to set a new record for the biggest overall deal in sports history.
By limiting his annual payday from 2023-33 to just $2 million a year, Ohtani is following in the footsteps of NFL icon Tom Brady, who famously took less yearly money so he could help keep the New England Patriots’ dynasty intact.
The NFL has a hard salary cap, which restricts teams’ ability to hand out huge contracts to anyone who isn’t a franchise quarterback.
MLB doesn’t have a salary cap or floor, which makes Ohtani’s $2 million instalments for the next decade even more revolutionary.
In some ways, Ohtani and the Dodgers are subverting baseball’s financial system to allow a team that has won at least 100 games in three consecutive seasons to keep huge names such as Mookie Betts (12 years, $365 million) and Freddie Freeman (six years, $162 million) on the active roster at the same time.
But MLB teams have increasingly deferred large payments in recent years.
Until baseball enacts a rule change preventing the practice, Ohtani is playing within the rules while also outsmarting the game.
Former slugger Bobby Bonilla is infamously paid $1.1 million annually by the New York Mets on a 24-year plan that stretches until 2035.
“I want to clarify reports that the Dodgers consulted with me before giving all of the deferred comp to Shohei Ohtani," former Mets general manager Steve Phillips joked. "They did not. But I am sure glad they did it, because it takes me off the hook for Bobby Bonilla. July 1, 2024 just got way better for me."
Ohtani's two-way talent is supremely rare in baseball history.
The 29-year-old from Oshu, Japan hit 44 home runs with 95 RBIs, 102 runs, 20 stolen bases and a 1.066 OPS last season.
The two-time American League MVP also went 10-5 with a 3.14 ERA and 1.06 WHIP in 23 pitching starts.
Speaking exclusively to talkSPORT, former MLB star Chase Utley predicted last week that Ohtani would chose the Dodgers in free agency.
Utley described Ohtani as a truly unique player who is one of the most talented hitters and pitchers in the modern game.
“The game has changed over the course of the last decade alone. But over the last three decades, it’s completely changed from a financial standpoint,” Utley said.
“Yes, that is a lot of money to pay one player, but as of now you’ll be getting the most valuable player in baseball because of what he can do, and the market will be set at a certain point.”
Ohtani established a new financial bar for athletes across the world to attempt to reach.
Then the Dodger allowed his new team to remain as competitive as possible for the next decade by only accepting $2 million a year within a surreal $700 million contract.
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Ohtani will eventually get all of his money.
And the Dodgers will spend the next 10 years as the team to beat in MLB.