Ohtani gets 700M

[bfs3]

My concern would be less on the pure dollars and cents (agreed, the amount they’ll make from Japanese broadcast rights and other Japanese market revenue will be significant), it’s about resource allocation. MLB doesn’t have a salary cap but unless the dodgers got very aggressive with deferrals, this is going to eat up a huge chunk of their payroll space in relation to the luxury tax. I fear he won’t even play half of this as a top level pitcher based on his injury history. And while he’s a phenomenal Dan Hurley, $70M a year for an elite Dan Hurley is going to be an issue when it comes to fielding a competitive team if that’s all he can do in the out years.

That’s an understandable argument. He does throw 100 mph and pretty much every all star pitcher in baseball has had Tommy John surgery atleast once. He’s also known for an Ichiro level of preparation. If he pitches for half that contract 100 innings a year I still think it’s worth it. I’m sure they’ll cover his contract and probably by multitudes with a World Series win. They don’t need him to pitch until the playoffs anyways with 6/7 starting caliber young pitchers already. Their existing contracts and prospects will keep their team competitive for the 7 years of his contract even if they don’t add any more major players. They really don’t need him to pitch at all with the number of top pitchers in their system. I don’t think this makes sense for a lot of teams but the Dodgers would need to have several career ending injuries to not field a playoff team over the next 7 years. It seems every all star is demanding a 300 million dollar contract or more. I’m sure in 6/7 years there will be other teams with comparable payrolls.

 

[WestCoastHusky]

For people that are questioning the value of the contract, you are not seeing the big picture.

Perhaps the article below will share some light on why Ohtani is so valuable. As we all know, SF Giants tried desperately to get in on the Ohtani sweepstake but only to see him landing with the Dodgers. The entire Bay Area is still mourning today. If the Giants cant land Yamamoto to appease the fanbase after losing out other superstars in the recent years, I am not sure what will happen here.

The bottom line is Ohtani has 337 millions dollars impact on both USA and Japanese economies just in 2022. That is insane, and it will make that $70M per year investment seems like a bargain. There aren't many players that can affect countries and national GDPs like this.

Shotime in San Francisco? How Ohtani would impact Giants off the field

The Giants signing Shohei Ohtani can have a positive off-the-field ripple effect for the organization, the city of San Francisco and the Bay Area.

www.nbcsportsbayarea.com

 

[WestCoastHusky]

 

[WestCoastHusky]

 

[superjohn]

I guess this makes sense for the Dodgers who are feeling pressure to win now but the jokes are going to be great when Ohtani is going to be collecting those $68 million checks 8-10 years after retirement.

 

[bfs3]

I guess this makes sense for the Dodgers who are feeling pressure to win now but the jokes are going to be great when Ohtani is going to be collecting those $68 million checks 8-10 years after retirement.

It’ll probably be a different ownership group paying those checks anyways. I’m sure it’ll be taken into account when they pay 5 billion for the team. Plus a generation of Dodgers fans in Japan will probably keep buying merch long after he retires.

 

[superjohn]

It’ll probably be a different ownership group paying those checks anyways. I’m sure it’ll be taken into account when they pay 5 billion for the team. Plus a generation of Dodgers fans in Japan will probably keep buying merch long after he retires.

It shouldn't be allowed. MLB needs to step in and fix this.

 

[Deepster]

The amount of contracts like this that don’t work out are far, far more than them resulting in rings. The Dodgers didn’t sign him to win. They signed him to make money internationally off him for his entire prime. The merch and TV deal alone probably covers half of it.

 

[superjohn]

The amount of contracts like this that don’t work out are far, far more than them resulting in rings. The Dodgers didn’t sign him to win. They signed him to make money internationally off him for his entire prime. The merch and TV deal alone probably covers half of it.

There's never been a contract like this. This contract makes a mockery of the sport and is anti-competitive. Ohtani doesn't care about the contract money up front because he makes so much money on endorsements so the Dodgers basically get him for free for his playing career and will be able to buy an all-star team to put around him. It's shocking this is allowed. The other owners must be fuming, I wonder if MLB steps in and all the lawyers get involved.

 

[Mots010]

My head is spinning thinking of the compounding interest Ohtani is leaving off the table by deferring for 10 years. I bet it’s well into 9 figures even using conservative ROR. The dodgers can probably fund a huge portion of the back end with that interest alone.

 

[WestCoastHusky]

The amount of contracts like this that don’t work out are far, far more than them resulting in rings. The Dodgers didn’t sign him to win. They signed him to make money internationally off him for his entire prime. The merch and TV deal alone probably covers half of it.

I am pretty damn sure one of the most important conditions Ohtani signed with the Dodgers is the fact they win. They been in the post season last 11 years, so there is no doubt they will continue that trend with 3 MVPS in hitting order 1-3. By adding Ohtani the ace, they also upgraded pitching even though he can't pitch until 2025. If they land Yamamoto, which they can with this deal, Dodgers are looking pretty solid for years to come.

The only reason Ohtani can do this is because he will earn $50M+ this year just in endorsements. The next highest MLB player (Trout, Harper) earns about $5M to $6M per year. Ohtani by himself is an international brand that few can match in the entire world.

 

[Deepster]

There's never been a contract like this. This contract makes a mockery of the sport and is anti-competitive. Ohtani doesn't care about the contract money up front because he makes so much money on endorsements so the Dodgers basically get him for free for his playing career and will be able to buy an all-star team to put around him. It's shocking this is allowed. The other owners must be fuming, I wonder if MLB steps in and all the lawyers get involved.

There are always contracts like this. Same outrage and questions when Pujols signed a 10 yr 250m contract with the Angels.

 

[superjohn]

There are always contracts like this. Same outrage and questions when Pujols signed a 10 yr 250m contract with the Angels.

Pujols got the money when we was a player.

 

[HuskyHawk]

There's never been a contract like this. This contract makes a mockery of the sport and is anti-competitive. Ohtani doesn't care about the contract money up front because he makes so much money on endorsements so the Dodgers basically get him for free for his playing career and will be able to buy an all-star team to put around him. It's shocking this is allowed. The other owners must be fuming, I wonder if MLB steps in and all the lawyers get involved.

It’s smart for the player. He will not be in CA, paying those taxes when he collects most of it. The club can look at the inflation adjusted payout and realize it’s much lower than what it would be in current values.

MLB needs a hard cap or at least something that works similarly. That said, this is the type of contract more players should probably seek.

 

[Mots010]

It’s smart for the player. He will not be in CA, paying those taxes when he collects most of it.

if you have a choice of taking money now, or taking it in 10 years, the correct answer is always now. That kind of money invested, compounded over 10 years is an incredible amount to leave on the table.

 

[Deepster]

Pujols got the money when we was a player.

Deferred contracts are everywhere. The 3rd highest paid player on the Reds this year was Ken Griffey Jr.

 

[HuskyHawk]

if you have a choice of taking money now, or taking it in 10 years, the correct answer is always now. That kind of money invested, compounded over 10 years is an incredible amount to leave on the table.

He didn’t have that choice. Thats the fallacy here. Nobody was paying him that much in current dollars. He gets 50+m in endorsement money now. He will be fine. This sets his family up for generations.

 

[mauconnfan]

The Dodgers will make money off the contract winning or not. He’s an icon there’s no denying that. He’s a real good pitcher, not great. Doesn’t eat innings but steady 3.00 era is always welcome these days provided he can do that after the 2nd surgery. Hitting wise, looks like his best season just happened at 28. HRs RBI and BA, OBP all his highest. The question is, is he on the rise or just that solid .280/40/90 guy? Hideki Matsui had very similar numbers early in with the Yanks minus the HRs as an FYI.

I mean he’s a really good player and there’s no doubting that. The fact he can do both sets him apart no doubt. But he’s not a HOFer in either hitting (maybe because of HRs) or pitching. 700M? Nope

 

[Travelman6]

That's it, the last proof I need, we all live in a simulation controlled by an advanced alien race and each of us is controlled by someone in that advanced race and the alien controlling Ohtani just has access to all sorts of cheat codes. Has to be it.

 

[Mots010]

He didn’t have that choice. Thats the fallacy here. Nobody was paying him that much in current dollars. He gets 50+m in endorsement money now. He will be fine. This sets his family up for generations.

i had to read about this contract more. The way I understand it, it’s somehwat akin to earning interest on a 10 year/460 million dollar contract….hence the 700 million value in 10 years. Fascinating stuff.

 

[billythekid]

So how do they value the contract against the luxury tax? Is it $2M/year? $70M/year? $46M/year? I'm guessing it's the latter, which is still a hit to the tax, but not early as awful as $70M.

 

[navery12]

So how do they value the contract against the luxury tax? Is it $2M/year? $70M/year? $46M/year? I'm guessing it's the latter, which is still a hit to the tax, but not early as awful as $70M.

$46M on the luxury tax for the next 10 years since that's the present value of the contract

 

[bfs3]

i had to read about this contract more. The way I understand it, it’s somehwat akin to earning interest on a 10 year/460 million dollar contract….hence the 700 million value in 10 years. Fascinating stuff.

So how do they value the contract against the luxury tax? Is it $2M/year? $70M/year? $46M/year? I'm guessing it's the latter, which is still a hit to the tax, but not early as awful as $70M.

So is it 46 per year or is it just 46? Even if it’s per year that sounds pretty reasonable for 40/100 guy who should pitch around 100 innings a game. If the rest is pretty much interest then it’s not the same as what people initially were shocked by. Seems like it’s about as good a deal as these mega deals can be for a team. Especially considering he adds a tremendous amount of long term marketing value to go with the immediate endorsement dollars. Do the dodgers have their own channel like YES?

 

[Chin Diesel]

 

[FfldCntyFan]

So is it 46 per year or is it just 46? Even if it’s per year that sounds pretty reasonable for 40/100 guy who should pitch around 100 innings a game. If the rest is pretty much interest then it’s not the same as what people initially were shocked by. Seems like it’s about as good a deal as these mega deals can be for a team. Especially considering he adds a tremendous amount of long term marketing value to go with the immediate endorsement dollars. Do the dodgers have their own channel like YES?

At the moment the average annual present value of the contract is $46mm per year. I imagine that this will adjust during the term of the contract as a drop in interest rates (prime rate is higher than it's been in many years and could start moving lower during the ten years of the contract) would increase NPV.

 

[WestCoastHusky]

The Dodgers will make money off the contract winning or not. He’s an icon there’s no denying that. He’s a real good pitcher, not great. Doesn’t eat innings but steady 3.00 era is always welcome these days provided he can do that after the 2nd surgery. Hitting wise, looks like his best season just happened at 28. HRs RBI and BA, OBP all his highest. The question is, is he on the rise or just that solid .280/40/90 guy? Hideki Matsui had very similar numbers early in with the Yanks minus the HRs as an FYI.

I mean he’s a really good player and there’s no doubting that. The fact he can do both sets him apart no doubt. But he’s not a HOFer in either hitting (maybe because of HRs) or pitching. 700M? Nope

It is clear as day you haven't watched him play at all

Just glad MLB teams got real analysts. Dodgers weren't the only team that offered him the same contract. Based on your analysis, these MLB GMs must be insane to pay for just a "good" player who just had his second TJ this much money.

I just don't know whether to laugh or cry

 

[mauconnfan]

It is clear as day you haven't watched him play at all

Just glad MLB teams got real analysts. Dodgers weren't the only team that offered him the same contract. Based on your analysis, these MLB GMs must be insane to pay for just a "good" player who just had his second TJ this much money.

I just don't know whether to laugh or cry

Oh I’ve seen him play. He’s a really good player. There’s lots of guys batting .270 for their career, they just don’t pitch like he does. He’s great at HR hitter there’s no doubting that and those should go up in LA at that field. 50 will more than likely happen. He’s struck out 30% of his ABs as an FYI.

Laugh or cry I could care less how you feel. If he pitches again and well like he has he will be a shoe in HOFer based on doing both. And due to his HR appeal as long as he continues that will help boost his entrance if he blows his arm out again. Last year he put it all together batted .300 plus let’s see more of that rather than .260.

 

[bfs3]

Oh I’ve seen him play. He’s a really good player. There’s lots of guys batting .270 for their career, they just don’t pitch like he does. He’s great at HR hitter there’s no doubting that and those should go up in LA at that field. 50 will more than likely happen. He’s struck out 30% of his ABs as an FYI.

Laugh or cry I could care less how you feel. If he pitches again and well like he has he will be a shoe in HOFer based on doing both. And due to his HR appeal as long as he continues that will help boost his entrance if he blows his arm out again. Last year he put it all together batted .300 plus let’s see more of that rather than .260

He has between a 5-7 WAR for complete seasons and he’s had to adjust to MLB pitching/life. The injuries are a concern and they’re primarily related to pitching. Multiple star pitchers have had more than one TJ surgery and came back as all stars. If he only hits and he can stay healthy he can be a great hitter into his late 30s like many other players have been. I’m more worried about Judge staying healthy than Ohtani. I read a few years ago that the going rate in free agency was 8-10 million a year for each WAR. That was prior to many of these most recent deals for a typical player or all star. At 46 a year for 5-7 WAR it’s pretty standard.

5-7 WAR for a Dan Hurley is not common. Regardless of his batting average. He’s also improved each year and the prime for most hitters is 28-34. I wouldn’t be suprised if he continues to improve but if he hits .270 40+ hrs and 100 RBIs a year only, he’s still worth 46 million a year in today’s market. That’s ignoring his extra marketing value and pitching.

 

[bfs3]

At the moment the average annual present value of the contract is $46mm per year. I imagine that this will adjust during the term of the contract as a drop in interest rates (prime rate is higher than it's been in many years and could start moving lower during the ten years of the contract) would increase NPV.

Thanks. I had to read a couple articles to get a clearer answer.

 

[mauconnfan]

He has between a 5-7 WAR for complete seasons and he’s had to adjust to MLB pitching/life. The injuries are a concern and they’re primarily related to pitching. Multiple star pitchers have had more than one TJ surgery and came back as all stars. If he only hits and he can stay healthy he can be a great hitter into his late 30s like many other players have been. I’m more worried about Judge staying healthy than Ohtani. I read a few years ago that the going rate in free agency was 8-10 million a year for each WAR. That was prior to many of these most recent deals for a typical player or all star. At 46 a year for 5-7 WAR it’s pretty standard.

5-7 WAR for a Dan Hurley is not common. Regardless of his batting average. He’s also improved each year and the prime for most hitters is 28-34. I wouldn’t be suprised if he continues to improve but if he hits .270 40+ hrs and 100 RBIs a year only, he’s still worth 46 million a year in today’s market. That’s ignoring his extra marketing value and pitching.

That’s a fair assessment. Only in today’s and I like the guy. But people try to say he’s maybe the greatest of all time. Hardly in the conversation!