The Los Angeles Dodgers and Shohei Ohtani have agreed to a record-breaking seven hundred million dollar contract, the first of its type.
Ohtani’s contract is not only the most in professional sports history, but it also has a never-before-seen twist. Sixty-eight million dollars of the two-time MVP of the American League will be saved for after the 2033 season. Over the course of his 10-year contract, Ohtani will receive $2 million a year in salary. The Dodgers will give Ohtani $68 million annually from 2034 to 2043.
Ohtani’s choice to postpone $680 million will allow the Dodgers to remain below the luxury tax threshold and provide additional funds for the team to use in building a roster around the Japanese superstar. Ohtani could potentially keep more of his earnings if he moves out of California before he starts earning his $68 million yearly salary because he won’t be required to pay state income taxes in that state.
Could more elite players take a cue from Ohtani and postpone payments to increase their teams’ chances of winning right now?
Ohtani’s estimated annual salary from endorsement deals ranges from $40 to $50 million. Few athletes can earn as much money from endorsements as Ohtani does, and even fewer will be inclined to postpone the majority of their deal.
Let’s introduce Bryce Harper.
According to Bob Nightengale of USA Today, Harper and his agent Scott Boras are asking the Philadelphia Phillies for an extension. Harper, who inked a 13-year, $350 million contract in March 2019, is still eight years into it as of October 31.
At $25 million annually, Harper’s value is only the 24th highest in Major League Baseball. His yearly pay will continue to fall among the league’s lowest due to inflation and the amounts that free agents are currently signing for. Harper has been a huge asset to Philadelphia over the past three seasons, leading the team to the National League Championship Series in 2022 and 2023 and winning National League MVP in 2021. He has completely embraced Philadelphia and grown to become one of the most adored sports personalities in the history of the city.
Harper is now employed by the team till his 39th birthday, and his contract has no opt-out clauses. Harper’s team doesn’t have much power. But what if he adopted a strategy similar to that of Ohtani?
Harper might talk to the Phillies about renegotiating his deal. In the NFL, players routinely modify their contracts, and very few are fully guaranteed. Since contracts in Major League Baseball are always completely guaranteed, it is uncommon for agreements to be restructured. However, it has occurred. Ryan Dempster delayed $3 million of his pay in 2010 to give the Chicago Cubs greater maneuvering power.
Harper may now extend the same offer to the Phillies, who have the second-highest payroll in sports, currently projected to be $222.1 million in 2024. The Phillies’ ability to spend big in free agency this winter seems to be limited as they are just below the luxury tax threshold.
In 2024 alone, Harper will owing over $28 million. Harper could postpone some of his compensation and provide the Phillies with some short-term financial relief. The Phillies might offer Harper additional years and money in the long run in return for the deferrals.
Harper’s contract is up for eight years and $196 million. What if the Phillies increased the value and duration of his deal in exchange for his deferring part of the money he is expected to make in the near future?
One of the lucky few Major League players who receives considerable compensation from endorsement deals is Harper. Harper earned an estimated $6.5 million in sponsorships in 2022 alone, according to Sportico.
Assume Harper postponed spending $15 million of his $25 million AAV. The Phillies would have an additional $15 million each year to spend on players as a result. With that, the Phillies might be able to sign Japanese sensation Yoshinobu Yamamoto or lockdown closer Josh Hader. Alternatively, they could take a completely different course.
Harper would earn more money in the long run and the Phillies would have more money to spend if both sides were ready to rework Harper’s contract in this way.
Is this kind of setup likely? Definitely not, given the lack of any evidence indicating that anything akin to this is even being considered. Nevertheless, this would undoubtedly be the best way for Harper to get even more fandom in Philadelphia, particularly if it made it possible for the Fightin’ Phils to win the Commissioner’s Trophy for the first time since 2008.
Check out the most recent episode of the Jack Vita Show for more MLB offseason material. MLB.com Los Angeles Angels beat writer Rhett Bollinger stopped by to discuss Ohtani’s historic Dodgers contract.
Leave a Reply