After signing Shohei Ohtani officially to a 10-year, $700MM dollar deal on Monday, there was a lot of talk about this move in terms of financials. The main reason for that being the news that Shohei Ohtani will only be making $2MM per season, for a total of $20MM over the decade that he will be playing with the team, from 2024-2033. Then he would receive $68MM payments in deferred money from the $680MM left over on the contract, every year, without interest. Whether or not this is legal under the terms of the current CBA (Competitive Bargaining Agreement) has been argued, disputed, but also utterly shown as resoundingly yes. Yes, no matter if you agree with it or not, it is legal, and cannot be challenged. But, we’re here to discuss the Dodgers’ books after their big three player contracts are up. Freddie Freeman, Mookie Betts, and Shohei Ohtani, the shared faces of the franchise. You’d think that they are going for it all over the next decade, right? Well, it’s not as simple as one would think, actually.
First up is Freddie Freeman, whose contract with the Dodgers actually shows their Front Office’s genius on display, but to a lesser extent than that of what we see with Shohei Ohtani later on. He, too, will have deferred payments, which dropped an original 6-year/$162MM deal to 6-years and $148,195,494 (per Spotrac) towards the CBT. He’ll continue to receive $27MM (Cash salary of $20MM from 2022-24, $15MM from ’25-27) in base pay each season until his contract ends after the 2027 season, and then he will receive $57MM in deferred payments from 2028-2040, finishing when he will be 50 years old. This is not to say that he can’t re-sign with the Dodgers after 2027, when he will be 37, but he’ll already have put in 16+ years into the Majors, and we don’t know if Ohtani will be a two-way player at that time, or only a DH for the team. It is possible that Freeman could still play 1B for LA, or another team, for a couple of years, but the future of his health is unknown, only his money is. This most likely opens up that position for the Dodgers, who don’t currently have a replacement of Freeman’s ability, unless Michael Busch steps it up after a weak offensive showing in his MLB debut this season, he would be 29 when Freeman’s contract is over, however. There’s also Jake Gelof who is only 21 and looks to be the perfect age to develop over the next few seasons, then make his debut a season or so before Freeman’s contract is up. He would, however, need to make the transition from 3B to 1B as he hasn’t played there yet in the Minors. This of course doesn’t account for future draft picks, trades, or signings.
Second up is Mookie Betts, whose 12-year/$365MM contract (per Spotrac) with the Dodgers also has $115MM in deferred payments spanning 2033-2044 (when he will be 51 years old), as well as a $65MM signing bonus paid through 2021-2035 (when he will be 42 years old). The deferred payments helped offset the signing bonus somewhat; his actual base salary being $17.5MM in 2021, escalating up to $27.5MM at the end of his contract in 2032. However, through those 12 years, the Dodgers will take a consistent $25,554,824 Luxury Tax hit for every season that he plays with them, again another smart way to mitigate the CBT damage in the latter half of his extension with the use of deferrals and an escalating base pay that is heavy at the end of the contract. Dave Roberts announced that Betts will be the teams starting 2B in 2024 and forward opens a spot in RF, presumably filled by Jason Heyward this upcoming season. Andy Pages is on the 40-man roster and will most likely see his debut in 2024 as the teams’ fourth Outfielder. If that doesn’t work out, the Dodgers have Jose Ramos in Double-A, who could prove to be a backup to Pages if he continues to hit consistently with Tulsa in 2024.
Finally, it’s Shohei Ohtani and his industry-shattering 10-year/$700MM Free Agent deal with the Dodgers that has a massive $680MM in deferred payment, only taking on $2MM yearly from 2024-2033, making his deal into essentially a 10-year deal/$460,814,760MM (per Spotrac). The reigning AL MVP and his representation at CAA were apparently the ones who offered this extreme idea, so that whoever he signed with (this was not a Dodgers-exclusive deal) could still have payroll flexibility, and continue to build a competitive team around the global star. With players and their contracts in Freeman and Betts, this move allows the team to “only” take a $46,081,476MM Luxury Tax hit, rather than what would’ve been a $70MM Luxury Tax hit, blowing the team well past the first Tax tier. Instead, the Dodgers still have several million dollars to spend on other Free Agents for 2024 and beyond, in the hopes of winning a championship. Yes, Shohei Ohtani will be owed an astounding, and probably team-anchoring $68MM in deferred payments for a decade, from 2034-2043. There’s obviously no replacing Shohei Ohtani, so I won’t even bother naming names here.
They are hedging their bets on the immediate future, hopefully the next couple of years where Ohtani is a two-way player again and not simply a DH. One where Freeman, Betts, and Ohtani are all playing their best, and the Dodgers add pieces around them to create a juggernaut of a team from 2024-2027, when Freeman could possibly leave. After that, if Freeman does leave, Betts could be next to leave after 2032, then Ohtani after 2033. The Dodgers are known to have a decent Minor League system, but as we have seen recently, they are willing to gut it for trades, or simply spend their way to the top. Could the team be competitive from 2024 through 2033? Yes, they could be, but they will have heavy deferral payments from 2034-2043 to multiple players. But I know they will be from at least 2024-27, and they need to make it count.
