Also, Buster Olney’s “why is he negotiating in private?” aged rather poorly.
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I’m sure the crack squad of MLB journalists will have an explainer on this online soon.
eta: I’m almost certain they use “annual average value” of a contract for CBT purposes. I have no idea how deferrals fit into this.
I need an emergency podcast of people losing their minds over this.
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Totally crazy.
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Agreed. Teams shouldn’t get to offer $70 million annually to a player but only have a certain percentage of their salary count towards the CBT due to deferring some payments until the contract expires.
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They do use AAV for the purposes of calculating the CBT. However, after doing some reading, I’m confused as to whether deferred salary reduces the annual AAV.
Screenshots from this write up: PART IV: Competitive Balance Tax Implications in MLB Spending Optimization | Pitcher List.
Ohtani $700M/10 years to the Dodgers. I hope they’re over the CBT every year.
Remember, MLB approved the contract.
In the NHL, years ago, the NJ Devils signed Ilya Kovalchuk to a very long contract, gaming the system and causing a big fan reaction. The backlash forced the NHL to crack down in a major way. Ohtani can’t make it 24 months without TJS so the length of this contract is in itself a game as the dollars imply him both pitching and hitting as he is only a DH batting.
The Dodgers didn’t break any rules under the terms of the contract and the current CBA, so MLB had no grounds to reject the contract.
However, I wouldn’t be surprised if small market and mid market owners push really hard for a salary cap once the current CBA expires in 2026. Shohei Ohtani is making more than the entire Oakland A’s and Baltimore Orioles’ 2023 payrolls and less than four million less than the 2023 payrolls of the Rays and Pirates. He’s making over 75% of the entire 2023 payrolls of the Royals, Reds, Marlins and Guardians, too. That’s why I said this contract may be causes the league to finally institute a salary cap system.
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For a guy who quit on his teammates with 20 plus games to go.
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Apology for not noting I was replying to/agreeing with your post, at least in direction. I doubt a cap comes but there will be changes for long-dated deals, as the NHL did…
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Ohtani is a great player but at some point, LA could be paying $70mm/year for a DH/corner outfielder. Who knows his longevity pitching after 2 major arm surgeries. This could be the worst contact in the history of sports.
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No big deal. My apologies for not recognizing you were agreeing with my post, too.
I’m sure the amount of deferred money in this deal is going Bobby Bonilla look like a rank fucking amateur in comparison.
By the way, everyone is assuming this deal is back-loaded and thus they are confused as to how it lowers AAV. The way the Kovalchuk contract lowered AAV was to append several years at “minimum wage” after he would be retired by rights. Based on what is being claimed here, it sounds to me like Ohtani’s is a front-loaded deal.
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Re: CBT calculations and deferrals—some back of the napkin math based on guesses about how much is deferred puts the CBT hit at about $61M/year. I doubt the deferrals are so extreme that the number would end up being much lower than that.
It still is ridiculous that the Dodgers could potentially shave 9 million off their annual CBT hit by deferring some of Ohtani’s salary payments until he retires. That shouldn’t be allowed.
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Equivalent to 46 Godzillas Minus One, and without the charisma or atomic heat blast
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Looking forward to Roberts pulling him in the 4th in game 1 of the Division Series.
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