By: Christian Pagan
On December 9, 2023, Shohei Ohtani signed the largest contract in MLB history with the Los Angeles Dodgers, topping $700M over a ten-year span. The 2x MVP would go on to win his third MVP after hitting 54 homers and snatching 59 stolen bases this past season.
Ohtani helped the Dodgers claim their second championship in the last five years as they took down the Yankees in five games. This really didn’t come as a shock as the Dodgers boasted one of the best rosters in baseball.
What shocked everyone was when it was revealed that $680M of Ohtani’s contract would be deferred to 2034, thru 2043, at $68M annually. That meant from 2024-2033, Ohtani would make only $2M per year under contract with the Dodgers.
The Dodgers have also deferred money on other player contracts. Here are more examples:
•Mookie Betts signed a 12yr-$365M extension back in 2021. $115M is deferred from 2033-2044.
•Freddie Freeman signed a 6yr-$162M contract back in 2022. $57M is deferred from 2028-2040.
•Blake Snell signed a 5yr-$182M contract on November 26th, 2024. $65M is deferred from 2035-2046.
•Will Smith (not the actor) signed a 10yr-$140M contract extension back in March. $50M is deferred from 2034-2043.
You get the point. The Dodgers have deferred over $1B just between seven players from 2028-2046.
We all know of the infamous “Bobby Bonilla Day”, where Bonilla collects a $1.19M check from the Mets annually on July 1st until 2035. It’s a funny thing for baseball fans because Bonilla was cut by the Mets in 1999!
Just wait for Shohei Ohtani Day starting in 2034, when he collects a check for a whopping $68M!
The obvious reason the Dodgers keep deferring money is so they can pay high-quality players, like Ohtani, Betts, Freeman, for lesser amounts of money when under contract. This allows the Dodgers to keep their talented roster, but also gives them the financial freedom to go out and bring in even more talent.
For example, superstar Juan Soto headlines the 2025 free agency class, with a price tag expected to exceed over $700M. If Juan Soto signs with the Dodgers, which is a real possibility, there’s no doubt a large portion of his contract will be deferred.
There are many reasons why the Dodgers can defer so much money. But the main two reasons are because the MLB doesn’t have a salary cap or floor, and because Los Angeles is one of the largest markets in all of sports.
Without a salary cap or floor in the MLB, there’s no limit or threshold a team has to spend on a roster. The New York Mets had the highest payroll last season at $315M and the Oakland Athletics had the lowest at only $62M.
In 2023, the Dodgers brought in $549M in revenue, which was second behind the Yankees, who brought in $679M. With the Dodgers having one of the best brands in sports, they’re given the financial flexibility to defer money and maintain their superteam.
Think of it as an investment. The Dodgers are investing in their current roster/window to win as many championships as possible. With doing that, they’ll pay the large amount of money it costs to assemble the superteam over the next few decades. Acquire the talent now – pay the money later.
If you’re the Dodgers, you’re okay with the deferred money. Whatever to keep the superteam intact. If you’re another team, especially a medium/small market team, you’re furious.
If you support small market teams like the Tampa Bay Rays, the Cleveland Guardians, or the Cincinnati Reds, you have to be somewhat sick to your stomach. Small market teams don’t have the financial ability to defer large amounts of money like the Dodgers can. Not only that, they simply don’t have the financial ability to sign multiple star players to large contracts.
Instead, small market teams rely on talent development and use the “moneyball” strategy most of the time. Small market teams focus on nurturing and developing prospects up to their true potential, trade them at their peak, receive a handful of prospects, and start the process all over again. If you’re a Guardians or Rays fan, you’ve seen this process quite a bit.
With the Dodgers deferring money and acquiring top-tier talent, it shrinks the competitive field in the sport of baseball. Small-market teams’ opportunities to acquire talent will get smaller and smaller because of this. The rich get richer and the poor remain.
Overall, the Dodgers strategy to invest in their current championship window with deferring large amounts of money isn’t just affecting their future, it’s affecting the league. It makes it harder for smaller market teams to acquire top talent and have a legitimate shot at winning a championship. It may be time for the league to step in and start considering changes that would balance the competitive and financial levels for all teams.
Image from https://www.mlb.com/dodgers/ballpark/information