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Ohtani’s $700 Million Deal, Explained: Why He Takes $2 Million a Year for Now

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4 days ago

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Shohei Ohtani’s contract with the Los Angeles Dodgers is easy to read wrong. The headline says one number. His paycheck, for now, says a very different one. Both are true, and the gap between them is the whole story.

In December 2023, Ohtani agreed to a 10-year contract worth $700 million with the Dodgers, according to details obtained by The Associated Press. On paper, that works out to annual salaries of $70 million, according to The Associated Press.

Most of the money comes later

Here is the part that makes the deal unusual. Of each year’s $70 million salary, $68 million is deferred, with no interest, according to The Associated Press. Deferred is a plain word for a simple idea: the money is earned now and paid later.

So Ohtani receives $2 million a year during the playing years of the contract. The Associated Press reported he will receive just $20 million of the $700 million over the first 10 years, with $680 million payable from 2034 to 2043. When those later payments start, they come in equal installments each July 1, at $68 million a year, according to The Associated Press.

In plain terms: $2 million a year for 10 years, then $68 million a year for 10 years. That is the full $700 million, paid over 20 years instead of 10.

Why a player would agree to wait

A contract is not only about the total. It is also about timing. By taking most of his pay after the playing years end, Ohtani left the Dodgers with more room to pay other players while he is on the team. A stronger roster around him helps the team compete now, which is the period Ohtani can affect on the field.

There is also a cost to waiting. Because the deferred money carries no interest, according to The Associated Press, a dollar paid in 2038 does not buy what a dollar paid today buys. That is why the same contract can have two honest values: the $700 million promised, and a lower value in today’s terms.

Baseball’s own accounting shows that difference. For purposes of the luxury tax, the contract is valued as a yearly addition to the Dodgers’ payroll of about $46 million, according to The Associated Press — not the full $70 million a year, because so much of the money arrives so far in the future.

Not the only deferred deal in Los Angeles

The Dodgers have used the same tool with other stars. The Associated Press reported that Ohtani’s contract, combined with those of Mookie Betts and Freddie Freeman, raises the Dodgers’ total deferred money owed to the three players to $857 million from 2033 to 2044, and noted there is no limit, under the collective bargaining agreement, on how much a contract can defer.

That is the lesson in this deal for every fan who sees a headline number. Ask two questions. How much is promised in total? And when is it actually paid? With Ohtani, the answers are $700 million in total, according to The Associated Press, and most of it long after the last game covered by the contract has been played.

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We Speak Financials

Formula 1’s Money Boom in America

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16 hours ago

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October 27, 2026

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A generation ago, Formula 1 treated the United States as a nice place to visit. Today it treats America as the engine room. Three U.S. races, a Las Vegas event the sport promotes itself, and team values that now rival the biggest franchises in American sports tell a story that is less about lap times than about money — and the money is moving fast.

Start with the valuations. In Forbes’ November 2025 ranking of Formula 1’s most valuable teams, Ferrari led the grid at an estimated $6.5 billion, with Mercedes second at $6 billion and McLaren third at $4.4 billion. Across all ten teams, the average valuation reached $3.6 billion — up 89 percent since 2023, according to Forbes — and every single team on the grid was valued at $1.5 billion or more. A cost cap introduced in 2021 turned teams from spending contests into controlled businesses, and investors have priced them accordingly.

Then there is Las Vegas. Formula 1 did something in Vegas it does almost nowhere else: it promoted the race itself, buying land, building a permanent pit facility and collecting the ticket and hospitality revenue directly. The inaugural 2023 race generated an estimated $1.5 billion in total economic impact for the city, according to analysis by Applied Analysis reported by the Las Vegas Convention and Visitors Authority, including $884 million in visitor spending — with attendees spending about 3.6 times more than the average Las Vegas visitor. The race drew a global television audience reported at 59.3 million.

The audience story backs up the asset story. The inaugural Las Vegas race pulled 1.3 million U.S. viewers on ESPN despite a 1 a.m. Eastern start, and the sport’s American calendar — Austin, Miami and Las Vegas — now gives sponsors three premium weekends on U.S. soil instead of one novelty stop.

Austin’s long-running race and Miami’s event, added in 2022, round out the American trio, giving teams, sponsors and broadcasters a season-long presence in the sport’s largest commercial market rather than a single annual visit.

Put it together and the boom explains itself: capped costs, soaring team values, a self-promoted American flagship race, and sponsors paying record rates to stand next to all of it. Formula 1 did not just find America. It found America’s wallet — and America’s investors found it right back.

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