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With His $700 Million Deal, Shohei Ohtani Is Set To Become MLB’s All-Time Earnings Leader

December 10, 2023
in Business
With His $700 Million Deal, Shohei Ohtani Is Set To Become MLB’s All-Time Earnings Leader
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Outta There: Ohtani is leaving the Los Angeles Angels to join the Dodgers for $700 million over 10 years.

Ronald Martinez/Getty Images

The 29-year-old Japanese phenom’s new contract with the Dodgers is the largest in American team sports history.

Sho-Time came up big time in free agency. On Saturday, Japanese superstar Shohei Ohtani agreed to terms on a deal with the Los Angeles Dodgers reportedly worth $700 million over 10 years, according to ESPN’s Jeff Passan. In doing so, the two-way phenom secured the largest contract by total value in U.S. team sports history, surpassing his former Los Angeles Angels teammate Mike Trout ($426.5 million) and Kansas City Chiefs quarterback Patrick Mahomes ($450 million).

For a habitual record breaker like Ohtani—the only player in baseball history to record more than 10 wins as a pitcher and more than 30 home runs as a batter in the same season—it puts a new mark in his sights. If the 29-year-old plays out his new contract in full, he is poised to become MLB’s all-time leader in on-field earnings at roughly $742 million, eclipsing the mark set by Alex Rodriguez, who hung up his cleats in 2016 after making roughly $455 million, according to Spotrac.

Before Ohtani’s deal with the Dodgers, the only active player expected to collect enough money over the course of his career to challenge A-Rod for the top spot was the 32-year-old Trout, who is slated to top $480 million by the end of the 2030 season. To this point in his career, Ohtani has earned just over $42 million in six major league seasons.

Factor in endorsement income, and Ohtani is in a different league. Forbes estimates he earns at least $35 million off the field annually. By comparison, Rodriguez earned an estimated $35 million from endorsements, appearances and memorabilia across his entire career. Trout, meanwhile, pulled in an estimated $4 million in 2023—nowhere near Ohtani’s haul but still the fourth-best off-field total in Major League Baseball (behind Bryce Harper and Aaron Judge, as well as Ohtani).

Generally, baseball players have had relatively limited marketing opportunities because of the hyper-regionalization of the sport, an aging fan base, the grueling schedule of the season and competition from top athletes in other leagues. For example, NBA stars LeBron James and Stephen Curry earn an estimated $70 million and $50 million, respectively, from their off-court activities.

But Ohtani, who was born in Japan and played there professionally for five seasons, has grown into a marketing superstar since signing with the Angels in 2017. Handsome and charismatic, he has been a hit with brands on both sides of the Pacific, with 13 partnerships that include Fanatics and Topps in the U.S. and pharmaceuticals company Kowa, watch brand Seiko and Boss (formerly Hugo Boss) in Japan.

In January, he signed a long-term deal with New Balance that Chris Davis—the shoemaker’s chief marketing officer and the son of its billionaire chairman, Jim Davis—described as “probably most analogous” to an NBA signature sneaker contract. “With Shohei, we don’t believe that he’s a once-in-a-generation-type player,” Davis told Forbes in March. “We believe he’s a once-in-a-lifetime-type player.”

Ohtani’s success as a pitchman has balanced his on-field financial shortfall in the years leading up to his mega-contract. This past season, Ohtani was the highest-paid baseball player in the world, with an MLB-record $65 million in estimated total earnings before taxes and agents’ fees—even though his $30 million on-field salary ranked 15th in the league, according to Spotrac. Based on the average annual value of Ohtani’s new 10-year deal, his total yearly earnings could rise to $105 million for the upcoming year, blowing past his previous mark by $40 million. (Ohtani’s deal will reportedly include “unprecedented” deferrals, though, his own idea to help the Dodgers maintain payroll flexibility, according to The Athletic’s Ken Rosenthal.)

Still, for Ohtani, the delayed climb to the top of the earnings ranking was somewhat self-inflicted because he jumped to MLB for the 2018 season. As a 23-year-old, with less than six years of professional experience, Ohtani was subject to the league’s international signing rules, which limit the money teams can offer foreign prospects. Whereas past Japanese stars like Masahiro Tanaka ($155 million), Yu Darvish ($60 million) and, more recently, Kodai Senga ($75 million) arrived in America with lucrative deals, Ohtani joined the Angels for a paltry $2.3 million signing bonus and $545,000 league-minimum salary. Had he waited until his 25th birthday, the payday could have been massive.

Instead, Ohtani, who was the Angels’ designated hitter when he wasn’t pitching, became one of the best bargains in baseball. Even though injuries have limited him to just 72% of the Angels’ games throughout his career, he has managed to fill his trophy case with two American League MVP Awards, AL Rookie of the Year honors and two Silver Slugger Awards. In 2021, Ohtani became the first player in the 90-year history of MLB’s All-Star Game to be selected as both a hitter and a pitcher, a feat he repeated in 2022 and 2023.

Now, after six seasons without a playoff appearance, Ohtani joins a team that has reached the postseason in 11 straight years, won the World Series in 2020 and features a pair of fellow former MVPs in Freddie Freeman and Mookie Betts. His price tag may not have been cheap, but the Dodgers can certainly afford him. In addition to clearing more than $100 million off their payroll from 2023 to 2024 before signing Ohtani, the club is owned by private equity billionaire Mark Walter, who Forbes estimates is worth $5.8 billion.

MORE FROM FORBES

MORE FROM FORBESBaseball’s Highest-Paid Players 2023: Shohei Ohtani’s MLB-Record Total Lands Him At No. 1By Justin BirnbaumMORE FROM FORBESForget Bobby Bonilla. Chris Davis Leads MLB’s Highest-Paid Retired Players In 2023.By Justin BirnbaumMORE FROM FORBESBaseball’s Most Valuable Teams 2023: Price Tags Are Up 12% Despite Regional TV WoesBy Mike Ozanian

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : Forbes – https://www.forbes.com/sites/justinbirnbaum/2023/12/09/with-his-700-million-deal-shohei-ohtani-is-set-to-become-mlbs-all-time-earnings-leader/

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