10 Year, 700 Million Deal: Shohei Ohtani Received Most Expensive Sports Contract

Shohei Ohtani has inked a 10-year, $700 million deal with the Los Angeles Dodgers, making it the most expensive sports contract in history. The deal, reported by ESPN’s Jeff Passan, not only shatters MLB records but also places Ohtani in a league of his own in terms of financial compensation.

A Billion-Dollar Benchmark

$700 million over a decade, a sum that constitutes 70% of a billion dollars. This extraordinary contract not only eclipses previous MLB records but propels Ohtani into a realm of financial prominence previously unseen in the history of professional sports.

Sports Economics

Ohtani’s deal goes beyond the confines of baseball, reaching unprecedented heights in the broader sports landscape. Here are some key ways in which Ohtani’s contract is reshaping the intersection of sports and money:

  • 1. Largest Known Contract in Sports History
    Baseball has long been associated with colossal contracts, but Ohtani’s deal now stands as the largest known contract in the entire realm of sports, surpassing Lionel Messi’s previously leaked $674 million contract with FC Barcelona.
  • 2. Dodgers’ Record-Breaking Free Agency
    The Dodgers, with a single stroke of the pen, have made history by securing the most expensive free agency in MLB history. Ohtani’s deal alone surpasses the combined value of contracts for star players Corey Seager, Marcus Semien, and Jon Gray in the Texas Rangers’ record-setting offseason.
  • 3. Ohtani’s Deal Trumps Teammates’ Contracts
    Ohtani’s deal dwarfs the contracts of his two highest-paid teammates, Mookie Betts and Freddie Freeman, whose combined earnings fall short of Ohtani’s monumental contract. This highlights the extraordinary financial commitment made by the Dodgers.
  • 4. A Fraction of Dodgers’ Total Value
    Remarkably, Ohtani’s deal is valued at 35% of the Dodgers’ total worth when the Guggenheim group acquired the team for $2 billion. This stark contrast underscores the financial dynamics within baseball and the Dodgers’ unique position.
  • 5. Ohtani’s Annual Value vs. MLB Payrolls
    Ohtani’s average annual value (AAV) of $70 million places him ahead of the entire projected 26-man payrolls of several MLB teams, including the Cincinnati Reds, Kansas City Royals, Pittsburgh Pirates, and Oakland Athletics, according to Cot’s Contracts.
  • 6. Surpassing Combined Free-Agent Deals
    In a humorous twist, Ohtani’s deal alone matches 86% of the combined value of the largest free-agent deals in MLB, NFL, and NBA – a testament to the magnitude of his contract.
  • 7. Exceeding MLB Stadium Costs
    Ohtani’s contract surpasses the construction costs of all but two MLB stadiums, emphasizing the colossal financial commitment made by the Dodgers.
  • 8. Ohtani vs. Andrew Friedman’s Rays Payrolls
    Comparing Ohtani’s deal to the cumulative payrolls of Andrew Friedman’s frugal Tampa Bay Rays teams, spanning from 2004 to 2014, reveals the staggering financial shift from the past to the present.
  • 9. Outweighing NHL Team Valuations
    If the Dodgers had missed out on Ohtani, the funds allocated could potentially buy several NHL teams, as six teams are valued at less than $700 million.
  • 10. Ohtani vs. Women’s Sports League Payrolls
    Ohtani’s contract outpaces the entire annual payrolls of several women’s professional sports leagues, including the WNBA, NWSL, Athletes Unlimited, WTA, LPGA, and PWHL combined.

The Signing Day

On December 10, 2023, Shohei Ohtani took to Instagram to announce his decision to sign with the Los Angeles Dodgers, turning down pursuits from the Toronto Blue Jays, LA Angels, and the Chicago Cubs. The 10-year, $700 million deal, revealed by Jeff Passan, has marked the richest in North American sports history.

Timeline:

DateEvent
December 10, 2023Shohei Ohtani announces on Instagram that he has agreed to sign a 10-year, $700 million contract with the Los Angeles Dodgers.
December 10, 2023Jeff Passan of ESPN reports the details of Ohtani’s contract, highlighting its significant deferrals and groundbreaking value.
October 2023Shohei Ohtani concludes a historic MLB season, winning his second unanimous AL MVP award.
September 2023Ohtani suffers a torn UCL in his right throwing elbow, leading to Tommy John surgery on September 19.
Summer 2023The Dodgers, shedding salary to create financial flexibility, position themselves for the Ohtani sweepstakes.
2017 to ’21Lionel Messi’s $674 million contract with FC Barcelona stands as the largest known sports contract before Ohtani’s deal.

Ohtani Impact

Ohtani’s impact on the Dodgers and the sport at large extends beyond the financial realm. The two-time AL MVP, fresh off his second unanimous AL MVP award, delivered a stellar 2023 season, batting .304 with 44 home runs and boasting a 10-5 record with a 3.14 ERA. However, a torn UCL in August led to Tommy John surgery, sidelining him from pitching until 2025.

What This Means for Baseball

For the Dodgers, it signals a new era of financial commitment and a potential powerhouse lineup featuring Ohtani, Freddie Freeman, and Mookie Betts. The global appeal of the Dodgers, particularly in Japan, is set to soar with the addition of Ohtani.

FAQs:

Q1: Is Ohtani’s contract the largest in sports history?

A1: Yes, Ohtani’s 10-year, $700 million deal is the largest known contract in the history of professional sports.

Q2: How does Ohtani’s contract compare to other sports contracts?

A2: Ohtani’s deal exceeds the combined value of the largest free-agent deals in MLB, NFL, and NBA.

Q3: How does Ohtani’s contract impact the Dodgers’ financial landscape?

A3: Ohtani’s contract represents a seismic shift in the Dodgers’ financial strategy, surpassing previous records and reshaping the team’s payroll dynamics.

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