The Baseball Thread

[MHSL82]

Ohtani signs a $700M contract. $2M a year for 10 years, then $680M deferred, when he will no longer be playing.

So, I learned how the mechanics of this contract has to work, for ownership.

Ownership has to put $680M in an account, and they cannot touch it. The MLB Commissioner then has to check every year if every penny is there.

This because it's deferred money.

So, not every owner has $680M that they can put aside, and not touch, for the next ten years. Actually I'm not sure if that account gets checked for the next 10 years, once the deferred payments start. Or if it goes until the life of the contract, which would be twenty years.

I wonder if they could send $68 million every year to that account and insure that with some insurance (because no one wants to have a “trust me, it’ll be there” thing). Interest/investment amount would either have to be part of that $680 M or somehow else given to him. Does baseball have a cap or is that one of those things they tried but failed to get during strikes? If they have a cap, does he count toward $70 million on average every year?

 

[nuraman00]

No, they can't send $68M every year. And interest or investments do not count. It has to be the entire $680M.

Baseball does not have a cap, nor a floor. Owners don't want a cap, because some owners also don't want a floor. They are fine with spending as little as possible, and fielding a bad team.

There is a tax threshold. $46M does count against the luxury tax.

Ohtani's Dodgers contract has $680 million deferred, lowering tax value to $46 million annually

Shohei Ohtani will receive just $20 million of his $700 million contract with the Los Angeles Dodgers over the next 10 years, with $680 million payable from 2034-43 in an unusual structure that gives the team greater payroll flexibility in coming seasons

www.usatoday.com

 

[nuraman00]

College player Hagen Smith has 17K in 6IP.