Dec 7, 2024, 1:59 AM
Dec 5, 2024, 12:00 AM

Is $156 million too low for Alex Bregman?

Highlights
  • Shohei Ohtani signed a $700 million deal with the Los Angeles Dodgers in December 2023.
  • Ohtani's contract includes significant deferred payments that affect its actual value for teams.
  • Juan Soto may pursue a contract worth $600 million or more, raising questions on the future of player negotiations.
Story

In December 2023, Shohei Ohtani agreed to a landmark 10-year contract worth $700 million with the Los Angeles Dodgers, a deal that significantly surpasses the previous record set by Mike Trout of $426.5 million. Notably, Ohtani's deal includes $680 million in deferred payments, which complicates its value. For the luxury tax calculations, the average annual value is estimated between $28 million and $49.3 million based on different discount rates. With this new precedent, Juan Soto, one of baseball's brightest stars, is contemplating his own future contract, which could range between $600 million to $900 million over a possible 10-to-15 years duration. This creates an intriguing discussion about deferred money and its impact on player contracts moving forward. Players' associations and team managements are deeply analyzing how these deals will affect the financial landscape of Major League Baseball, especially given that Ohtani's total deferred payments could extend beyond a billion dollars owed to multiple players by 2046. The situation highlights the shifting dynamics in contract negotiations in baseball and how deferred compensation plays into a franchise's financial strategy. With Soto in search of a lucrative deal, the variance in contracts and individual team strategies regarding deferred payments may greatly influence his next contract, potentially reshaping the market further.

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