Shohei Ohtani’s $700 Million Deal with the Dodgers Raises Questions About the MLB Player Market

High-profile free agent deals are often seen as an opportunity to boost salaries for all players. However, super agent Scott Boras has expressed concerns about the impact of Shohei Ohtani’s new $700 million deal with the Dodgers on the overall player market. Boras revealed that the market for players has not moved despite this record-breaking contract.

The Present-Day Value of Ohtani’s Contract

The Major League Baseball Players Association (MLBPA) has assigned a present-day value of $437,830,563 to Ohtani’s contract, taking into account its massive deferrals. This valuation, based on the terms of the deal made available to player agents and obtained by The Athletic, surpasses the previous average annual value (AAV) record of $43.3 million held by Justin Verlander and Max Scherzer, both of whom are clients of Scott Boras.

According to Boras, the lack of any average annual value at or above $44 million is evidence of a strategic and managed effort to keep salaries in check. However, Boras did not specify who he believes is responsible for this effort.

Different Valuations for Different Purposes

It is important to note that the MLBPA’s valuation of Ohtani’s contract is based on a different formula than the one used for luxury-tax purposes. The luxury-tax calculation values the deal at $460 million. As a result, the Dodgers will be charged $46 million per season for Ohtani against their luxury-tax payroll, setting a new record for an individual player.

An Escape Clause and Additional Benefits

The terms of Ohtani’s contract, obtained by The Athletic, reveal an escape clause that allows him to opt out of the deal at the end of the season if there is a specific change in Dodger personnel. The exact personnel referenced in the clause is currently unknown. Both the Dodgers and Ohtani’s agent, Nez Balelo of CAA, have declined to comment on this matter.

In addition to the escape clause, Ohtani’s contract includes provisions such as a donation to the club’s charity (not to exceed 1 percent), a suite at Dodgers Stadium for all regular and postseason games, and an interpreter.

(Longtime baseball agent Scott Boras: Jake Roth / USA Today)