No matter what he does or doesn’t do, Shohei Ohtani has become the talk of the town. A unicorn with a deal as unique as him, his contract is worth $700 million. But there’s a twist – for the next 10 years he will earn only a total of $20 million. With him choosing to defer 97% of his salary, Ohtani has set another milestone in his illustrious career. But amidst all this, agent Nez Balelo has played the role only a few can do.
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Such big contracts tend to reset the market, which has most executives sharing their opinions. Now Ohtani’s deal may have left fans all excited but it has had a reverse impact on the GMs and different teams’ management. And they’ve expressed their shock in the choicest of words.
Nez Balelo supported Shohei Ohtani throughout this journey
Both Nez Balelo and Shohei Ohtani chose to remain behind the scenes in their bid to get the best deal. It was reportedly Ohtani who gave Balelo the idea of deferring most of his salary. When the agent looked through the rulebooks, he realized there are no rules that limit the size of deferrals. That was when the lightbulb went off in Balelo’s head.
Ohtani was ready to defer his entire salary but Balelo convinced him to take $2 million per year due to the minimum salary rule (at least $740,000 next year). And that was how the talented agent created the most unique contract in sports history. Even though the deal was a genius on the Japanese phenom’s part, many executives and GMs worry that it may have set a bad precedent.
They showed their anger quite openly as The Athletic reported one executive said, “It’s a f—ing joke, it’s a complete joke. … This f—ing guy is going to get paid for 20 years.” Another agent took a different route, “This is the best player ever…You’re never going to be able to surpass it. No player will be more valuable. It will be 100 years before we see someone like him again. It’s the opportunity (lost) that is upsetting to me.”
This deal has allowed the Dodgers to invest in other players as well. This is exacerbated by the fact that the CBT value of this contract isn’t $700 but $460 million, turning this into a Win-Win for the Dodgers.
How the Contract works
Even though Ohtani is taking only $2 million, it doesn’t mean the remaining amount is good to use. From next year they will have to show the league that they setting aside his new AAV of $46 million. As a result, the Blue Crew will maintain an escrow account or some other financial tool.
This amount will theoretically be worth the $68 million they’ll have to pay later on. It helps that their luxury taxation value has been reduced from $70 million to $46 million.
Looks like everything about Ohtani is unique.
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Edited by
Arunima Bhanot