LOS ANGELES (AP) — Shohei Ohtani can opt out of it $700 million, 10-year contract with the Los Angeles Dodgers if neither key executive is back in office, a person familiar with the agreement told The Associated Press on Wednesday.
Ohtani, who will be formally introduced by the Dodgers in a news conference on Thursday, will be allowed to terminate his deal if Mark Walter is no longer the controlling owner or president of baseball operations, and Andrew Friedman is no longer with the team, the person said. The person spoke on condition of anonymity because the terms had not been announced.
Ohtani’s deal, announced Monday, says so 97% of the money is postponed Interest-free and not repaid in full until 2043.
The Athletic first reported Wednesday that Ohtani’s deal contains a clause that allows him to opt out at the end of the season if the Dodgers make specific personnel changes.
The deal is still in the form of a letter of agreement between Ohtani’s representatives and the team, and a formal contract has not been submitted to Major League Baseball, the source said.
Led by Walter, the private partnership Guggenheim Baseball Management purchased the Dodgers in 2012 for $2.15 billion. In his early years as controlling owner, Walter was a regular at Dodger Stadium. But his attendance gradually declined and he only attended a few matches last season.
Walter’s global financial services firm, Guggenheim Partners, is headquartered in Chicago and New York. He is a native of Iowa.
Friedman was hired by the Dodgers in 2014 after spending a decade with the Tampa Bay Rays. He gradually rebuilt the franchise and the team reached the World Series in 2008 despite working for one of the lowest salaries in the sport.
Friedman has an enviable record in Los Angeles, where the Dodgers won nine division titles under him, three NFL pennants and the 2020 World Series during the pandemic-shortened season. He overhauled the club’s farm system and reorganized and expanded the front office.
Ohtani’s contract calls for an annual salary of $70 million, and of the annual salary, $68 million is deferred without interest, paid in equal installments on each July 1 from 2034 to 2043.
As part of bargaining on June 21, 2021, MLB proposed banning deferred compensation, but the union rejected the concept and MLB dropped it.
Ohtani will be introduced during a press conference at Dodger Stadium’s Centerfield Plaza beginning at 3 p.m. PT.
MLB reported Wednesday that Ohtani broke the homers’ record for Top selling jersey Within the first 48 hours of release, it was topped by soccer stars Lionel Messi and Cristiano Ronaldo. Ohtani was out of sight on the field Wednesday, meeting up with his teammates, including seven-time All-Star outfielder Mookie Betts and reliever Joe Kelly.
“I had the opportunity to talk to him,” said Kelly, surrounded by children attending an outdoor party with loud music. “He’s been working out already, really grinding, getting bigger and stronger. His arm looked good to me.”
Ohtani’s deal includes a full no-trade clause and provides a hotel suite for road trips, a luxury suite for home games and a full-time interpreter. Ohtani will donate to the Dodgers charity an amount not to exceed 1%.
Ohtani last spoke with reporters on Aug. 9, two weeks before he suffered a pitching injury that required surgery and will keep him off the mound until 2025. He underwent surgery on Sept. 19, but the nature of the surgery has not been fully announced. Ohtani had Tommy John surgery on October 1, 2018.
A unique two-way star as a hitter and pitcher, the 29-year-old left the Los Angeles Angels as a free agent after six years.
Kelly switches uniform numbers After completing his one-year, $8 million contract with the team on Monday, he opened No. 17 to Ohtani, who thanked him for the gesture.
“I wouldn’t give it up to anyone,” Kelly said. “If Shohei continues to perform, he will become a member of the Hall of Fame in the future and I will be able to retire my number from the service. This is the closest I will get to the Hall of Fame.”
Asked what Ohtani would offer him in return, Kelly said: “Oh, there’s a list, but no comment.”
Ohtani spoke infrequently to the media during his years in Anaheim, leaving his teammates full of questions about the enigmatic star.
Kelly said he was willing to answer Ohtani’s questions “maybe once a week.”
Ohtani move From Anaheim to Hollywood it sent fans on both sides of the Pacific flocking to buy Dodgers merchandise and inquire about tickets on the secondary market. The team has not yet started selling single-match tickets for next season.
“It will be sold out every game,” Kelly said. “Every game we participate in will be a playoff atmosphere.”
Before his 30th birthday on July 5, Ohtani has a .274 batting average with 171 homers, 437 RBIs and 86 stolen bases as well as a 39-19 record with a 3.01 ERA and 608 strikeouts in 481 2/3 innings. Ohtani has a 34.7 wins above replacement (WAR), per Baseball Reference.
“I think all around it’s a good party for both parties,” Kelly said. “The Dodgers are competitive every year, and this is one of those things, he’s the highest-paid player in all of sports, and we’re still able to add to our team every year and he’s a Dodger.”
There are three different evaluations of the contract value in current dollars.
— For luxury tax purposes, a deduction rate of 4.43% is used and the value is $460,767,685. This is the average federal rate for the term as defined in Section 1274(d) of the Internal Revenue Code, using the October 2023 rate. That number means the Dodgers’ luxury tax payroll would be charged about $46.1 million annually to Ohtani.
— For MLB regular payroll purposes, a 10% discount rate is used and the value is $282,107,876. This is JPMorgan Chase’s base interest rate plus 1%, rounded to the nearest whole percentage point, as defined in Article XV(k) of the Collective Bargaining Agreement.
The players union valued the contract at $437,830,563.
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Bloom reported from New York.
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ABMLP: https://apnews.com/MLB
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