Shohei Ohtani's Lucrative Endorsement Earnings Justify Deferred Payments

Exploring the financial nuances of Ohtani's groundbreaking deal.

by Nouman Rasool
Shohei Ohtani's Lucrative Endorsement Earnings Justify Deferred Payments
© Mark Blinch/Getty Images

In a stunning move that shifts the paradigm of sports contracts, Los Angeles Dodgers' sensation Shohei Ohtani has signed a groundbreaking deferred payment deal, maximizing his earning potential both on and off the field. Formerly with the Anaheim Angels, Ohtani’s transition to the Dodgers—one of the wealthiest franchises in sports—significantly enhances his endorsement opportunities.

Ohtani's innovative contract structure allows him to earn the bulk of his salary post-retirement, a strategy reminiscent of Bobby Bonilla’s infamous arrangement with the New York Mets. This setup is not only legal but shrewd, ensuring Ohtani maintains a high standard of living long after his playing days are over.

The heart of Ohtani's financial strategy lies in his endorsement deals, which are currently the main source of his income. According to Bob Nightengale of USA Today, Ohtani is projected to rake in a whopping $65 million in endorsements this season alone.

Furthermore, he recently inked a deal to become the new technology ambassador for Rapsodo, underscoring his appeal and marketability beyond the baseball diamond.

Contract Complexities Explored

Josh Wilson of FanSided elaborates on the implications of Ohtani’s $700 million contract, which will be dispensed over two decades.

This arrangement raises eyebrows within the baseball community concerning the Dodgers' future team building and Ohtani’s personal tax implications. The contract could even spark a notable tax court case in the future, highlighting its complexity and uniqueness.

Despite a theoretical $206 million reduction in total earnings due to the deferred payments, Ohtani’s lucrative endorsement deals nearly compensate for this shortfall, with projections showing he could earn over $70 million annually from such agreements.

This amount is also likely to increase as his career progresses. For Ohtani, the trade-off is clear. The immediate financial sacrifice is mitigated by substantial, steady off-field earnings. By securing a guaranteed income stream for the decade following his retirement, Ohtani cleverly safeguards his financial future, demonstrating a strategic foresight that is as impressive off the field as his athletic prowess on it.

This approach not only ensures his financial security but also sets a new benchmark for athlete contracts in major league sports.

Shohei Ohtani