General MLB Discussion, Winter 2023-24

[bkox]

I’m going to explain why Shohei Ohtani’s $700 million contract with the Los Angeles Dodgers will not equal $700 million in terms of MLB accounting or the present-day value of the deal.

When money in a contract is deferred, the competitive-balance tax number — the luxury tax — is discounted. With a source saying a “majority” of Ohtani’s contract is deferred, the discount could be significant. Typically, a CBT number is the average annual value of a deal — in this case $70 million. But depending on the size and length of the deferrals, Ohtani’s CBT number is likelier to wind up in the $40-50 million-a-year range, an enormous benefit for the Dodgers.

The deferrals also affect the net present value of the deal. There’s a rule of thumb across all walks of life: Money today is more valuable than money tomorrow, inflation being what it is. When you defer money, you’re taking less. The Dodgers are operating in an environment in which the prime rate is 8.5%. And with money today being so pricey, it lowers the present-day value of the deal by a significant margin.

Regardless, in the end, Shohei Ohtani will be paid 700 million US dollars by the Dodgers. It’s an obscene amount of money. It’s just going to be seen as less by the league’s accounting — and will allow the Dodgers to add even more around Ohtani as they try to win a championship.

— Jeff Passan (@JeffPassan) December 9, 2023

[zambonir]

Yeah I don't think people are going to be stretching their arms to pat Ohtani on the back for taking less money and helping the team, But in a way he did. On the other hand it's possible no other team was going to offer him more than 55 or 60.

[Aquapong]

I don’t even know what to say. How do teams get away with paying deferred money to keep AAV “reasonable,” but they are still paying the guy more after the contract is up.

[zambonir]

Because it's not real money to the teams or their owners. Either because they're rich or they're making money on all kinds of other ways, including the appreciation of their franchise. Or they're borrowing it.

With this player I'm sure he's worth it even if he doesn't produce equivalent WAR. I'm sure it will only be a day or two before we hear how many season tickets and corporate deals the dodgers have sold already

[bkox]

The question i have. When it was found out that Ohtani needed TJ surgery, almost everyone said it was going to affect his upcoming contract.. Did it? Would it have been bigger if he hadnt injured his arm?

[fish]

There must be an anticipated Japanese cable deal(s) that comes with his marketability to pay some of his salary. The dodgers do this deal anticipating they’ll make money from it…right?

[zambonir]

Not sure one team can make any kind of broadcast deal in Japan. But merch/branding. And maybe they get a % off streaming based on viewership?

What if they did the deal thinking they might win a couple of championships, rather than making money? Easier said than done of course.

[zambonir]

Stassi traded to the White Sox with Braves paying most of his salary. PTBNL going back.

[zambonir]

Betts' 12-year $365 million Dodgers extension included a $65 million signing bonus (spread out over the deal including a little bit deferred) and $115 million deferred. Spotrac says his tax # is 25.5 but that might be solely from the signing bonus not counting?

https://www.spotrac.com/mlb/los-angeles-dodgers/mookie-betts-15744/

[bkox]

What I think is amazing is that either teams didnt learn the lessons from the mega contract signings of Miggy, Votto and Pujols etc or they just dont care.

Harper, Turner, Betts, Ohtani, Judge, Machado, Bogaerts all signed through their age 39 year or later (might be others I missed). And yet if you look at age 35 and older hitters from this past season... its not good. only 26 hitters 35 and older appeared in MLB games this year. Only 6 of those managed to play more than 120 games. 8 managed OPS above 100. 9 managed bWAR above 1. But only 1 was worth more than 2.3. That was Goldschmidt at 3.5

[BostonRoss]

Hmm…the PTBNL must be someone useful to the Braves. They are effectively paying Stassi’s salary for the privilege of having David Fletcher.

[zambonir]

I'm assuming they bought a prospect, rather than MLB level help.

[bkox]

Your 2024 World Champions of Baseball.. The Kansas City Royals

Left-handed reliever Will Smith and the Kansas City Royals are in agreement on a one-year, $5 million contract, sources tell ESPN.

Smith, 34, made his big league debut with the Royals in 2012. He has won a World Series ring each of the last three seasons.

— Jeff Passan ( @JeffPassan ) December 10, 2023

[zambonir]

He'll get traded

[BostonRoss]

Winning world championships three consecutive years with three different teams has got to be a record. If I recall correctly, Don Baylor went to three straight World Series with three different teams, but only one of them won.

[bkox]

The Dodgers gave Shohei Ohtani $700 million to hit and pitch — but also because...

[zambonir]

I wonder what the Phillies (and other teams) will charge for Dodgers games.

[Philsmania]

Winning world championships three consecutive years with three different teams has got to be a record. If I recall correctly, Don Baylor went to three straight World Series with three different teams, but only one of them won.

IIRC, Eric Hinskie went to three straight WS from 2007-09, getting two rings sandwiched around being struck out by Brad Lidge to gloriously end the 2008 WS.

[BostonRoss]

Winning world championships three consecutive years with three different teams has got to be a record. If I recall correctly, Don Baylor went to three straight World Series with three different teams, but only one of them won.

IIRC, Eric Hinskie went to three straight WS from 2007-09, getting two rings sandwiched around being struck out by Brad Lidge to gloriously end the 2008 WS.

My brain apparently will not acknowledge that the 2009 World Series happened. But you are right. Eric Hinske accumulated four plate appearances in those three World Series.

[bkox]

A $900 ticket for Shohei Ohtani's Dodgers debut? Seat not included