Shohei the money...10 years from now

His contract is heavily deferred, so who are we supposed to be mad at?

Shohei the money...10 years from now

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There have been a lot of takes the last three days since Shohei Ohtani broke his own story and announced he was signing with the Los Angeles Dodgers. Most of those takes are awful.

The immediate reaction was, “I wanted the Cubs to sign him but $700 million is WAY TOO much money.” Do fans realize that teams don’t raise ticket prices just because they signed an expensive player? They raise ticket prices even if they don’t sign an expensive player. You really should stop rooting for billionaire owners to curtail their spending.

Here’s a handy guide to whether or not your payroll is sufficient. If you have a lot of really good players, it is. If you don’t, it’s not. Spend accordingly.

The reality is that Cubs fans were mad at Shohei for signing with the Dodgers and at the Dodgers for paying him that absurd amount of money. But absurdity is graded on a sliding scale. If you’re willing to spend $500 million on a player, who’s to say that you shouldn’t also be willing to pay him $700 million?

The reaction, of course, is more about the rejection. It’s a combination of not being willing to admit that not every player wants to play for your favorite team and your denial of the undeniable: that the people who own your favorite team would like to own a winner, but they don’t really NEED to own a winner. The average fan will always want to win more than any single member of the Garbage Family That Owns The Cubs™ does.

Then yesterday, the “it’s way too expensive” narrative was shot right in the ass when word came out that Shohei’s contract was even more heavily deferred than anyone thought. Over the weekend, some egghead had posted a hypothetical spreadsheet that the dopes over at Bleacher Na(ggrega)tion had breathlessly retweeted that showed that if the Dodgers had deferred $10 million per year of Shohei’s money ($70 million), it would only lower the average annual value of the deal to around $60 million per year. Hah, sucks to be you, Dodgers. You’ll have the best player in baseball on your team but just think about all of tax you’ll have to pay! It’s hardly worth it! That spreadsheet was just some dude pulling numbers out of his ass and fans who wanted it to be true acting like it was.

When the real numbers came out, we saw that the Dodgers and Shohei were, shockingly, much smarter than some random Twitter idiot.

In reality, the Dodgers are deferring $68 million per season. Somehow, Shohei will have to scrape by on a mere $2 million annual salary for the next ten years (plus the estimated $50 million he makes every year in endorsements), and then starting in year 11, he’ll start receiving that $68 million for the next ten years, He will also almost certainly move from California and find some place with no income tax and that would earn him an extra $84 million in tax savings. Let’s not hold a bake sale for him.

So, the next gut reaction was that the Dodgers and Shohei were ruining the sanctity of the beloved Competitive Balance Tax. These cahoots will not stand!

I even saw some galaxy brained idiot mad that Shohei used the Blue Jays for leverage. First of all, they do know he wasn’t actually in Toronto on Friday, right? And second, so what if he did?

Why oh why would Shohei cut such a sweetheart deal for the Dodgers? It’s not fair! It’s not fair to the Cubs and Giants and Angels and Blue Jays! Boo hoo hoo and all that shit. Baseball should investigate this and void the contract!

But the best part of this story is that every few minutes another shoe dropped.

So, whatever team Shohei picked was going to get this deal, if they chose to accept it. Kind of takes the “oh this is so unfair” out of it. Right?

Oh, whatever. Here’s the obvious, yet cold, hard truth.

Any shot the Cubs ever had of signing Shohei, even to a sweetheart deal like this, went tits up long ago. Back when he was shopping for his first team in the offseason before the 2018 season he had a very real interest in the Cubs. They were just a year removed from winning the World Series1, Theo Epstein was at his charming best and they still seemed like a model franchise. The biggest hurdle wasn’t that they weren’t located on the west coast, but that the National League didn’t have a DH. Shohei signed with the Angels and enjoyed great personal success, but even while paired with the other best player in baseball, the Angels never reached the playoffs. Meanwhile, the Cubs were getting progressively worse, the roster was stagnating—or worse—under self-imposed cost cuts and eventually they gave up and traded away anybody Shohei had ever heard of. Except for Ian Happ. Gotta lock up your stars.

Meanwhile, the Dodgers were in the midst of a run that they have extended to 12 straight playoff berths, with 11 NL West titles in those 12 seasons. The only year they didn’t win the West they won 106 games. Over that span, they have played in six NL Championship Series, three World Series and won one2.

You would forgive Shohei if his biggest concern was picking a team that was going to be a perennial playoff contender (the Dodgers) and not risk that he pick a new team that decides to tear it all down in the middle of his run (like he literally saw the Cubs do.)

He clearly wanted to play for the Dodgers, and can you blame him? Their ownership group, Guggenheim Partners, is made up of some guys from Chicago. They should be the ones who own the Cubs, but Interim Commissioner For Life Bud Selig loved nothing more than to fix ownership changes and we got stuck with the Omaha Hillbillies.

Oh, and Shohei doesn’t count $2 million towards the Dodgers payroll tax. The actual annual value of his contract was determined to be $46 million per year for the next ten years, and that’s what LA will pay the tax on. It’s the highest annual salary in baseball. That makes the annual value of his contract 10 years, $460 million, which is the highest in baseball history. He’s basically getting an extra $240 million because he’s deferring salary. For all of the dopes who push their glasses up and repeat, “Money today is worth more than money tomorrow,” that’s true, but it’s not as true when the money tomorrow is an extra TWO HUNDRED AND FORTY MILLION DOLLARS, all of which he’ll be paid before he turns 50.

The Dodgers signaled they were going to pay whatever it took to get him when they cut salary last year to $218 million and ducked under the payroll tax of $233 million for a season to reset it. Now they are going to blast past it for the foreseeable future.

And the reason they will is that they know better than anybody that the penalties for exceeding the various levels of the tax are almost all there just to provide cover for owners who want an excuse they can sell to a winningly gullible set of fans to support their true love, limiting their spending.

How do the Dodgers know what? Because for the past decade they just kept going into the tax. Why? Because they understood that having great players who cost money was better for winning than not having those players.

Despite paying a financial tax for being over, and having their first round draft pick routinely dropped 10 spots, and having limits imposed on their draft signings pool and their international signings pool, the Dodgers won more games than any other team in either league, sold more tickets than any other team in either league, won 100 or more games in five of the last seven full seasons, and have one of the top three farm systems in baseball.

One of the ways they accomplished this was their willingness to spend money in untaxed ways.

Think of how much credit Jed Hoyer got for hiring Craig Counsell. “And impact free agent not susceptible to the payroll tax.” That should be the norm for them.

While other teams were cutting their scouting staffs, player development staffs and analytics staffs (like the Cubs), the Dodgers kept adding to theirs. The Dodgers and Rays have the biggest front offices in the game. They do it for the same reason, despite their polar opposite financial situations.

They want to make every draft pick and every international signing count. The Rays because they don’t supplement those players with expensive free agents. The Dodgers because they want to sign as many expensive free agents as they can, and that puts them over the tax, so they mitigate those penalties by committing to be the best at identifying and developing talent.

And it works. They hit on an inordinate number of those picks and signings, and it’s not by accident.

It’s also proof that you can have it both ways. You can spend, and get great players and have a fun, winning team, and you can still develop young players.

The Cubs, and most teams, operate like it’s one or the other.

It is, if you’re not willing to do and spend what it takes to do it right.

It’s not like the Cubs don’t know how to defer money. Next year they have a $5 million deferral to pay out to a player.

Of course.

The good news is that now that Shohei is signed, the rest of the offseason signings can start. The Cubs have a lot of holes to fill, and it’s time to get cracking.

It’s also good news that the Dodgers, who also have some key holes to fill (mostly pitching) are now over the payroll tax limit by quite a bit.

The bad news? They don’t care.

No team should, but only the Dodgers are willing.


  1. A thing that actually happened, but seems more like a mirage as every subsequent year passes.

  2. Which only sort of counts because it was the weird, short season, neutral site Covid World Series.