Shohei Ohtani signs with ????

[jncuse]

I don't think people in America fully understand how large local viewership numbers are for Toronto compared to the average MLB team - in part due to entire country being able to be used as the local market. Average MLB team has local viewership of about 200,000 a game. Toronto leads all of MLB with around 900,000 (2022 figure) and they own their broadcasting platform.

 

[BillSU]

I don't think people in America fully understand how large local viewership numbers are for Toronto compared to the average MLB team - in part due to entire country being able to be used as the local market. Average MLB team has local viewership of about 200,000 a game. Toronto leads all of MLB with around 900,000 (2022 figure) and they own their broadcasting platform.

OHTANI SIGNED WITH THE LOS ANGELES DODGERS TODAY,(12/9/23), FOR $700M FOR 10 YEARS.

 

[CuseFaninVT]

Absurd.

 

[jncuse]

OHTANI SIGNED WITH THE LOS ANGELES DODGERS TODAY,(12/9/23), FOR $700M FOR 10 YEARS.

Not sure if the all-caps is some sort of troll or not.
But OK for the info.

 

[jncuse]

Based on what I have been reading on-line seems the "Present Value" of the contract might be closer to 10/500-550 .. which is still crazy.

Lots of deferred payments on the contract, which will help with minimizing the Dodgers luxury tax bill or perhaps even keeping them below the tax line.

As an aside, the luxury tax for baseball, while punitive, is nowhere near as punitive as the NBA's.

 

[BillSU]

Not sure if the all-caps is some sort of troll or not.
But OK for the info.

jncuse, No secret messaging or trolling about Ohtani just felt like typing it in all caps.

 

[dan7800]

Great player, but nobody is worth that.

 

[Arangeman]

Great player, but nobody is worth that.

I’m sure you know better than the Dodgers brass

 

[jncuse]

jncuse, No secret messaging or trolling about Ohtani just felt like typing it in all caps.

No problem and thanks - I also confused you with someone else.

 

[STEVEHOLT]

Well at least I only let my self get enthralled and excited over this for about 1 day before being letdown as a Toronto fan. The Kawhi situation was like a 3 week drama as soon as the NBA Finals ended.

Seems like Toronto was used by his agent as secondary leverage to drive up the price to get to his preferred destination -- it wouldn't have surprised me if Toronto had made as big or even a bigger offer. Shohei knows LA and the Dodgers are an elite winning organization that he is looking for. Dodgers made most sense for him.

Don't lay low on Rogers to drive up salaries(Toronto owner) - as they owns the Jays, a lot of media / sports media, and communication platforms a superstar player like Ohtani had substantial off the field revenue capabilities that he offered to Toronto ownership compared to other MLB teams.

when i saw 7 as the first number in the deal, i was no longer that sad the jays didnt get him. There is no possiblity of him outplaying that deal. If he hits like an MVP and pitches like a cy young winner for 10 straight years, the deal would be "fair" . And he isnt pitching for the first year and a half. Hard pass.

 

[Capt. Tuttle]

Great player, but nobody is worth that.

#1. Not your money.
#2. They have run the numbers. Assuming health and production over the course of the contract, he will bring the Dodgers more revenue than they will pay him from increased ticket sales/prices, jersey sales, local tv for the huge Japanese presence in SoCal, and I bet they will be selling broadcast rights of their games to Japan for a boatload of money.
#3. The measure of worth in business is: does the employee make you money? (In my industry a revenue producer needs to bring 4X their compensation in production to be profitable to me.) If they do that then, by definition, the employee is worth the salary.

 

[STEVEHOLT]

#1. Not your money.
#2. They have run the numbers. Assuming health and production over the course of the contract, he will bring the Dodgers more revenue than they will pay him from increased ticket sales/prices, jersey sales, local tv for the huge Japanese presence in SoCal, and I bet they will be selling broadcast rights of their games to Japan for a boatload of money.
#3. The measure of worth in business is: does the employee make you money? (In my industry a revenue producer needs to bring 4X their compensation in production to be profitable to me.) If they do that then, by definition, the employee is worth the salary.

Point 2 is not a given. I’ve heard execs argue against it . I don’t know. I’m not an economist. But I’ve heard this point refuted

 

[MSOrange]

 

[JustPherU]

Great player, but nobody is worth that.

I guess that depends on how he plays over the life of the contract, I think it’s a tad much myself.

 

[Arangeman]

He’s the most marketable player in baseball. He does 40 mil a yr in endorsements. The next closest is Judge at 4 mil. The Angels had 22 Japanese sponsors.

He’s the Taylor Swift of Japan. Pretty sure the Dodgers have some thoughts on how to leverage this. Any exec refuting this is a moron or just salty.

 

[CuseFaninVT]

As an aside, this morning some random Toronto fan did some research of private jets coming in to Toronto. They found one going from Anaheim to Toronto, and there have been thousands of people following the flight path all day. It has now just landed in Toronto.

Whether it is the same one as above or not, Jon Morosi, a fairly good source (but not at the repute of Passan or Rosenthal either) claims there is indeed a flight.

Was listening to the radio just now and they think this tip was strategically placed by Ohtani’s people in order to drive up the price from the dodgers. Morosi was just the useful idiot.

 

[Arangeman]

#1. Not your money.
#2. They have run the numbers. Assuming health and production over the course of the contract, he will bring the Dodgers more revenue than they will pay him from increased ticket sales/prices, jersey sales, local tv for the huge Japanese presence in SoCal, and I bet they will be selling broadcast rights of their games to Japan for a boatload of money.
#3. The measure of worth in business is: does the employee make you money? (In my industry a revenue producer needs to bring 4X their compensation in production to be profitable to me.) If they do that then, by definition, the employee is worth the salary.

International broadcast rights are negotiated by MLB and revenue is split between all 30 teams. But they did acquire millions of new Dodger fans. Guessing they might buy some crap.

 

[jncuse]

We getting sucked again! Toronto fans can't help themselves..
(That is the CN Tower, a landmark in Toronto)

 

[jncuse]

Was listening to the radio just now and they think this tip was strategically placed by Ohtani’s people in order to drive up the price from the dodgers. Morosi was just the useful idiot.

Yes I have heard theories
#1. CAA (Ohtani's agent) contacted Morosi.
#2. Robert Herjavec, a CAA Client as well, was helping CAA by taking the flight.

 

[althea]

These deals will be banned soon. Let me guess, in 2034 he moves out of California.

https://x.com/jonheyman/status/1734351564301557819?s=46&t=s63UBb_cWzAfyxcYKFKKzQ

 

[Zelda Zonk]

Ohtani is deferring $68 million per year.
So, his Dodger salary is $2 million per year for the next ten years. Dodgers can now probably go get Yoshinobu Yamamoto, too.

Insane contract. And probably quite smart. He'll live on the 2 mil plus the 50 million in endorsements per year. Then collect $68 mil per year for ten years when he's 40... And the Dodgers can keep buying more players to put around him. When that money is due, it won't feel like such a huge sum.

Shohei Ohtani's Contract Will Defer $68MM Per Year

The Dodgers and Shohei Ohtani agreed to massive a ten-year, $700MM deal over the weekend, but it was reported that …

www.mlbtraderumors.com

 

[jncuse]

Ohtani is deferring $68 million per year.
So, his Dodger salary is $2 million per year for the next ten years. Dodgers can now probably go get Yoshinobu Yamamoto, too.

Insane contract. And probably quite smart. He'll live on the 2 mil plus the 50 million in endorsements per year. Then collect $68 mil per year for ten years when he's 40... And the Dodgers can keep buying more players to put around him. When that money is due, it won't feel like such a huge sum.

Shohei Ohtani's Contract Will Defer $68MM Per Year

The Dodgers and Shohei Ohtani agreed to massive a ten-year, $700MM deal over the weekend, but it was reported that …

www.mlbtraderumors.com

Stunning.

So the contract is really nowhere worth $700 million when its present valued. Probably closer to $400M which is largely inline with Aaron Judge. From a Present Value perspective its no longer as ridiculous as it seemed.

Great deal for Ohtani and the Dodgers (for now anyway).
Ohtani wants to win - taking the low hit will help the Dodgers spend around him.
When Ohtani is done though, he is leaving a giant turd on the payroll - I guess he won't have to deal with it.

 

[STEVEHOLT]

https://x.com/jfrankensteiner/status/1734402865915896169?s=46&t=fP6WXs2eTtj2ZLMeu2bJfg

 

[jncuse]

So I was incorrect in my assessment above.
The salary hit on Ohtani's contract for CBT (luxury tax) purposes is around $46M, and not $2M. They do a fair value calculation.

In the end I don't think this is significantly egregious cap circumvention by the Dodgers. Given the deferred structure of the contract the fair value at signing to me isn't far off from $460M that it has been assigned.

I do assume that Shohei Ohtani plans to live outside of California when the contract is done, which will reduce his income tax hit. But that's not a baseball problem.

 

[jncuse]

Well Ohtani showed up in Toronto tonight and got booed largely in his first at bat (then proceeded to hit a home run in his first at bat, lol)

I was going to post something earlier in the day, as to whether Jays fans should boo Ohtani.
To me I was mixed on the idea - its just negotiations. I probably would not have booed.
1) It was unrealistic to expect to get him and he is allowed to sign with whomever he wants.
2) But the real issue was the shenanigans that his agents likely orchestrated to up the leverage on the Dodgers. Which caused that 8-12 hour surge of hope in Toronto. Is that enough to boo him? Or is that simply negotiating by his agents.
3) Does the betting scandal, give you some ammunition to boo if you are uncertain.