I won't say whether smart or stupid necessarily, but he's definitely losing money. A ten year $300 million deal would be probably similar in the expected total gains at the end of the 20 years.
I am probably wrong about this but I seem to recall a team friendly deal with Biggio (it may have been someone else) in his final contract wherein he took a much reduced salary in return for payments after retirement for a few appearances a year as an advisor or some such. It was really just a deferred salary deal to give the team some room to pay for a team to put around him while he played out his final years. I thought it was a great idea at the time but the league or the union made rules against it soon thereafter. Ohtani and the Dodgers just did away with the pretense of continued employment and called it what it is.
Except he chose to sign with and STAY with a losing franchise. And get real, he wasn’t leaving LA. And THAT, is not about winning. That’s business for him. He was never going to leave the Angels sooner that he anted to because of that LA/Japan market. So spare me that BS excuse about winning.
At current risk-free rates, the value of his deal is $460MM - that's how that luxury tax numbers comes out. Sure, he could invest the money more aggressively and take on risk, but if he wants to do that, he can also do that by borrowing against his future guaranteed income stream so it all comes out the same.
So now it's a bad thing to honor your contract? The rationales people are using to find a reason to despise him are pretty funny. He's all about the money. He's not enough about the money (due to deferrals) He doesn't care about winning. He made it unfair for the Dodgers so they could sign other guys and win more. He didn't demand a trade.
Yes any owner can offer this but how many players would take a large deferred contract to play for teams like the pirates or brewers?
How many players take a large non-deferred contract to play for the Pirates or Brewers? Deferred contracts have no real economic impact except on short-term cash flow for both player and franchise. Ohtani didn't really do it to help the team win - he did it so he can say he signed a $700MM contract. If he had signed a non-deferred contract of $460MM, it would have been the same outcome for everyone but it wouldn't have been quite so "wow" despite still being the largest contract in MLB.
Not unless he received other offers well in excess of $460M with no deferrals. Seems clear you’re not really grasping how this works. Here’s some very light reading to help: https://www.mlbtraderumors.com/2023...ract-structure-is-not-a-luxury-tax-dodge.html
Not at all true. He secured the best financial situation. People’s perception of the deferred money is disconnected from reality.
No one can definitively say if he’s losing money unless they know for certain what other offers he has. Then it becomes a subjective argument around the discount rate used to calculate the net present value of the contract. All of that ignores the impact of where he plays on his endorsements. I don’t believe for a second he left much of any money on the table.
And both teams are in LA. It’s the location, not just about winning. He’s a liar if that’s what he says.
He isn't losing money if he isn't living in Cali, or a state with a big state income tax, when he starts collecting on that 68 million
