The Los Angeles Dodgers are getting a discount of sorts despite agreeing to a 10-year, $700 million contract with Shohei Ohtani in MLB free agency. Ohtani is deferring $680 million until the end of the deal, while the CBT hit on the contract will be around $46 million, Jeff Passan of ESPN reports.

“Shohei Ohtani's $700 million contract calls for him to be paid only $2 million a year for the next 10 seasons, with $680 million deferred until the end of the deal, sources confirm to ESPN. The CBT hit on the contract is going to be around $46 million, a huge discount for L.A,” Passan wrote on X (formerly Twitter).

In other words, Ohtani will receive $2 million per season over the course of the next 10 years. This will allow the Dodgers to continue spending heavily in free agency without dishing out $70 million per year. From 2034-2043, however, The Dodgers will have to pay Ohtani $68 million per season.

MLB insider Bob Nightengale of USA Today made an interesting point about Ohtani's decision to defer the money.

“Shohei Ohtani’s decision to earn just $2 million a year certainly is a great benefit to the Dodgers’ payroll, but also a stroke of genius for tax repercussions. If he’s not living in California once his deferred payments start, he will not be subjected to heavy California tax,” Nightengale wrote.

From a baseball perspective this is a tremendous move for the Dodgers. They can now go and confidently add in free agency without having to worry too much about the luxury tax.

Shohei Ohtani's contract with Dodgers

Photo: Shohei Ohtani in Dodgers jersey with money flying around him, another photo of Ohtani in action in Dodgers jersey, 2 SEPARATE thumbnails please

Ohtani is probably set for life. He may opt to continue playing past his 10 years with LA, or he could just retire. Either way, he's going to make a lot of money come 2034.

The Dodgers are hoping the signing of Ohtani leads to multiple World Series victories. They have only won a single Fall Classic since 1990, doing so during the shortened 2020 campaign. LA's playoff struggles have been well-documented in recent years.

Perhaps Shohei Ohtani can help the team find success in October. At the very least, he will finally get to play meaningful baseball in October.