Pop Culture and Media

Shohei Ohtani just signed a $700 million contract—here's why he's only making $2 million next season

Share
Shohei Ohtani will reportedly receive the vast majority of his record-shattering $700 million contract after he's done playing.
Masterpress | Getty Images Sport | Getty Images

Shohei Ohtani shocked the baseball world twice this week.

The first shock came when he shattered records by signing a 10-year, $700 million contract with the Los Angeles Dodgers. The second was when reports emerged that the 29-year-old two-time MVP would only be taking home a fraction of that amount over the life of the deal, deferring the remaining $680 million until after he has hung up his spikes.

A deferral of that magnitude is unheard of. Instead of receiving $70 million per year for the next 10 seasons, All-Star hitter and pitcher will reportedly only collect $2 million annually over that span, according to The Athletic.

Starting in 2034 — when he will be 39 years old — and going until 2043, Ohtani will receive $68 million per year.

That means that the Japanese slugger's earnings over the next 20 years will look like this:

  • 2024: $2 million
  • 2025: $2 million
  • 2026: $2 million
  • 2027: $2 million
  • 2028: $2 million
  • 2029: $2 million
  • 2030: $2 million
  • 2031: $2 million
  • 2032: $2 million
  • 2033: $2 million
  • 2034: $68 million
  • 2035: $68 million
  • 2036: $68 million
  • 2037: $68 million
  • 2038: $68 million
  • 2039: $68 million
  • 2040: $68 million
  • 2041: $68 million
  • 2042: $68 million
  • 2043: $68 million

The deal, the structure of which reportedly came from Ohtani himself, will give the Dodgers more financial flexibility to continue building a competitive team around him during his prime playing years.

But that doesn't mean Ohtani will only be living off of $2 million per year for the next decade. The phenom is one of the highest-paid athletes in sports off of endorsements alone, raking in a reported $50 million annually.

His sponsors include Japanese watchmaker Seiko as well as Fanatics and Topps. Earlier this year, he signed a long-term endorsement deal with New Balance.

That said, by the time all is said and done, Ohtani will be baseball's all-time leader in on-field earnings. He earned just over $42 million during his six seasons with the Angels.

DON'T MISS: Want to be smarter and more successful with your money, work & life? Sign up for our new newsletter!

Get CNBC's free Warren Buffett Guide to Investing, which distills the billionaire's No. 1 best piece of advice for regular investors, do's and don'ts, and three key investing principles into a clear and simple guidebook.