Odd Lots Lots More on Shohei Ohtani's $700 Million Contract
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Dec 15, 2023 Conor Sen, a Bloomberg Opinion columnist with a knack for finance and markets, joins the discussion on Shohei Ohtani's jaw-dropping $700 million contract. They dissect how this unprecedented deal affects team revenues and player evaluations within MLB. The conversation dives into the unique financial structure behind Ohtani's contract and its wider implications for the game. Alongside economic insights, they explore the sport's global future and the increasing significance of Asian audiences in Major League Baseball, adding depth to a captivating topic.
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Ohtani's Unusual Contract
- Shohei Ohtani's $700 million contract with the Dodgers is financially interesting due to its deferred payment structure.
- This is unusual in baseball, an industry not known for such large contracts, especially for lesser-known players.
Ohtani's Unique Skillset
- Shohei Ohtani is a unique baseball player, excelling at both hitting and pitching.
- He's considered potentially better than Babe Ruth due to his dominance in both areas.
Contract's Net Present Value
- Ohtani's contract has a strange structure: $2 million yearly for 10 years, then $68 million yearly for the next 10.
- The net present value varies depending on the applied discount rate (4.43% for luxury tax, 10% for payroll).