The Table Setter, Dec 12, 2023: Dodger Deferrals and Royal Paydays

[Cody Schoenmann]

In a shocking turn of events, the baseball world discovered that Shohei Ohtani will make only $2 million per season during his 10-year contract with the Los Angeles Dodgers. Read about that and more in today's Twins Daily Table Setter.

Image courtesy of Yukihito Taguchi - USA TODAY Sports

Obviously, the biggest news of the day was that Shohei Ohtani will defer $68 million of his $70-million annual salary in each year of his 10-year, $700-million contract with the Los Angeles Dodgers. That could allow the team to keep spending, and potentially sign or trade for a frontline starting pitcher like Lucas Giolito, Tyler Glasnow, Dylan Cease, or, most notably, Yoshinobu Yamamoto.

Ohtani's deferrals make the word "unprecedented" seem insufficient. Reportedly, the generational talent proposed the unique structure of the deal, as his off-the-field earnings are significant enough for him to maintain a lavish lifestyle. There are many intricacies within Ohtani's deal, and I highly recommend reading Fabian Ardaya's piece at The Athletic to understand how the deal came to be and its effects on the Dodgers and Major League Baseball.

Other important, non-Ohtani contract tidbits and information around the league were shared on Monday, and the kind people at Twins Daily are here to help keep you engaged and informed fans of all things Major League Baseball.

Do Not Go Gentle Into That Good Night
Upon the news of Ohtani's official departure from the organization, the ever-persistent and often misguided Los Angeles Angels are swimming in deep waters. On Monday night, Ken Rosenthal of The Athletic reported that the Angels are in the trade market for Corbin Burnes, Glasnow, and Bieber.

If the organization is unable to acquire one of the three pitchers listed above, it is believed they will shift to the second-tier free-agent starters market, with Marcus Stroman being brought up as a potential target. 

Though the Angels are probably better off undergoing an organizational reset in this post-Ohtani world, they are steadfast in attempting to compete in 2024. Will that come back to haunt them? Only time will tell, but as the popular maxim states, past performance is the best indicator of future performance.

Yamamoto Meets With Big Market Teams
After New York Mets owner Steve Cohen flew to Japan to meet with Yamamoto and his family in his home country, the former NPB star met with the San Francisco Giants on Sunday, the New York Yankees on Monday and is expected to meet with the Dodgers this upcoming Friday, in what has become a melee for baseball's top remaining free agent.

As reported last week, Yamamoto's total contract is expected to surpass $300 million. Will the Dodgers spend $1 billion in total value in one offseason? Will one of the New York teams give Yamamoto an offer he can't refuse, out of desperation? Will franchises who need to make a splash, like the Giants or Toronto Blue Jays, hand Yamamoto and his representatives a blank check? The thrilling conclusion to Yamamoto's decision must come by January 4, 2024, the final day of the prized free agent's 45-day posting window. 

St. Louis Cardinals Discussing Extension With Former NL MVP 
On Monday, Derrick Goold of the St. Louis Post-Dispatch reported that the Cardinals are planning on approaching first baseman Paul Goldschmidt to discuss a contract extension. Goldschmidt, 36, is slated to make $26.5 million in the final year of an extension he signed with the Cardinals in 2019.

Considering Goldschmidt's age and the Cardinals' struggles last season, the news of this development is surprising, from an outside perspective. Yet, considering the Cardinals' intentions to compete in 2024 and the former MVP expressing a strong desire to stay in "The Lou" in the past, the two sides coming to an agreement later this offseason feels inevitable. 

Kansas City Royals Remain Active in Pitching Market
One of the more surprising developments during the first wave of free agency has been how aggressive the Royals have been in the pitching market. On Sunday, the team agreed on a one-year, $5-million contract with left-handed relief pitcher Will Smith. Following the unexpected signing of Smith on Monday, Mark Feinsand of MLB.com reported that the Royals have had discussions with starting pitchers Michael Wacha and Jack Flaherty. The Royals have also been linked to free-agent starters Stroman, Giolito, and Seth Lugo. 

Earlier this offseason, Royals General Manager J.J. Piccolo stated that he hopes to bolster the team's starting rotation, and news of their interest in the five starters noted earlier further pushes that narrative. What is the driving force behind the Royals' desire to acquire this level of help? While it is unlikely the Royals will be serious contenders to win the American League Central or earn a Wild Card spot, it would make sense for the organization to want to improve what was the fourth-worst rotation in baseball in 2023, according to Wins Above Replacement at FanGraphs. 

Miscellaneous Twins Notes

• Pitcher Louie Varland celebrated his 26th birthday on Monday. 
• Joe Mauer is currently on track to become a first-ballot Hall of Fame entry, with 76.8% of the vote. (No, we are not afraid to keep a daily count. Yes, dear BBWAA voter reading this, we are watching you.)
• Read Theodore Tollefson's incredible piece on Wichita Wind Surge's head groundskeeper, Ben Hartman.
• Fun Fact: Willi Castro (projected $3.8 million salary) will make more money playing baseball in 2024 than Ohtani.

Happy Tuesday, everyone. Let's talk baseball! Join the conversation and comment below. 

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[DJL44]

Ohtani becomes the highest paid player but it's more like $46M a season than $70M. 

Big market teams like the Royals and the Reds scooping up all the relievers. The Twins will just have to wait until the rich teams have their fill.

[Scott51104]

It turns out that the Twins could have afforded the first ten years of Ohtani.

[roger]

Time for the Commissioner to get involved for "the good of the game."

Also clearly time for a salary cap with rules prohibiting contracts like this.  

[Obie]

A few comments regarding the present value of future money. The basic point is that a million dollars ten years from now is worth a lot less than a million dollars today, in fact, probably less than half, and the value diminishes with each additional year. This is why the cash payout for a lottery winner is a lot less than the amount paid over time. So, is it really a $700 million deal? No, it's worth far less than that. Another reason why this is a sweetheart deal for the Dodgers.

[Matthew Trueblood]

3 minutes ago, Obie said:

A few comments regarding the present value of future money. The basic point is that a million dollars ten years from now is worth a lot less than a million dollars today, in fact, probably less than half, and the value diminishes with each additional year. This is why the cash payout for a lottery winner is a lot less than the amount paid over time. So, is it really a $700 million deal? No, it's worth far less than that. Another reason why this is a sweetheart deal for the Dodgers.

It is, of course, worth far less than $700 million. Specifically, it's net present value is around $460 million, as calculated by the league and the PA. But that is miles from being a sweetheart deal for the Dodgers.

[Jocko87]

18 minutes ago, roger said:

Time for the Commissioner to get involved for "the good of the game."

Also clearly time for a salary cap with rules prohibiting contracts like this.  

The commish can't do anything. Apparently it's all spelled out in the new CBA and perfectly kosher. It's another one of those things that's not too uncommon but when do you need at scale everyone goes holy smokes. The owe Betts a bunch of deferred money in that time period too. Hope they have a good CFO and a nice savings account.

[Fatbat]

24 minutes ago, roger said:

Time for the Commissioner to get involved for "the good of the game."

Also clearly time for a salary cap with rules prohibiting contracts like this.  

Considering the cost of future money, why haven’t the Pohlads built contracts like this? Buy the best players and pay them later, after they have won the WS when the fans show up for year two and buy all the merch. 

[mikelink45]

Silly money being spent - the market goes up because the big money teams compete with each other and throw figures around that 80% of the other teams cannot dream of matching.  Is Ohtani really worth that amount?  No.  But that is not the point.  He is the bauble that one big team can flash for the other team.  

I remember the first $100,000 salary.  But now that is pay for one game - win or lose.  I am put off by it and I love it when a team regrets what they spent, but can't do anything about it.  Forget Ohtani - the Angels spent big on Trout who has 15 post season ABs and Pujols who was constantly berated (until he came back to the Cards) and Rendon.  How has that worked out? 

The Yankees take on Stanton and Rodon and Donaldson - then come close to 500 for the first since the dinosaurs.  

The big name and big contract does not mean success.  I enjoy Carlos Correa, but he was not the reason we won the division any more than Buxton. 

Baseball is not a game where one star makes the difference, it truly is a team game.  Trout can only bat 3 - 5 times a game, Cole can only pitch every 5th day.  What I like about the Twins is there total roster and the players like Castro and Solano and Taylor making the difference along with rookies who shine when given a chance. 

[Woof Bronzer]

39 minutes ago, roger said:

Time for the Commissioner to get involved for "the good of the game."

Also clearly time for a salary cap with rules prohibiting contracts like this.  

This is actually an innovative contract that teams like the Twins should be creative enough to consider.  The Dodgers are paying around $450m on a $700m contract, basically a 36% discount.  I wish our ownership group was willing to do "outside the box" things like this.  But that would require them to show an interest in winning.  Instead all we ever get is cuts and excuses.  

And good luck getting the players association to sign off on a salary cap prohibiting their players from making absurd money.  

Frankly it's a bit odd to complain about an owner coming up with an innovative contract that works for everyone and still allows them to improve their team. 

[PDX Twin]

I assume that the Dodgers are betting that the soft salary cap will be gone by the time they end up paying the big money so they will escape any penalty other than wasting the money of someone who can easily afford to feed his vanity with such contracts. Or maybe that inflation will explode and the other $680 million will be pocket change.

I chuckle every time Dodger owner Todd Boehly's Chelsea side embarrass themselves (now in 12th place, closer to relegation than to Champions League).

[Dman]

Maybe I don't understand how deferred money works but from what they mentioned on MLB trade rumors. Even though Ohtnai only gets 2M per year the money applied to the cap for those 10 years is 46M per year.  So the team will likely still have to deal with cap penalties over the next ten years unless they go with younger players outside of Betts, Ohtani and Freeman etc.  So it isn't all roses IMO.

Then from 34 to 43 they actually have to pay the 68M per year to a player likely no longer playing for them.  That is gonna hurt.  With the 46M per year counting toward the cap it seems like they get dinged twice in this deal if you ask me.  Still adding the best player in baseball to an already stacked team should help the Dodgers get over the world series hump at least if those players stay healthy.

[ValleySpringsFan]

So is my assumption correct (and maybe obvious to everyone else) that Ohtani's contract with the Dodgers will allow them to pursue Yamamoto, both financially and with a little peer-to-peer lobbying from their new star?

Also, love the Willi Castro factoid. He's entitled to a little clubhouse strutting this spring.

[tony&rodney]

I can't think of a single reason to object to a player signing a contract to play (work) for a team of their choice in the location of their choice. It's unfortunate that everyone cannot choose their employment location and company, but that's life.

We should all be happy for Ohtani. By all accounts (at least anything I have read) Shohei is a terrific human being who actually lives rather simply given his financial worth. In interviews, among teammates, and with his peers Ohtani is almost legendary in his kindness and agreeable nature. 

Was anyone surprised even a smidgeon that he is still in Los Angeles?

[tony&rodney]

All attention now turns towards Yamamoto. Where will he sign? If you were a baseball player moving from Japan to the United States, where would you want to work? The move is already going to be a major cultural shift for the 25 year old. (Those of you who have spent time in Japan will know this.)

I have no idea about the young man, but I hope he has a strong advisor and makes a choice that works for him off of the baseball field. He should, at the very least, have reached out to a number of other Japanese players who made the move to play in MLB.

[USAFChief]

This is ridiculous.

MLB needs to bust the union, and institute a hard salary cap.

It did wonders for the NFL. It would do wonders for MLB as well.

And MLB better do it quickly, while it still properly claims to be a "major" sport.

[Reptevia]

By the time the Dodgers have to pay out the actual money owed to Ohtani, their payroll will probably be close to a billion dollars. I would say this is all ridiculous, but people said the same thing with the advent of free agency. We both may be right in a sense, but the results don’t 100% support the “Buy a WS” rhetoric. 

[Rod Carews Birthday]

I am thrilled for Ohtani!  Good for him.  He was a very hot commodity and he parlayed that into a ridiculous amount of money.  We would all do that and should all be that lucky.  

HOWEVER, this is a terrible precedent.  Yes, I know that it’s just a more extreme example of things that big market teams have been doing all along, but when done at this scale, it is quite offensive.  If I have this right, the Dodgers will pay him a relative pittance for the next ten years to free up cash and avoid additional luxury tax implications, and then later (when the tax is gone?) pay him the rest of his contract — as if the Dodgers were in some dire straights that they needed the financial flexibility.  Yes, I know that the CBA says it’s legal and that any team, including the Twins could do it.  Just because you can use the letter of the law to skirt the spirit of the law doesn’t make it OK (unless apparently you’re a politician, but I digress).  Again, the Dodgers (the rich team), who pretty much print money, just got richer. 

I’m reasonably sure that no one can do anything about it, as at very least the Dodgers would tie it up in court until the contract is over.  It is things like this that make me think that MLB has absolutely no interest in the long term health of their sport.  

Hopefully, this doesn’t all work out happily for the Dodgers.  There are injuries and ineffectiveness, both from Ohtani and others on the team that could de-rail the World Series express, but I certainly like (dislike) their odds of success. 

[DJL44]

1 hour ago, mikelink45 said:

Is Ohtani really worth that amount?  No.  But that is not the point.  He is the bauble that one big team can flash for the other team.  

Ohtani's probably worth more than that. There was an article that the Angels are losing $25M in yearly advertising money from Japanese companies because Ohtani is gone now. He's clearly worth $40M in on-field performance. The Dodgers are getting a bargain.

[Nine of twelve]

1 hour ago, Woof Bronzer said:

 Frankly it's a bit odd to complain about an owner coming up with an innovative contract 

Innovative? Yeah, I suppose it's innovative to game the system in order to circumvent the intent of the rules, especially when you are one of the few teams that can afford to do it.

[MMMordabito]

21 minutes ago, Rod Carews Birthday said:

Hopefully, this doesn’t all work out happily for the Dodgers.  

+1

[tony&rodney]

17 minutes ago, Nine of twelve said:

Innovative? Yeah, I suppose it's innovative to game the system in order to circumvent the intent of the rules, especially when you are one of the few teams that can afford to do it.

You do remember that deferrals have been used dozens of times going back a couple of decades, right?

[Rod Carews Birthday]

7 minutes ago, tony&rodney said:

You do remember that deferrals have been used dozens of times going back a couple of decades, right?

Never to this degree and the one that is even moderately close, we all make fun of when it is Bobby Bonilla Day. 

[Blyleven2011]

I'm not sure what team I dislike more ...

The dodgers or the Yankees  ...

It definitely used to be the Yankees , now I'm not so sure ...

Players are entitled to all the money they can negotiate  , the only team that really clearly bought and were successful in winning a world series  was the marlins  and then dismantled the following year ...

Your never guaranteed  to win a world series when you spend big money ...

[jmlease1]

I think what's interesting about Ohtani's deal is that there's no interest. Quite a few major player deals have deferrals built into them (usually for tax purposes on the player side), but usually there's at least some form of interest attached, and there's apparently none of that here. It's a very clever deal that works fine for a player of Ohtani's stature who has massive off-field income streams, but would be much less viable for other players. But the level of deferred money is a little concerning for cap circumvention and what it does to maximize the disproportionate financial power of certain markets.

there's no question this is going to come up in the next CBA, and it'll be a complicated one for baseball on all sides. The players union likes this because incentivizing big markets to spend and circumvent the cap is important to raising the overall levels of player salaries. but at the same time, there's only so much you can do to hammer the mid-to-small markets and make them unimpactful in free agency, especially with the collapse of regional cable networks. That hurts more players overall, even if the total economic impact might not be as much. basically, the union is going to be looking at a fight between the superstars and the middle-class player again for what they need and value.

MLB wants the deferrals reduced or eliminated to protect owners from themselves, but also because they want teams to be able to be sold with a minimum of impact, which is going to happen with more consistency with fewer family/generational ownerships in the offing. they really don't want a team loading up to win with multiple deferred comp deals, spiking the value of the franchise for a sale, and handing the next owner 10-20 years of contract debt with no value and having to sort that mess out too. Plus, they have real concerns about the competitive value tax thresholds: the less impactful they are, the harder it will be to keep anything moving with a financial floor. revenue-sharing is a real issue in baseball again, and the collapse of the regional sports networks and the solid cable revenues they generated is a significant problem for small to mid-market teams. For as much as the playoff format makes it harder for a big spender to just buy their way to a title, there's also a few too many no-hope teams.

messy, very messy.

[chpettit19]

1 hour ago, Rod Carews Birthday said:

I am thrilled for Ohtani!  Good for him.  He was a very hot commodity and he parlayed that into a ridiculous amount of money.  We would all do that and should all be that lucky.  

HOWEVER, this is a terrible precedent.  Yes, I know that it’s just a more extreme example of things that big market teams have been doing all along, but when done at this scale, it is quite offensive.  If I have this right, the Dodgers will pay him a relative pittance for the next ten years to free up cash and avoid additional luxury tax implications, and then later (when the tax is gone?) pay him the rest of his contract — as if the Dodgers were in some dire straights that they needed the financial flexibility.  Yes, I know that the CBA says it’s legal and that any team, including the Twins could do it.  Just because you can use the letter of the law to skirt the spirit of the law doesn’t make it OK (unless apparently you’re a politician, but I digress).  Again, the Dodgers (the rich team), who pretty much print money, just got richer. 

I’m reasonably sure that no one can do anything about it, as at very least the Dodgers would tie it up in court until the contract is over.  It is things like this that make me think that MLB has absolutely no interest in the long term health of their sport.  

Hopefully, this doesn’t all work out happily for the Dodgers.  There are injuries and ineffectiveness, both from Ohtani and others on the team that could de-rail the World Series express, but I certainly like (dislike) their odds of success. 

By all reports I've seen it was Ohtani's idea to do it this way, not the Dodgers. Ohtani wants to win so he wanted them to be able to have the extra cash to be able to put as many good pieces around him as possible. He's doing what many fans have begged players to do and sacrificed some cash in the name of winning. Why are we mad at the Dodgers for listening to what Ohtani and his representatives proposed? Why don't other teams just try to do the same thing? NFL teams take advantage of their CBA rules about contracts all the time. Why are we mad at teams for trying their hardest to win within the rules, especially when the player is the one suggesting the strategy? I wish the Twins would actually put in this kind of creative effort towards winning instead of just throwing up their hands and saying "we need to cut payroll."

[chpettit19]

1 hour ago, Woof Bronzer said:

This is actually an innovative contract that teams like the Twins should be creative enough to consider.  The Dodgers are paying around $450m on a $700m contract, basically a 36% discount.  I wish our ownership group was willing to do "outside the box" things like this.  But that would require them to show an interest in winning.  Instead all we ever get is cuts and excuses.  

And good luck getting the players association to sign off on a salary cap prohibiting their players from making absurd money.  

Frankly it's a bit odd to complain about an owner coming up with an innovative contract that works for everyone and still allows them to improve their team. 

 

42 minutes ago, Nine of twelve said:

Innovative? Yeah, I suppose it's innovative to game the system in order to circumvent the intent of the rules, especially when you are one of the few teams that can afford to do it.

The best part is that it wasn't even the Dodgers innovative idea, it was Ohtani's (and probably his reps as they likely know the rules better than him). Ohtani asked for this because he cares about winning. He picked the Dodgers because he cares about winning. He sacrificed hundreds of millions in actual cash by deferring nearly his entire deal because he cares about winning. Why are we mad that a player and team are actually trying to win?

[chpettit19]

7 minutes ago, Blyleven2011 said:

I'm not sure what team I dislike more ...

The dodgers or the Yankees  ...

It definitely used to be the Yankees , now I'm not so sure ...

Players are entitled to all the money they can negotiate  , the only team that really clearly bought and were successful in winning a world series  was the marlins  and then dismantled the following year ...

Your never guaranteed  to win a world series when you spend big money ...

I'd argue the Rangers just clearly bought a World Series.

[Rod Carews Birthday]

9 minutes ago, chpettit19 said:

Why are we mad at the Dodgers for listening to what Ohtani and his representatives proposed? Why don't other teams just try to do the same thing? . . . .  I wish the Twins would actually put in this kind of creative effort towards winning instead of just throwing up their hands and saying "we need to cut payroll."

I understand that the idea came from Ohtani and that it's within the rules.  However, that set of rules is severely skewed toward teams that have a ready (nearly) unending stream of cash coming in.  For the Dodgers to commit to that kind of money in the future at worst may make it a little uncomfortable for them, but I doubt it.  In essence, they're getting their player, paying him a pittance now in order to artificially deflate their payroll, add more, and avoid some luxury tax hit, while deferring costs to later, when there may be no luxury tax to pay.  For a mid or lower market team to do this requires a scary leap of faith that the money will be there in the future, which as we've seen this year, it may not.  It's why Bill Gates buying a new Mercedes (or the company) isn't a big deal, but if I buy one, I am concerned about the payments and that may make me buy a car that sells for less money.  In my case, it doesn't hurt me, because I'm not competing with Bill Gates in anything, but in the Dodgers/Twins case, it interferes with fair competition and makes an even more uneven playing field.

[Doctor Gast]

Cody I enjoyed your miscellaneous news most of all. 1)  Castro will be making almost 2x as much $ this season than Ohtani 2) Mauer is on track to enter the HOF on 1st ballot.  both would be very shocking to most