At long last, Shohei Ohtani has joined the Los Angeles Dodgers, fulfilling the team's longstanding desire to have him in Dodger Blue. President of baseball operations Andrew Friedman's persistence paid off as Ohtani agreed to a 10-year contract, which includes a unique team-friendly sacrifice.

Ohtani's arrival has already made an impact, as he has been actively recruiting other players to join the Dodgers since his announcement. Furthermore, his contract details reveal a significant gesture towards team success. While the initial figure of a 10-year, $700 million contract may seem imposing, the fine print demonstrates that it is among the most team-friendly contracts in sports history.

In an effort to provide the front office with more flexibility, Ohtani has agreed to defer all but $2 million of his annual salary, ultimately deferring 97 percent of his earnings. This decision aligns with his desire to create the strongest team possible. During his introductory press conference, Ohtani explained that by deferring a significant portion of his salary, the Dodgers can allocate more funds towards signing better players and building a stronger team.

By deferring the majority of his salary, Ohtani's annual contract value for luxury tax purposes is estimated to be around $48 million, significantly lower than the initial figure. This strategic move aims to avoid triggering high competitive balance tax penalties for the Dodgers, which would hinder their ability to build a competitive team around Ohtani.

While Ohtani will earn only $2 million in salary in 2024 and 2025, the Dodgers will need to demonstrate their ability to fund the deferred payment of $68 million in 2034 by July 1, 2026. The present value of this payment is approximately $46 million today, considering the effects of inflation. Funding mechanisms such as cash or readily marketable securities can be used to meet this obligation.

The unique structure of Ohtani's contract sets him apart from other players in sports. However, this arrangement is a testament to his commitment to the Dodgers and his ambition to win the World Series. Through this contract, Ohtani is enabling the front office to maximize their player payrolls for the next decade, even with the presence of the game's highest-paid player.

Ohtani's endorsement deals also play a significant role, potentially generating around $50 million annually, which could offset a considerable portion of his deferred salary. This further showcases his exceptional status as a player.

Despite not having played a game yet, Ohtani has already won over the Dodgers' fan base with his dedication and financial commitment. His decision to defer a substantial portion of his salary exemplifies his willingness to invest in the team's success. It is clear that Ohtani has his sights set on achieving greatness with the Dodgers, and fans can expect an exciting era ahead.

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