Welcome to 2024! Ready or not, it is here.
Hopefully, this past holiday week’s festivities went well, and Santa treated you kindly. Perhaps not if you are an MLB baseball fan of teams other than the Dodgers. Possibly, it can be put thusly: it’s the week after Christmas, and all through the town, if you don’t like the Dodgers, you’re wearing a frown!
OK, it won’t win any poetic awards, but it speaks volumes about the ‘hate level’ now being directed from fans of the other 29 MLB teams to the Tinseltown Nine wearing Dodger blue.
If you haven’t been paying attention or just awakened from a Rip Van Winkle-type siesta, during the last few weeks of December, the Los Angeles Dodgers shelled out $1.25 BILLION U.S. dollars in signing two Japanese free-agent pitchers, Shohei Ohtani (10 years, $700 million) and Yoshinobu Yamamoto (12 years, $325 million). Ohtani’s contract was the largest in the American baseball history, while Yamamoto, who pitched the past five seasons in Japan, received the largest contract to a player who had never played a game in MLB.
Combined, the other 29 MLB teams have spent less than $900 million to date. That billion-dollar payout converts to 142,355,000,000 Japanese yen. During 2022 (the last time complete year figures were available) the United States imported $154.45 billion worth of goods from Japan. The top imported items included vehicles, machinery, boilers, electrical and electrical equipment.
Ohtani and Yamamoto stand as the most expensive single-item imports the sports world has experienced. The numbers are mind-boggling when you consider Ohtani will be paid $432,099 PER GAME and $3,000 PER MINUTE wearing Dodger blue.
In the Old West, wanted posters told the story about the villains of the day. Billy the Kid and Josey Wales had $5,000 bounties on their heads, Jesse James $25,000, and Abraham Lincoln’s assassin, John Wilkes Booth, was targeted at $100,000.
Following the 2017 season, the Houston Astros sign-stealing scandal catapulted the team to the top of MLB’s most-hated status. The Yankees and the Red Sox are annually looked upon as teams many fans root against. But now, all three of those teams can thank the Lo$ Angele$ Dodger$, whom most of the baseball world will be cheering to fail.
The craziness of the Ohtani saga even includes the number 17 he will wear on his back.
While fans across the country were campaigning for Ohtani to sign with their team, Ashley Kelly, the wife of Dodger pitcher Joe Kelly, took it one step further by starting her “#Ohtake17” campaign, hoping it would catch Ohtani’s attention. The slogan refers to the number worn by Kelly with the team.
Once he signed his new Dodger contract, Ohtani showed his gratitude for #17 by presenting Ashley Kelly with a brand-new Porsche!
“I wasn’t going to give up the number to just anybody,” Joe Kelly told the media. “If Shohei keeps performing, he’ll be a future Hall of Famer, and I’ll be able to have my number retired. That’s the closest I’ll get to the Hall of Fame.”
Reports indicate Ohtani is not only a great baseball player, but he could be an MVP of the personal finance world.
Of the $700-million contract, Shohei will be paid $2 million a year for the next ten seasons as the result of having $680 million of the huge deal deferred. It will be the decade after when the Dodgers will really start to pay Ohtani — $68 million per year from 2034-43.
Professional athletes’ taxes are much more complicated than the average taxpayer. In the United States, workers must pay taxes based both on where they live and where they work. For example, when, say, the New York Mets play the Dodgers in Los Angeles, Mets players can be taxed for the days they play in California. The taxing formula is known as the “jock tax.” It doesn’t apply to states that have no income tax, like Texas, Tennessee, and Florida, where many professional athletes move.
Ohtani will turn 40 in 2034 when the $68 million in his deferred contract payments will begin, an age when most baseball players have retired. By then, Ohtani could stop playing baseball and choose not to live in California, potentially avoiding paying the bulk of his salary to California’s 13.3 state income tax and 1.1% payroll tax.
For their part, the Dodgers can invest $68 million over the next decade while not paying interest to Ohtani when the 2034 payments begin.
The known details of Ohtani’s contract position him nicely within the confines of a federal law that specifically bans states from taxing the retirement income of former residents.
While the Dodger’s recent financial maneuvering has drawn the ire of many in baseball circles and wanted posters have gone up seeking their demise, the apparent ability to stay one step ahead of the tax man must have opponents asking, “Why didn’t we think of that?’
