The contract of ‘superstar’ Shohei Ohtani, who joined the LA Dodgers, is expected to bring about strong repercussions.
It is poised to shake up even the tax laws of the U.S. state of California.
NBC Los Angeles, a local U.S. media outlet, reported on the 10th (Korean time)
that “Ohtani’s contract with the Dodgers is at the center of tax law changes requested by California’s chief financial officer to Congress.” 카지노사이트랭크
Ohtani entered the major league by joining the Los Angeles Angels ahead of the 2018 season.
He created the ‘two-handed pitching’ syndrome with his double-hitting ability that had not been seen except in his early days in the major leagues, and raised his stock price by winning the American League MVP in 2021 and this year.
Although he had a difficult time due to an elbow injury and the novel coronavirus infection (Corona 19) pandemic, he made the Major League a stage for himself starting in the 2021 season.
As a batter, he played in 158 games, 537 at-bats, 138 hits, a batting average of 0.257, 46 home runs, 100 RBIs, and an OPS of 0.964. As a pitcher, he started 23 games, went 130⅓ innings,
won 9, lost 2, and had an ERA of 3.18, performing like something you’d see in a baseball cartoon.
In the 2023 season, he recorded 10 wins and 10 home runs in two consecutive seasons and 10 wins and 40 home runs in a single season, a feat that even Babe Ruth could not achieve.
He showed himself as a top starting pitcher in the big league with 10 wins, 5 losses, and an average ERA of 3.14 in 23 games and 132 innings.
He also hit hard as a hitter with 151 hits in 497 at-bats in 135 games, a batting average of 0.304, 44 home runs, and 95 RBIs, and an OPS of 1.066.
And when Ohtani became a free agent after the end of the 2023 season, declined the qualifying offer and exercised his rights
all issues in Major League Baseball’s Stove League turned to Ohtani’s future. Ohtani’s price has soared through the roof as he boasts top-level skills as both a pitcher and a hitter and has star potential.
The winner with Ohtani was the LA Dodgers. The LA Dodgers captured Ohtani’s heart by boldly betting an astronomical sum of $700 million (approximately 902.3 billion won) on a 10-year contract.
Although Ohtani will not be able to take the mound for the time being due to a right elbow injury in the second half of last year and undergoing ligament repair surgery for the second time in his career
the Los Angeles Dodgers decided that Ohtani was a player worth paying an astronomical amount of money for.
The $700 million that Ohtani will receive comes from former teammate Mike Trout’s 12-year contract with the Los Angeles Angels worth $426.5 million (approximately KRW 563 billion), as well as NFL quarterback Patrick Mahomes (Kansas).
This amount exceeds the 10-year, $450 million (approximately KRW 594 billion) record of the City Chiefs, the highest salary in North American professional sports.
The history of professional sports around the world was also rewritten. It also significantly surpasses the $674 million (approximately KRW 889.7 billion) contract that soccer god Lionel Messi signed with FC Barcelona from 2017 to 2021.
However, the ‘dipper’ clause after the contract was signed caused controversy. Otani decided to receive a whopping $680 million (approximately KRW 898.2 billion) of the $700 million after 2033, when the contract ends.
It is said that Ohtani first proposed this ‘dipper’ clause to the LA Dodgers, saying that he would receive an amount equivalent to 97% of the contract annual salary 10 years later.
Some see Ohtani’s first proposal of the ‘dipper’ clause to prevent the Dodgers from exceeding the luxury tax standard as ‘consideration’
but since the Dodgers are a team that already has financial power, lowering the team’s total annual salary in this way could disrupt the market. There were many opinions that it was an expedient and a trick.
In fact, even after signing Ohtani, the Dodgers continued their ‘extensive strides’ by signing large contracts with several players without financial difficulties.
The Tampa Bay Rays acquired Tyler Glasnow and Manual Margo through a trade, and immediately signed a five-year contract extension worth $136.5 billion (approximately 180.3 billion won) with Glasnow.
And another Japanese pitcher, Yoshinobu Yamamoto, was signed for 12 years and $325 million (about 429.2 billion won).
Next, a one-year contract worth $23.5 million (approximately KRW 31 billion) was signed with outfielder Teoscar Hernández. This contract is also unusual in that $8.5 million (approximately KRW 11.2 billion) will be paid in installments from 2030 to 2039.
The state of California has begun to move toward a contract that can hardly be described as ‘unique.’ ‘NBC Los Angeles’ reported
California State Auditor Malia Cohen wants to limit Ohtani’s payment of deferred amounts.”
The Associated Press reported, “If Ohtani does not reside in California at the time of receiving the deposit
he will avoid the 13.3% income tax currently levied by the state and the 1.1% tax related to life insurance.
In the current system, Ohtani has a tax of 9,800. “You can save 10,000 dollars (about 129.3 billion won),” he explained.
Cohen pointed out, “The contract is structured so that Ohtani will receive $2 million per year and can defer the balance for about 10 years, and if he returns to Japan at that time, he can avoid paying California state income tax on the deferred amount.”
“The current tax system allows unlimited deferrals for those lucky enough to be in the highest tax brackets, creating significant imbalances in the tax structure,” he said.
Without a reasonable deferral cap for the wealthiest individuals, “This exacerbates income inequality and impedes equitable distribution of taxes.
I want to urge Congress to take immediate and decisive action to correct these imbalances,” he added.