Contract Overview and Total Value
Shohei Ohtani signed a 10-year contract extension with the Los Angeles Angels in December 2023, with a total value of $700 million, making it the largest contract in MLB history at the time of signing Forbes. The deal runs through the 2034 season and includes a full no-trade clause, giving Ohtani control over any potential trade scenarios MLB.com.
The contract structure front-loads salary and includes significant deferrals to manage the Angels' luxury tax burden MLB.com. Ohtani's annual salary is $68 million for the first 10 years, with $680 million in total cash compensation before interest on deferred money Forbes.
Salary Deferrals and Luxury Tax Impact
The Angels deferred $68 million of Ohtani's salary in each of the first 10 years of the contract, with the deferred money plus 4% annual interest paid out from 2034 to 2043 MLB.com. This structure keeps Ohtani's cap hit below the luxury tax threshold during his playing years while spreading the actual cash outlay across two decades.
Under MLB's competitive balance tax system, the Angels' annual luxury tax hit for Ohtani is calculated based on the cash paid each year, not the total deferred obligation Forbes. The team's luxury tax status is expected to remain below the second tier during Ohtani's active years due to the deferral structure and the absence of a trade penalty
Contract Terms and Key Provisions
Ohtani's contract includes a full no-trade clause, meaning he must approve any trade, and the Angels cannot trade him without his consent MLB.com. The deal also guarantees $700 million regardless of performance, injury, or team decisions, with no opt-out clauses for either side
The contract specifies that Ohtani will receive $68 million in cash annually from 2024 through 2033, with the deferred portion plus interest paid in equal installments from 2034 to 2043 Forbes. If Ohtani retires early, the Angels are responsible for the remaining deferred payments, and the contract does not include a buyout provision