Dodgers deferred more than 1.09 billion dollars in salaries: Ohtani is owed as much as 680 million
The Los Angeles Dodgers have entered financial territory unlike anything previously seen in Major League Baseball. Following a series of multiyear contracts with stars, according to publicly released data, the club has agreed to at least 1.0645 billion dollars in deferred payments for nine players, while the arrival of Kyle Tucker potentially increased the total amount to approximately 1.0945 billion dollars. These are nominal sums that will not be paid all at once, but in carefully scheduled installments from 2028 all the way through 2047. The largest individual portion belongs to Shohei Ohtani, to whom the Dodgers will pay 68 million dollars annually between 2034 and 2043, for a total of 680 million. That enormous schedule of future obligations demonstrates how willing the Los Angeles club is to use its financial strength and league rules to assemble a team now that is capable of continuously challenging for the title.
A figure exceeding one billion dollars sounds like a debt that will only one day come due, but the structure is more complex. The collective bargaining agreement between MLB and the Players Association allows clubs and players to negotiate deferred compensation without an upper limit. At the same time, the club must fund the present value of future obligations within the deadlines prescribed by the agreement, meaning the Dodgers cannot simply spend all that money and assume they will find it decades later. Deferrals nevertheless change the timing of actual cash flow and, in certain cases, also reduce the calculated annual value of a contract for competitive balance tax purposes. It is precisely this combination of present-day flexibility and long-term financing that has become one of the defining features of the Dodgers' strategy.
Ohtani's 680 million changes the scale of the entire story
In December 2023, Ohtani signed a ten-year contract worth 700 million dollars, at the time the largest guaranteed contract in the history of North American professional sports. According to MLB's explanation, the Japanese two-way star agreed to receive only two million dollars per year from the club during the term of the contract, or a total of 20 million from 2024 through 2033. The remaining 680 million will be paid after the playing portion of the contract ends, in ten equal annual installments from 2034 through 2043. Ohtani himself proposed such a structure to leave the Dodgers with greater short-term flexibility for building the team. His substantial off-field income additionally enabled him to accept a model under which almost his entire contracted salary arrives only after the period during which he is obligated to play for the club has ended.
Ohtani's contract also provides the clearest explanation of why nominal value and present economic value are not the same. When the contract was signed, MLB estimated its present value for competitive balance tax purposes at approximately 460 million dollars, or about 46 million dollars annually, rather than the full 70 million. The difference arises because a dollar paid ten or fifteen years from now is worth less than a dollar paid immediately. The Dodgers therefore do not avoid recording Ohtani's contract, but its tax impact is calculated according to the discounted value of the deferred installments. Without that contract, the club's total deferred obligations would be much closer to ordinary proportions, because Ohtani alone accounts for more than 62 percent of the possible total of 1.0945 billion dollars.
Ten players and a calendar extending through 2047
After the arrival of closer Edwin Díaz, the Associated Press calculated that the Dodgers had 1.0645 billion dollars in deferred obligations to nine players. The published schedule includes the biggest stars on the current team, but also players whose contracts will end long before the final installments are paid. Tucker's contract was subsequently added to the total, with MLB reporting that it provides for up to 30 million dollars in deferred salary. Because Tucker can opt out of the contract after the second and third seasons, the final amount will depend on whether he completes the entire four-year term. If all scheduled deferrals remain in effect, the club will have obligations to ten players.
- Shohei Ohtani: 680 million dollars, scheduled for payment from 2034 through 2043.
- Mookie Betts: a total of 120 million dollars, including 115 million in deferred salaries and five million from the final portion of the signing bonus, with payments from 2033 through 2044.
- Blake Snell: 66 million dollars, with payments from 2035 through 2046.
- Freddie Freeman: 57 million dollars, with payments from 2028 through 2040.
- Will Smith: 50 million dollars, with payments from 2034 through 2043.
- Teoscar Hernández: 32 million dollars, with payments from 2030 through 2039.
- Tommy Edman: 25 million dollars, with payments from 2037 through 2044.
- Tanner Scott: 21 million dollars, with payments from 2035 through 2046.
- Edwin Díaz: 13.5 million dollars, distributed in installments ending in 2047.
- Kyle Tucker: up to 30 million dollars in deferred salary, depending on the duration of the contract and its opt-out clauses.
The earliest of these major payments begin in 2028 with Freeman's contract, while the final ones end in 2047 with Díaz. According to the Associated Press calculation made before Tucker signed, the greatest annual burden was expected to come in 2038 and 2039, when payments of 102.3 million dollars in each year had already been scheduled. Tucker's structure could further increase the amounts during part of that period, although his contribution to the total is small compared with Ohtani's. In certain seasons, the Dodgers will therefore pay more than one hundred million dollars to players for performances delivered many years earlier. This will happen alongside the salaries of the active roster at that time, player-development costs and all the club's other obligations.
What MLB rules actually permit
Article XVI of the current collective bargaining agreement explicitly states that there is no limitation either on the amount of deferred compensation or on the share of total compensation that may be deferred. Ohtani's 680 million, although unprecedented in size, is therefore not an exception specially approved by the league, but a contract concluded within the existing rules. For contracts signed after September 30, 2002, the club must fully fund the present value of the deferred obligation no later than the second July 1 following the season in which that compensation was earned. For this purpose, the collective bargaining agreement provides for annual discounting at five percent, with the possibility of discussing a change in the rate if the reference interest rate exceeds a specified level. The funds must be designated for satisfying deferred contracts and maintained in a form that complies with the rules of the agreement.
This means that the widely reported total of 1.0945 billion dollars is not the same as the amount the Dodgers must currently hold in cash. The club funds the present, discounted value of the obligations, not the full nominal amount of future dollars. Because the largest installments will not be paid for another ten, fifteen or more years, the present value is substantially lower than the total shown on paper. In the meantime, the ownership group can invest the funds in accordance with the rules and attempt to generate returns that will cover the future payments. The strategy therefore requires capital and discipline, but it can provide a wealthy and financially sophisticated owner with an advantage in cash-flow management.
Deferrals do not erase the luxury tax
One of the most common misconceptions is that the Dodgers completely remove contracts from the current payroll calculation through deferrals. The rules of the competitive balance tax, known as the CBT or luxury tax, assign contracts an average annual value and include deferred amounts according to their present value. Ohtani's contract therefore counts for approximately 46 million dollars annually for CBT purposes, not the two million that the club is currently paying him directly. The deferral reduces the calculated value compared with the nominal 70 million per year, but it does not reduce it to a symbolic amount. The same principle applies to other contracts containing deferred money.
The basic CBT threshold for the 2026 season is 244 million dollars, according to MLB's official overview. Clubs above the threshold pay tax on the excess, while the rate increases when they exceed it in several consecutive seasons and when they enter additional surcharge tiers. There are also competitive consequences, including the possible movement of the highest draft selection for clubs that finish at least 40 million dollars above the basic threshold. The Dodgers therefore are not operating outside the system through deferrals and are not exempting themselves from penalties, but are using a valuation method available to all clubs. Their real difference from most competitors lies in the willingness of players to accept such structures and in the owners' ability to fund very large future obligations in advance.
Tucker added a new layer, but also uncertainty
Kyle Tucker signed a four-year contract worth 240 million dollars in January 2026, with a signing bonus of 64 million and opt-out opportunities after the second and third seasons. MLB announced that the contract includes 30 million dollars in deferred salary. That amount raises the possible total of the Dodgers' deferrals from 1.0645 to 1.0945 billion dollars, but it is not certain that all 30 million will be earned. If Tucker exercises an opt-out clause and returns to the free-agent market, part of the salary scheduled for later seasons will not become an obligation for the club. It is therefore more precise to speak of a maximum of 1.0945 billion dollars under the currently contracted schedules.
Tucker's contract nevertheless confirms that deferred compensation was not a one-time concession connected solely to Ohtani. In varying proportions, the Dodgers have used the same tool for starters Snell, closers Díaz and Scott, hitters Freeman, Betts and Hernández, as well as Smith and Edman. The club frequently combines large signing bonuses, high annual salaries and later installments, tailoring the structure to each player. This approach enabled it to continue acquiring elite free agents after winning consecutive titles instead of reducing investment. Tucker arrived as another elite hitter in an already powerful lineup, and the financial construction of his contract fits the front office's long-term pattern.
The competitive-balance debate will not disappear
The Dodgers are operating in accordance with rules that apply equally to all 30 clubs, but their use of those rules has intensified the debate over MLB's economic balance. Critics argue that wealthy clubs with large revenues and access to capital can more easily fund deferred contracts, pay high tax penalties and continue acquiring stars. Supporters of the current system respond that deferral is not a hidden subsidy, because the club must secure the present value of the obligation and the tax calculation still includes the discounted cost. It is also important that the player must voluntarily agree to wait for part of the earnings, which is not equally attractive to every free agent. Ohtani's combination of sporting status and off-field commercial income is difficult to replicate in an average contract.
The current collective bargaining agreement expires on December 1, 2026, and MLB and the Players Association have already begun negotiations on a new agreement. Competitive balance and differences in clubs' financial capabilities are among the principal subjects of those discussions, but as of August 3, 2026, it had not been officially confirmed that the future agreement would limit deferred compensation. Until the rules change, existing contracts remain an example of how far salaries can be spread over time. The Dodgers have demonstrated that deferred money is not a substitute for wealth, but an instrument that benefits most those who already possess enough capital to finance it.
The consequences of today's decisions will be felt long after the current stars have ended their careers. Ohtani will receive his final installment in 2043, Betts' payments will end in 2044, while the obligations to Snell, Scott and Díaz will extend even further. By then, the roster, management, television-rights market and probably several collective bargaining agreements will have changed. Nevertheless, the Dodgers will still be paying money for the period in which they attempted to build a dynasty. That is the true meaning of the figure exceeding one billion dollars: not a bill due today, but a long-term financial promise through which the club is purchasing a competitive advantage now.
Sources:
- Associated Press / NBC Sports – detailed overview of 1.0645 billion dollars in deferred obligations, the players and the payment years following the Edwin Díaz contract (link)
- MLB.com – official overview of Kyle Tucker's contract, including its value, opt-out clauses, signing bonus and 30 million dollars in deferred salary (link)
- MLB.com – explanation of the structure of Ohtani's contract, the schedule for 680 million dollars and the effect on its CBT value (link)
- MLBPA – MLB collective bargaining agreement for the 2022–2026 period, articles concerning the permitted amount, funding deadlines and present value of deferred compensation (link)
- MLB.com – official competitive balance tax rules and thresholds, including the threshold of 244 million dollars for 2026 (link)
- MLB.com – overview of negotiations for a new collective bargaining agreement and the expiration of the current agreement on December 1, 2026 (link)