Ohtani’s Contract Goes Beyond Dollars and Sense
Japanese baseball players are taught to keep a low profile and let their performances do the talking. Yet for more than a decade, Shohei Ohtani has been willing to make waves.
In high school, he wanted to become the first Japanese player to go straight to the Major Leagues. When he debuted as a professional in Japan instead, he insisted on playing the field and pitching, something rarely done. He continued the feat after joining the Los Angeles Angels six seasons ago, winning two Most Valuable Players awards as well as the nicknames Shotime and Japan’s Babe Ruth.
Now, Ohtani, 29, has broken another barrier, signing a record 10-year, $700 million contract to play for the Los Angeles Dodgers. The deal, announced Saturday, was as eye-popping as his tape measure home runs and blazing fastball: more than $275 million above what his Angels teammate Mike Trout received in 2019; and $10 million more per year than Damian Lillard of the N.B.A.’s Milwaukee Bucks, who had the highest annual salary in American pro sports. It also eclipses that $50 million to $60 million that the Argentine soccer star Lionel Messi is earning each year to play for Major League Soccer’s Inter Miami.
Ohtani’s belt-busting contract highlights the often confounding economics of baseball and professional sports more broadly, where networks and companies spend hundreds of millions, even billions, of dollars to link their businesses to players and teams whose success can be ephemeral.
Japanese players from Hideo Nomo to Ichiro Suzuki to Hideki Matsui proved to be bankable signings. But Ohtani’s record payday is something entirely different. It is evidence that Japanese players aren’t just very good but are among the best — and most popular — in an increasingly international game.
“The number of Japanese players coming to the United States has been building, but this takes it to a whole other level,” said Vince Gennaro, who was a consultant to several major league teams and now runs the sports business programs at New York University.
Ohtani is not the only highly coveted Japanese star this off-season. Yoshinobu Yamamoto, 25, has been the best pitcher in Japanese baseball the past three seasons and is being courted by the Yankees, the Mets and other clubs. Shota Imanaga, who pitched against Team USA in the World Baseball Classic, and Yuki Matsui of the Rakuten Golden Eagles, are two other left-handed pitchers also on the market.
But teams evaluating their talent face the same challenges they do with American players because running a professional sports team is not like running an airline or supermarket. Supply and demand, and profits and losses are moving targets, not fixed positions. The value of a player’s contract is often based on a grab bag of statistics coupled with hunches that his or her success will continue unimpeded by age, injury or bad luck.
Though promoted as the ultimate two-way player, Ohtani is unlikely to even pitch in 2024 because of an elbow he injured last season. He’s still a formidable hitter, of course, but his Bunyanesque reputation comes from his prowess both at the plate and on the mound.
The Dodgers, who are paying Ohtani the equivalent of the G.D.P. of a small Pacific nation, will make back only a fraction of what they’re paying him to stay in the lineup. The Dodgers have led the league in attendance 10 out of the last 11 seasons, so there are only so many more tickets they can sell. Raising ticket prices is also tricky because it could push out average fans.
Japanese companies, no doubt aware that Ohtani’s games will be broadcast live in Japan, will rush to buy signage at Dodger Stadium. How much more they might be willing to pay than an American company is unclear. The Dodgers keep all the revenue from the sale of jerseys, caps and other merchandise in their home market, but sales of gear sold elsewhere must be shared with all 30 major league teams.
And while the Dodgers already have a very lucrative local television deal, the league controls national and international media deals, including the one that allows games to be shown in Japan.
Still, Ohtani’s achievements are undeniable, particularly in his home country. Baseball has been the national sport in Japan for more than a century, and for most of that time, the Japanese have used the game to measure themselves against the United States. For decades, American teams led by Babe Ruth and many others demolished their hosts. But over time, the competition has evened.
Even as Japanese players succeeded in the major leagues, however, skeptics found reason to be critical. Hideo Nomo joined the Dodgers as a pitcher in 1995 and was voted Rookie of the Year, but cynics said he succeeded because he had an unorthodox, stop-motion delivery. When Ichiro Suzuki set a major league record in 2004 with 262 hits in a season, critics said he did so primarily by hitting ground balls and line drives. Hideki Matsui was a top slugger in Japan, but turned out to be an ordinary power hitter on the Yankees.
Ohtani, though, is beating the Americans on their own terms. “He can hit a home run 500 feet and throw a ball 100 miles per hours, and he’s bigger and stronger than most Americans,” said Robert Whiting, who has written several books on baseball in Japan, including “You Gotta Have Wa.”
Ohtani’s Ruthian contract might never have been signed if Nomo, Hideki Irabu and Alfonso Soriano hadn’t challenged Japanese restrictions on the movement of players in the 1990s. Nomo, for instance, retired from Japanese baseball so he could sign with the Dodgers, while Irabu pushed back when his old team, the Chiba Lotte Marines, cut a deal to send him to the San Diego Padres. Irabu was later sent to the Yankees, his preferred destination. A couple of years later, Soriano, who had been drafted as a teenager by the Hiroshima Carp, followed.
“The real credit for the growth of the Japanese market in the U.S. belongs to Nomo, Irabu and Soriano,” said Gene Orza, a longtime lawyer for the M.L.B. Players Association. “Those three broke the dam. Ohtani really owes it to them.”
And even if the Dodgers do not make back their money directly from Ohtani, they may be playing the long game. They have made the playoffs 11 consecutive years, but won only one World Series title. By teaming up Ohtani with Freddie Freeman and Mookie Betts — two other former M.V.P.s — as well as an excellent pitching staff, the Dodgers become the dominant team of the decade.
That is a far cry from the Angels, who never made the playoffs or even had a winning record during Ohtani’s six seasons with the team.
“If the Dodgers win two or three World Series in the next six, seven years,” Gennaro said, “Ohtani will be the face of the franchise and a whole generation of fans will follow the team for years.”
