Wed Oct 29 00:20:00 UTC 2025: Here’s a news article summarizing and rewriting the provided text:
Ohtani’s $700 Million Dodgers Deal: A Masterclass in Baseball and Tax Avoidance?
Los Angeles, CA – Shohei Ohtani’s record-breaking 10-year, $700 million contract with the Los Angeles Dodgers, signed in December 2023, isn’t just about baseball; it’s a potential blueprint for high-earners looking to minimize their tax burden. While Ohtani continues to dominate the league, leading the Dodgers to their second straight World Series appearance, a unique feature of his contract could save him an estimated $90 million in California state income taxes.
The deal, structured to pay Ohtani only $2 million per year for the first 10 seasons and defer the remaining $680 million to the subsequent decade, leverages the varying state income tax rates across the U.S. California’s top marginal income tax rate is a hefty 13.3%. However, by deferring the bulk of his earnings, Ohtani can potentially avoid this tax by relocating to one of the nine states with no income tax (such as Nevada, Texas, or Florida) once his playing career with the Dodgers is over.
“The deferral was due, in part, to the tremendous tax benefits that could be afforded to Ohtani, should he wish to leave the state of California and recognize this income as a resident of a state with low or no income taxes,” said a Poole Thought Leadership article.
Ohtani’s on-field performance has more than justified the Dodgers’ investment. Since joining the team in 2024, he’s become the first player in MLB history to achieve the “50-50 Club” – 50 home runs and 50 stolen bases in a single season. His performance in the 2025 World Series, including a multi-homer game and intentional walks highlighting the fear he instills in opposing teams, has solidified his status as one of baseball’s all-time greats. Notably, he is also scheduled to pitch in Game 4.
His impact extends beyond the field, transforming him into a global pop culture icon and a sought-after brand ambassador.
The tax strategy, however, hasn’t gone unnoticed. California lawmakers have already attempted to close this “loophole” through legislation, but efforts have so far been unsuccessful.
The question now is whether Ohtani’s contract structure will become a new normal, encouraging other high-salaried individuals, from athletes to executives, to strategically defer income to minimize their tax liabilities. The Dodgers are currently benefiting from Ohtani’s talent, but whether this unique contract sets a new standard for tax avoidance in professional sports and beyond remains to be seen.
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