The Shohei Ohtani deal has continued to bewilder the masses. A $700 million contract out of which $680 million is deferred: that’s unheard of. This led to some fans questioning the Los Angeles Dodgers for exploiting a loophole. So speculations began regarding the impact of such an act. In an Exclusive interview with EssentiallySports, popular analyst Jim Callis explained how this was really just a smart piece of business for the Blue Crew. 

Ever since the Ohtani signing, the Dodgers have gone on an overdrive. It was the relatively low AAV of Ohtani’s contract that allowed them to make a bunch of signings. Callis explained how if the Dodgers play their cards right, the deal could become even cheaper for them.

Shohei Ohtani and the Dodgers’ brilliant play

Shohei Ohtani signed a 10-year, $700 million contract with the Dodgers. But for CBT purposes, the cost of this contract is $460 million! That’s the beauty of what the Blue Crew and Ohtani managed to accomplish through this deal. In an Exclusive interview with EssentiallySports’ Mohsin Baldiwala, Jim Callis brought these points to his attention. 

“It (deferrals) has existed before but you’ve never seen anyone do it to this extreme. I think it’s really smart because, on one hand, Ohtani’s agent can say hey we have a $700 million contract while for Dodgers it costs them like $450 million,” Callis said. 

He then shifted to Ohtani’s endorsement earnings and how that helped the deal, “For Ohtani, he makes so much in endorsements…I think there’s been estimates he makes $40 or $50 million in endorsements. It’s smart because it helps in terms of luxury tax, it helps in terms of present-day cash flow,” Callis stated.

Callis agreed that Ohtani’s high income from endorsements is an outlier that made this deal possible. Even after taking only $2 million in salary, Ohtani could very easily still be one of the highest-earning baseball players due to his various brand deals. This deal has helped create a star-studded Dodgers team. 

Watch this story: Shohei Ohtani’s Two-Way Dream: Before Injury, He Always Wanted Both!

Even though his contract is worth $700 million, due to huge deferrals, the CBT value had to be lowered to $460 million. Callis informed that the Dodgers can lower their costs even more, provided they make substantial investments. All in all, this deal could have been a massive win for all the parties involved.

Read more: LA Dodgers’ Historic Shohei Ohtani Contract Sees Pushback, Deferred Payment Causes Tax Law Debate