Japanese Ace Yoshinobu Yamamoto Saves $8.5 Million in Record-Shattering $325 Million Deal

What’s better news than Yoshinobu Yamamoto teaming up with Shohei Ohtani? Well, congratulations to the Los Angeles Dodgers for winning the race in bagging two of the hottest free agents of the 2023 off-season. The club has now committed over a billion in contracts to land the top two Japanese stars. But how did they do that? 

Well, what’s interesting is that contrary to Shotime’s deferral, Yoshi does not have any, as per reports. His record-breaking, $325 million – 12-year deal includes a signing bonus of $50 million that Los Angeles would have to pay in order to land the right-hander. That said, there is a surprising element of ‘tax saving’ that comes in. 

Intricacies of Yoshinobu Yamamoto’s Contract

@BNightengale took to twitter to reveal an information nugget about Yoshi’s massive contract. While there are many details to it, “Yoshinobu Yamamoto will save about $7.2 million in California taxes and $1.3 million in federal income tax with his $50 million signing bonus in 2024, per @SportsTaxMan”. 

Robert Raiola, CPA, the Sports Illustrated contributor, mentioned in his tweets that the former Orix Buffaloes ace will receive his $50,000,000 signing bonus in 2024. And the highest federal income tax rate for 2025 is set to return to 39.6%. In addition to that, considering Yamamoto is not a resident of California, he won’t be subject to California taxes on the signing bonus. With that, it becomes key to look at the breakdown of his contract. 

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There are three elements to it primarily. As per dodgersnation.com, apart from the signing bonus, there are no deferrals. There are two opt-outs available in the deal; one after 2029 and the other after the 2031 season. Not to mention, the Southern California team would have also had to $50.6 million posting fee to his former NPB team, which they are open to. 

The Los Angeles Dodgers On A Record-breaking Spree

Having stated the intricacies of the MLB debutant’s contract, it is to note that the Blue Crew has made history. Yoshi’s contract is by far the largest guaranteed deal for a pitcher in the history of MLB. As speculated, this massive number has surpassed the Gerrit Cole’s contract with the New York Yankees in 2019. It is also the largest value in terms of years that a pitcher has received so far. 

Read More : First Shohei Ohtani, Now Yoshinobu Yamamoto: How Two Japanese Stars Brought the Free Agency Market to a Standstill

The free agency run for this 25-year-old was intense, with the New York Mets almost equaling the Dodgers in terms of their contract value. However, the young man chose the latter. Now, though Ohtani, will continue to hit. As he his pitching recuperates, Yamamoto is one lethal force that competitors need to beware of.