Los Angeles Dodgers SP/DH Shohei Ohtani has one of the most intricate contracts in the history of professional sports. He has $68 million of his deal deferred until after his playing career ends.
As Dodger Way’s Katrina Stebbins relays, this loophole in his deal, designed to circumvent the state of California’s punitive tax laws, could help cause an MLB lockout that could affect the 2027 season.
The lockout would begin in December 2026. Stebbins has an uneasy feeling it'll happen, and Ohtani will be a scapegoat.
“This isn't a new concern necessarily, and California lawmakers were very quick to jump on the initial news of Ohtani's contract structure on tax-related grounds. If Ohtani moves out of California after his Dodgers contract expires, he won't be taxed California's 13.3% annual rate on the $68 million he'll receive annually through 2043. If he were to move to any of Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, or Wyoming, he would avoid being taxed at all,” Stebbins wrote.
“This, of course, is not an example that state governments, particularly in California and New York, want other players to follow.
“Let's hope that it doesn't come to (a lockout), but Ohtani's contract (and all of the Dodgers' other heavily deferred deals) are sure to come into play.”
Ohtani and the Dodgers are, as Dave Roberts warned after winning the 2025 NL pennant against the Milwaukee Brewers, ruining baseball. Los Angeles figured out a way to keep Ohtani’s cap figure down to spend on other top-tier players, and Ohtani benefits by not having to play by the tax rules in his contract.
Others aren’t catching up. Dodgers President of Baseball Operations Andrew Friedman’s work is going to cause a revolution in the sport so that other teams don’t copy what he does. For the sake of parity.
That’s what ruining baseball looks like. And now, owners across the league are going to ruin parts of the 2026/2027 offseason, and perhaps even segments of the 2027 regular season schedule, as revenge.