Last Updated on 10/03/2022 by てんしょく飯
As has already been widely reported in Japan, the Angels announced on October 1 (local time) that they had agreed to a one-year contract with Shohei Ohtani for an annual salary of $30 million.
Ohtani, who received the highest salary under the annual salary arbitration system.
Ohtani, who will become a free agent after next season, had the last right to arbitrate his salary this offseason, but he accepted the Angels’ offer without exercising it.
The $30 million salary is the highest ever paid to a player in the final year of arbitration, surpassing the $27 million that Mookie Betts agreed to with the Red Sox in January 2020.
According to USA Today’s database, only 13 players have exceeded $30 million in annual salary this season, making Ohtani one of the highest-paid players in MLB at one point.
Is the 445.5% annual salary increase the highest in history?
It is not unusual in MLB for a contract to be agreed to before the season is over, as was the case with Ohtani. In fact, the Braves announced a contract agreement with veteran right-handed pitcher Charlie Morton on the same day as Ohtani.
In Ohtani’s case, however, he did not have to accept the Angels’ offer. If there was a gap between the two sides’ offers, he could have proudly applied for salary arbitration and had the arbitrator choose a salary that suited Ohtani’s needs. In other words, it would have been more advantageous to wait until the off-season, when salary arbitration is available, to agree on a contract.
Also, Ohtani had previously made it clear that he would leave contract negotiations for the season to his agent, and it was not expected that he would engage in full-fledged contract negotiations during the season. Therefore, this contract agreement was a complete surprise to the players.
The Angels were able to keep their expenses to a minimum during the three-year salary arbitration period.
Personally, I was hoping that if Ohtani would not agree to a major contract extension, he would file for salary arbitration. I was quite interested to see what the arbitrators would make of the value of a two-sport athlete who suddenly appeared in MLB.
Of course, the Angels offered the highest salary in history because they had a certain value for Ohtani as a two-sport athlete. However, the majority of the media in the U.S. believes that the salary would have been higher than $30 million if the salary had been adjusted, and it should be considered that the Angels were able to sign Ohtani for a very reasonable salary.
To begin with, the Angels saved a lot of money in 2021, the first year of Ohtani’s salary adjustment, by signing him to a two-year contract totaling $8.5 million ($3 million in 2021 and $5.5 million in 2022).
At the time, some questioned the two-year contract with Ohtani, who was repeatedly injured every year, but as a result, he played a full two-year season that season without any major injuries and won the MVP award by a full vote.
If Ohtani had not signed a two-year contract, last offseason would have been the second year of salary arbitration, which would have resulted in a significant annual salary increase. Incidentally, the highest amount in the second year of salary arbitration is Betts’ $20 million, so it could have been close to that amount or even higher.
Considering that, the fact that his salary this season was only $5.5 million is in itself a considerable gain for the Angels. In other words, the Angels were able to keep Ohtani’s three-year salary arbitration period to a minimum expense.
Will this agreement reignite trade talks this offseason?
From another perspective, the agreement on Ohtani’s contract is also considered to have been quite reasonable.
In June this year, Ken Rosenthal of “The Athletic,” a U.S. paid sports website, reported that Angels GM Perry Minassian had informally discussed a contract extension with Ohtani’s agent before the start of the season, which quickly brought Ohtani’s contract issue to people’s attention. The same reporter also reported that the Angels’ Perry Minajian GM had informally discussed a contract extension with Ohtani’s agent before the season started.
The same reporter also reported that the Angels value Ohtani’s value as a two-way player and believe that he would need an average salary on par with Max Scherzer to extend his contract.
Since Scherzer’s salary this season is the highest in MLB history at $4,333,333, the Angels would have expected a salary of at least $40 million. That being the case, $30 million would be quite reasonable.
However, the Angels’ team situation has changed drastically since Rosenthal’s report in June. Owner Arte Moreno suddenly announced his intention to sell the team in late August.
Until a new owner is decided, the future of the team is not clear at all. Of course, the budget available for players will also depend on the new owner. GM Minassian was not in a position to offer Ohtani a multi-year contract with an average annual salary of more than $40 million amidst all these uncertainties, and it seems that he had no choice but to avoid salary arbitration for now and shift to signing Ohtani for the minimum amount of money.
However, the fact that Ohtani’s salary for next season was set at $30 million without waiting for the season to end should have made it considerably easier for teams interested in acquiring him. Especially if it is a strong team with a large budget, it is unlikely that the $30 million will put pressure on their total annual salary, and they can now welcome him to their team without any problems.
In fact, this contract agreement may lead to a fierce competition for Ohtani this offseason.
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