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Tuesday newsletter time: Could Rangers follow Ohtani contract blueprint?

(AP photo/Jeff Chiu)



Shohei Ohtani and the Dodgers have turned a 10-year, $700 million deal into a deal that has a present-day value of $460 million and that will pay him only $2 million a year for the term of the contract.

And it’s all perfectly by the book.

Ohtani and the Dodgers might have found a loophole in the collective bargaining agreement by deferring $680 million of the total bill. Ohtani will collect $68 million a year in the first 10 years after the deal ends, and the Dodgers will not take the full $70 million hit when calculating the luxury tax.

They are still able to land free agents, good ones, and the belief is they will attempt to sign right-hander Yoshinobu Yamamoto. Maybe they can defer the majority of that contract, too.

Maybe the Rangers could do something similar. The Dodgers have created a blueprint for the other 29 MLB teams.

The player, of course, has to agree to defer a portion of his salary. Max Scherzer did it with the Nationals, and they are still paying him. He will collect $15 million in 2024 from Washington. He was established at that point of his career and could take half his salary without any complications.

Ohtani is making a killing in endorsement money, so he’s going to scrape by with the $2 million. No other free agent has that kind of supplemental income, but they’re all comfortable. They could all defer some money.

Would they be motivated to do so, as Ohtani was? The chance to win, which Ohtani believes he is getting, is pretty good motivation.

As memory serves, Jordan Montgomery had a really fun time winning with the Rangers.

Minor returns

The Rangers reached an agreement with right-hander Jesus Tinoco on a minor-league deal, according to Rangers Today subscriber/New York Post writer Jon Heyman.

Tinoco, who pitched in Japan in 2023, should ring a bell. He was the Rangers pitcher who surrendered Aaron Judge’s 62nd home run late in the 2022 season.

The key thing to note is that it’s a minor-league deal. Tinoco is not on the 40-man roster, and his numbers with the Seibu Lions would suggest he has work to do. He walked 20 in 35 innings but allowed only one home run.

He is also pitching this winter in Venezuela, where he has a 1.69 ERA in only eight appearances.

Podcast catch-up

The Rangers Today Baseball Podcast will pick up again with its final episode of the year Friday, when we will wrap up 2023 and talk about some front-burner issues that need to be addressed before next season.

Barring something coming up, Rangers analyst C.J. Nitkowski will be the guest.

The holidays being what they are, our schedule has been a big wonky. However, the two most recent episodes are live on YouTube.

Episode 100 is a look back at the highlights of our first 99 episodes. Episode 101 was a winter meetings preview that also included guest Luke Savage. He’s a Rangers minor-leaguer after a college career at TCU. He’s also the founder of Blessed Feet, a wonderful charity that helps kids in the Dominican Republic and now the Metroplex.

Doggy video!

Poor fella, but that is pretty useful. Enjoy.

Jeff Wilson, jeff@rangerstoday.com

Jeff Wilson

Sports reporter for two decades. Sports fan for life. Covers the Texas Rangers. Graduate of TCU. Colorado native. Author of Purple Passion: TCU Football Legends (https://t.co/2fmXLyympx). Follow me on Twitter at @JeffWilsonTXR

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1 Comment

  1. deGrom Texas Ranger December 12, 2023

    The annoying thing with net present value calculations is that you can accomplish the same thing by backloading a deal (Glasnow at 5 MM and 25 MM) and lower the NPV from a typical 15 MM and 15 MM deal, and this doesn’t matter, but deferring after the contract is over somehow lowers the tax hit. The Padres didn’t even get a discount by extending Judge’s contract, and yet, that was vetoed. MLB has different rules for favored franchises. Other than the headline, it is basically the same (ignoring the tax rates in CA vs Japan or somewhere else in the US) as taking 10/460 and investing that money at the discount rate. I want Hader for 6/110, but with thr same deferral nonsense to bring it to a hit of like 10 MM. Force Manfred to man up and do something!


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