As you know, Shohei Ohtani will be a more than coveted man in a year, when he becomes a free agent.
His enormous talent already opens him advertising contracts, he who now represents New Balance, as announced this morning.
In MLB, he could/should sign a contract of around $50 million per season over 10 years, so $500 million in total. We’re talking about $20 million as a pitcher, $20 million as a hitter and $10 million as a marketing tool.
But did you know that if Steve Cohen (Mets) had to pull out his pennies to sign the player, it would cost a lot more than the others?
In fact, if he offers him $50 million a year, he would have a bill of about $105 million to pay to get his hands on his services.
Why? Three words: luxury tax.
For the second year in a row, Cohen will pay the luxury tax in 2023. And for the first time, he has agreed to spend more than $290 million, which is the final level of the luxury tax.
What you need to know is that this will also be the case in 2024, whether Ohtani signs in New York or elsewhere. And when a club pays the luxury tax for a third year in a row, the penalties for the last luxury tax threshold are 110%.
Result? If Ohtani earns $50 million a year, Steve Cohen will have to pay $55 million moreover in penalty. So that’s a bill of $105 million for a single player… and for a year.
If he signs for 10 years and Cohen exceeds the final luxury tax threshold each time, we’re talking about a bill of more than a billion dollars for a single player.
And the player in question would receive less than half of the amount in question.
Some think this will set Cohen back a bit, but others think it won’t stop him.
We agree that if that happens, Ohtani will have no room for error. The title of MVP, he will have to win it often to justify such a salary.
And since Cohen has promised Mets fans a World Series by 2025… the signing may very well happen.
