Shohei Ohtani Set to Lose $2,000,000 From $700 Million Contract Thanks to the ‘Michael Jordan Tax’
Shohei Ohtani and Michael Jordan (Credits: USA TODAY Sports and Getty Images)
The recent signing of Japanese baseball sensation Shohei Ohtani by the Los Angeles Dodgers has shocked the sports world. The whopping 10-year, $700 million contract sets records and has drawn attention from various sports. However, a significant portion of this massive deal is set to be affected by the famous ‘Michael Jordan’s Revenge’ law, also known as the jock tax.
This unique tax law has its origins in 1991 when Michael Jordan led the Chicago Bulls to an NBA Championship win over the Los Angeles Lakers. After this win, states started imposing a non-resident income tax on visiting players. Illinois introduced this tax in response to California’s decision to tax Jordan, hence calling it as ‘Michael Jordan’s Revenge’ tax.
Shohei Ohtani just signed the richest deal in sports history (10 years $700 million).
Here's how much he will actually earn: 😲
$70M: Salary
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$25.9M: Federal Tax
$4.65M: California Tax
$2.1M: Agent Fee
$2.0M: Jock Tax
$1.64M: FICA/Medicare
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$33.6M: Net Incomepic.twitter.com/CcyeDkA92p— Andrew Petcash (@AndrewPetcash)
December 9, 2023
This law greatly impacts Shohei Ohtani’s contract. The renowned 5x NPB All-Star will have to give a major portion of his contract to these taxes. After various deductions, it is estimated that Ohtani will earn about $33.6 million annually, with almost $2 million going toward the jock tax.
MLB evaluator compares Shohei Ohtani to Michael Jordan
Shohei Ohtani’s record-setting contract with the Los Angeles Dodgers is more than just a major deal in baseball, it is a calculated long-term investment, similar to acquiring a player of Michael Jordan’s status. Praised for his outstanding performance over the past three seasons, Ohtani has secured the largest contract by total value in professional sports history.
An MLB evaluator, as reported by The Athletic, compared Ohtani to Michael Jordan, emphasizing the value he brings to the Dodgers. The evaluator predicts that the deal will pay for itself in six to seven years, stating Ohtani’s ability to generate revenue. His popularity goes far beyond the baseball field, drawing attention from international markets, particularly from Japan, and attracting major advertisers to the Dodgers organization.
“It’ll pay for itself within six or seven years,” the evaluator said. “He’s literally just a money factory. Even just on advertising alone. All the eyeballs from Japan. He’s like Michael Jordan to them.”
Is Shohei Ohtani worth it?
“It’ll pay for itself within six or seven years…He’s literally just a money factory. Even just on advertising alone. All the eyeballs from Japan. He’s like Michael Jordan to them. He’s like Taylor Swift.”
with @SamBlum3: https://t.co/fq4UvqFOTj
— Fabian Ardaya (@FabianArdaya) December 9, 2023
Ohtani’s impact is also noticeable in the merchandising and fan engagement arenas. His jersey became the highest-selling in 2023, and his presence alone has drawn fans to Angel Stadium from all around the world.
Ohtani’s portfolio of 13 endorsement deals, which includes companies like Seiko and Fanatics, says a lot about his marketability and the Dodgers’ potential financial gain. Ohtani’s arrival to the Dodgers improves the team’s chances of winning games as well as its value from an international business perspective and Major League Baseball.
