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Buster Olney’s latest for ESPN (Insider subscription required) asks the question, “Can the Angels keep Shohei Ohtani?” with the implication from the second part of the headline “A payroll crisis looms in Los Angeles” being that the question is really “Can the Angels afford to keep Shohei Ohtani?” Yes. Yes they can. Alright, see you all next week.
OK fine let’s get into this.
“He’ll get as many years as he wants,” mused an evaluator. “Let’s say he gets five years [at] $50 million a year.”
Five years, $250 million?
“At least,” another long-time evaluator said.
What that means is that Angels are obligated to pay those two players about $75 million through the 2026 season — and Ohtani may well be more expensive. Signing Ohtani to a multiyear deal might mean owing something in the range of $120 million to $130 million to just three players.
This for a franchise that has never gone over a luxury-tax threshold. According to Cot’s, this year’s payroll of $182 million is the Angels’ highest ever.
Color me skeptical that Ohtani would pull in $50 million per year, given that Alex Rodriguez signed for 10 years, $252 million in time for the 2001 season — an average annual value of $25.2 million — and the largest contract going in today’s game is that of Ohtani’s teammate, Mike Trout: $426.5 million over 12 years, an AAV of $35.5 million. Ohtani is easily one of the best parts of MLB from either an entertainment or a production perspective, but imagining him jumping Trout’s AAV in a few years by $15 million per when Trout himself only topped A-Rod’s nearly 20-year-old deal by $10 million annually, when Gerrit Cole’s recent eight-year, $324 million deal has an AAV of $36 million, is hard to do. Maybe Ohtana is the first $40 million per year player in MLB, sure, on the strength of him doing two jobs with one roster spot, but $50 million per seems to be in the realm of “you can find anyone to anonymously say anything you want as a quote for a story” than reality.
More importantly, though, it doesn’t really matter if Ohtani is going to cost $40 million or $50 million annually. The answer as to whether the Angels can keep him is the same: yes, they can. Should they? Obviously. Will they? That’s the only question worth asking, because it’s the only one that might net you a “no” in response.
As Olney points out, the Angels have their highest-ever payroll right now, in 2021, when Ohtani does not cost $40 million or whatever per year, but instead is making $3 million. He is incorrect when he says the Angels have never exceeded the luxury tax threshold, as they did so back in 2004, but it was by such a minuscule amount that Olney might as well have been right. In 2004, the Yankees were nearly $26 million over the tax threshold: the Angels were $930,000 over. The payroll figure Olney cited also isn’t the important one, as that was just for their 26-man roster: their 40-man roster cost with all of the extra bits like medical costs that actually counts for luxury tax purposes is $198.2 million, about $12 million below this season’s threshold.
Albert Pujols’ contract comes off of the books after this season, and that’s no small thing, since he’s making $30 million in the final year of his contract. Dexter Fowler is making $16.5 million to not play after undergoing knee surgery, but that money will be off the books for 2022 as well. The underperforming Justin Upton won’t be finished in Los Angeles until 2023, but there’s no real rush there, since we’re talking about Ohtani’s free agency, which isn’t until 2024, anyway. When Upton is done, that’s $21.1 million against the luxury tax threshold gone. Do you see where I’m going with this? A whole lot of money is going to come off of the books between the publication of Olney’s question and the time the Angels actually need to answer it. Sure, the Angels will need to find better results with who they spend their money on next time around — there’s a tale as old as Pujols’ Angels’ career — but the money is there, even if they don’t want to go over the luxury tax threshold.
Olney says Rendon isn’t going anywhere, but if Rendon keeps playing like he is this year, then yeah, he will: if the Angels held onto a declining mid-30s third baseman while he pulls in $35 million per year rather even though doing so would cost them Shohei Ohtani, then… well, sure, it is the Angels, so this is a possible future, but still, saying Rendon isn’t going anywhere because he’s “happy with the Angels” years before the conversation of actually having to deal him because they aren’t keeping Ohtani otherwise is silly, is all.
Anyway! Angels’ owner Arte Moreno might be averse to crossing the luxury tax threshold once again, but if Ohtani is the team’s second-best or best player come free agency time, then they kind of have to do it if that’s the financial situation they find themselves in. Ohtani is a star pitcher and a star hitter, in the form of a single roster spot and paycheck. Signing Ohtani the hitter and Ohtani the pitcher as separate entities would use up two roster spots and cost more than the $40 million or whatever the single man will pull in. He is even more of a bargain than every other star, even if he ends up being more expensive than the rest of them, simply because he is two players in one. In a game obsessed with efficiency, you don’t get much more efficient than one person being two.
And Moreno can afford it, even if it does push his team over the tax threshold. Let’s say they do keep Rendon: he’s only around through 2026, anyway, two years into whatever new deal Ohtani signs. Maybe there are just two years where the team is over the luxury tax. Maybe signing the extra pitching needed to actually successfully do something with having Trout and Ohtani on the same team keeps them over the threshold even longer. Why should that matter? Moreno is worth $3.5 billion. The Angels are valued at around $2 billion. Are you going to tell me that local revenues will go up if they let Ohtani walk in order to save money? That the Angels won’t make back what they have to spend to cross the tax threshold, and their penalties for doing so, in postseason revenues alone?
The penalties just aren’t so severe as to actually discourage spending. They’re an excuse, more than anything, to not spend. The Red Sox won the World Series in 2018 thanks to their spending beyond the luxury tax threshold, and the penalty was a grand total of $11.95 million. The team has since acted as if that $11.95 million wasn’t worth it, and they’re paying the price, of course, since it turns out a team with worse players is worse, but I digress. Or maybe I don’t given this is the Angels we’re talking about. Again, Moreno is worth $3.5 billion: given how much the Angels have become a running joke for wasting Trout and now Ohtani, can you imagine if he let Ohtani walk after 2023 in order to save a few million per year?
The problem is that yes, of course you can, this is the Angels, this is Arte Moreno. There is a very simple solution to all of this, and it’s to just pay Ohtani to stay on the Angels. If he’s still looking like he’s this guy in a few years when free agency pops up, then pay him to be that guy, the one there is no other like. If the Angels want to try to keep the costs a little lower, they can sign him now, guaranteeing Ohtani more now in exchange for a lower AAV and lessened potential tax penalty in the future. There are ways around this supposed problem, and the idea that this is a “crisis” when it’s something an extremely rich person could fix by risking that they would be ever-so-slightly, unnoticeably less rich should an Ohtani deal go awry is as silly as the idea that Rendon is locked in forever because he’s happy now.
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