Two Major Deals
How Truly Valuable Is One’s Ability To Drive In Circles Or Swing A Bat?
B. N. Dent
OVER THE PAST COUPLE OF MONTHS, the world of sports has been witness to groundbreakingly large contracts that have shocked fans in both their magnitude and unforeseen nature.
After many high-level European footballers decided to ‘secure the bag’ and transfer to the Saudi Pro League in early 2023, I personally thought that this move was the largest contract-related controversy that I would be seeing in sports for a while. But I guess there’s always some rich club out there just sitting on a fortune, waiting to spend it all.
Whenever I hear of these absurdly valuable contracts, three thoughts invade my mind. Firstly, what do these athletes even do with all that ‘dosh’? Secondly, how much thought from sports analysts and accountants goes into the exact number provided on each contract? And thirdly, how deserving is each player actually of that amount of money? When inspecting from a larger scope, and comparing leagues across a multitude of sports, I feel that there is often an inadequate correlation between one’s pure ability and how much they earn. But I guess capitalism does not always reward the best, but rather who is most marketable or able to generate the most revenue for an organisation. Nevertheless, let’s get onto these contracts.
The two recently surprising contracts that I wish to cover in this article come from Major League Baseball (MLB) player Shohei Ohtani and Formula 1 (F1) driver Lewis Hamilton.
Starting in chronological order, we have 29-year-old Shohei Ohtani who, on the 9th of December 2023, signed a US $700 million, 10-year deal with the Los Angeles Dodgers after spending six seasons with the Los Angeles Angels. Not only did this contract make history by becoming the largest contract in the MLB, surpassing the previous record of $426.5 million in 2019, but it also became the biggest contract in sporting history. The contract is even more intriguing in the fact that Ohtani has asked and agreed to defer $680 million of the total sum for ten years. Some speculate the reasoning behind this is to decrease Ohtani’s burden of wealth management and also create the possibility for the player to avoid income tax if he were to move back to Japan before the expiry of the 10-year deferral. But where does Ohtani’s serious value come from? First of all, Ohtani is a two-way talent, meaning he possesses both an extraordinary pitching and hitting ability. This dual threat ability has become increasingly rare and sought after in modern baseball as players currently tend to specialise in just one facet of the game. From raw statistics, Ohtani is currently simultaneously the 9th best pitcher and 6th best hitter in MLB. This, paired with his 6ft 4 frame and brutal consistency throughout his previous seasons in the league, clearly demonstrate his great value. Time will tell if he can lead the Dodgers to more World Series in the near future.
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Shohei Ohtani pitching for the Los Angeles Angels.
Onto the more recent contract, we have Lewis Hamilton who recently announced that he will be leaving Mercedes at the conclusion of the 2024 F1 season to join Ferrari in 2025. The shock factor of this contract does not come from its value (which has yet to be disclosed), but rather its unforeseen nature. Hamilton left McLaren in 2013 to join Mercedes, and over the course of the past 11 years, he has formed an extremely solid bond with the team, managing to win six world titles for the organisation. As such, many F1 enthusiasts believed that Mercedes would be the last team that Hamilton would race for. In an announcement on social media, Hamilton explained his reasoning for the move, stating that he wished to take on a new challenge, and the prospect of driving for Ferrari has been a dream of his since childhood. Regardless, Hamilton states that he plans to give his all for Mercedes whilst competing in the 2024 F1 season.
Lewis Hamilton