How does deferred payment work? Understanding Shohei Ohtani's contract in comparison with Freddie Freeman and others

Shohei Ohtani's massive, record-setting contract is going to have a lot of deferred payment. The superstar will eventually get that $700 million, but it won't all come within the next decade. This contract manuever allows teams to eventually pay the big money they signed players to while granting some flexibility to build a roster in the present.

Deferred payment simply puts off the owed money until the future. Baseball teams set aside some money to pay that later on, sometimes with interest. Instead of owing all that money before the contract ends, this truly sets athletes up for life. Often, the payments continue far after they've retired.

Deferred payment is not a new trend, though. Ohtani is the latest deferred payment contract to come up, but he's far from the first, last or only example. One of the most famous examples is, unsurprisingly, Bobby Bonilla.

The New York Mets were an early entrant to this and are still paying $1 million to the slugger every year until 2035, unfathomably after the Ohtani contract ends. There are a number of other examples, but they're unknown because they haven't retired.

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Comparing deferred payments in MLB contracts

Shohei Ohtani's MLB contract is heavily deferred. The Dodgers will defer almost all of the deal. In fact, they'll only be paying $20 million over the life of the contract. The remaining $680 million begins being payed after.

The amount that the Dodgers are deferring is incredible, but it's far from the only example. In fact, LA is deferring another big contract they have on the books in Freddie Freeman.

His six-year, $162-million contract with the Dodgers includes $57 million of deferred money. That's far less than Ohtani's, but the Dodgers are still deferring a significant chunk, which is to be paid from 2028-2040.

Other players have deferred payments as well. The Washington Nationals owe Max Scherzer $15 million every year from 2022 to 2028. The Nats are also paying total of $80 million deferred money to Stephen Strasburg from 2027 to 2029.

Stephen Strasburg's contract has deferred payments

Francisco Lindor will be paid $5 million a year from 2032 through 2041 by the Mets. Jacob deGrom's Mets deal included $52.5 million deferred. The Milwaukee Brewers deferred $28 million of Christian Yelich's deal.

Chris Sale is owed $10 million a year from the Boston Red Sox from 2035 to 2039. A lot of big contracts have deferred money, but none of them compare to Ohtani's.