New Shohei Ohtani contract wrinkle will have Dodgers under scrutiny before lockout

Shohei Ohtani has officially won his second World Series ring in two seasons since joining the Dodgers, and he's on his way to his second straight MVP award. He more or less got the postseason monkey off of his back as quickly as it came, and the Dodgers look primed to go for the three-peat next year.

And the Dodgers only paid him $2 million in 2025.

As Dodgers fans have said many times and will have to keep continuing to say: deferrals didn't start with Ohtani and are an available strategy for any team. What is undeniable is that the amount of money Ohtani will be paid after his contract is up is exorbitant, and $68 million is still a ridiculous amount for any team to pay him (even if the Dodgers have the luxury of saving up).

Unsurprisingly, fans don't like deferrals, but players do. The Players Association has already been very clear that they will advocate on behalf of players for the continued usage of deferrals, should players want them.

It'll all be roped into the fight that's already hanging over the 2026 season. The current Collective Bargaining Agreement will be up after 2026, and it's highly anticipated that some sort of work stoppage will abbreviate the year, as owners are expected to push for a salary cap and players are expected to, as always, oppose it.

And there's a wrinkle with Ohtani's deferrals that will almost certainly come into play: he could potentially avoid paying about $90 million in California state income tax because of them.

Shohei Ohtani's massive deferrals with Dodgers also allow him to skirt California income tax

This isn't a new concern necessarily, and California lawmakers were very quick to jump on the initial news of Ohtani's contract structure on tax-related grounds. If Ohtani moves out of California after his Dodgers contract expires, he won't be taxed California's 13.3% annual rate on the $68 million he'll receive annually through 2043. If he were to move to any of Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, or Wyoming, he would avoid being taxed at all.

This, of course, is not an example that state governments, particularly in California and New York, want other players to follow.

It just adds another layer of messiness to what is anticipated to be a messy fight when the owners and players' union have to come to the table. The last time there was a work stoppage over the salary cap, the 1994 season was cut short and the postseason was canceled, and then the 1995 season started late.

Let's hope that it doesn't come to that, but Ohtani's contract (and all of the Dodgers' other heavily deferred deals) are sure to come into play.