Shohei Ohtani

Shohei Ohtani is coming off an MVP-winning season, the kind of showing Angels fans dreamed of when he chose to sign in Anaheim during his highly-publicized posting process over the 2017-18 offseason. It’s widely expected the Angels will try to work out a long-term deal with the two-way star, but those discussions didn’t get underway prior to the lockout.

Ohtani tells Sam Blum of the Athletic (via an interpreter) the team and his representatives at CAA Baseball have had “no talks yet” regarding an extension. Last October, the 27-year-old expressed openness to a long-term deal. He didn’t go into detail regarding the chances of eventually signing an extension when speaking with Blum, instead noting that he’s “in the second year of my two-year deal coming up this season” and “just trying to complete that last year of the two-year contract.”

As Ohtani noted, he signed a two-year contract last February that guaranteed him a total of $8.5MM to avoid arbitration through 2022. He’ll make $5.5MM this year and is scheduled to go through arbitration a final time before reaching free agency two seasons from now. Ohtani would be entering his age-29 season during his trip to the open market. That’s relatively young for a free agent, setting him up for a megadeal if he stays healthy and continues to perform at an elite level.

The parameters of a potential Ohtani extension are essentially impossible to predict. There are, of course, no contractual precedents for players with his skillset. Ohtani’s coming off a .257/.372/.592 showing with 46 home runs and 26 stolen bases. That overall offensive output checked in 52 percentage points above the league average by measure of wRC+, the fifth-highest mark among 135 batters with 500 or more plate appearances. While he didn’t perform particularly well in the abbreviated 2020 season, Ohtani has a wRC+ of 120 or better in his other three big league campaigns.

In addition to that middle-of-the-order offense, Ohtani has flashed at least middle-of-the-rotation upside. He’s worked 183 2/3 innings across 35 MLB starts, posting a 3.53 ERA/3.75 SIERA with a very strong 29.2% strikeout rate, albeit with an elevated 9.7% walk percentage. The majority of those frames came last season, when he put up a 3.18 ERA in 23 starts. He averaged north of 95 MPH on his fastball, backed up by an elite swing-and-miss secondary offering in his high-80s split.

Given Ohtani’s unique ability to produce at a high-end level on both sides of the ball, it stands to reason the Angels would love to keep him in the fold beyond the next couple seasons. The team does already have a pair of long-term investments in star position players on the books. Mike Trout is slated to make a bit north of $37MM annually through 2030, while Anthony Rendon will earn over $38MM per season from 2024 through 2026 under the terms of his backloaded deal. The Angels also owe Raisel Iglesias $16MM in both 2024 and 2025, while David Fletcher will make at least $14MM combined between 2024 and 2025.

Between those commitments, the Angels already have around $100MM guaranteed in the first two seasons of what are currently slated to be Ohtani’s free agent years. Anaheim set a franchise record with an outlay in the $182MM range to start last season. An Ohtani extension would probably require owner Arte Moreno to stretch his longer-term payrolls a bit further if the front office is to have the requisite payroll flexibility to supplement a Trout – Ohtani – Rendon core group.

Shohei Ohtani created plenty of speculation when he recently revealed that there’d been no extension talks with the Angels front office and added that above all else, his priority moving forward is “to win.” With the Angels now officially posting a losing record in six straight seasons, fans and pundits alike have wondered about Ohtani’s future in Anaheim. The likely American League MVP emphasized following the conclusion of the Halos’ 2021 season, however, that he’d carry an open mind into any discussions regarding a long-term extension (link via Jack Harris of the Los Angeles Times).

“I think I would, of course, talk to them with feelings of openness,” Ohtani said via his interpreter. “Regardless of whether that leads to anything, I individually want to have a solid offseason to make sure we can win next year.”

The matter of Ohtani’s contract for the 2022 season is already settled. Back in February, he signed a two-year, $8.5MM contract that covered his first two arbitration seasons (2021 and 2022) — a decision for the Angels surely have to be thankful in retrospect. Ohtani’s outstanding season on both sides of the ball would have surely led to a much larger salary in arbitration than the $5.5MM he’ll receive next year under that two-year pact.

It was a historic season for Ohtani, who tallied 639 plate appearances as a hitter and also logged 130 1/3 innings on the mound. His 46 home runs at the plate were third in all of baseball, trailing only Vladimir Guerrero Jr. and Salvador Perez. Ohtani hit .257/.372/.592 with 46 long balls, 26 doubles, eight triples and 26 steals. He scored 103 runs, plated another 100 and posted the fourth-best walk rate among qualified hitters.

On the mound, his 29.3 percent strikeout rate on the mound was tied for 12th among the 96 pitchers who tossed at least 120 innings, and his 3.18 ERA ranked 22nd. Ohtani’s 8.3 percent walk rate was a half-percent higher than the average starting pitcher but his huge strikeout rate and above-average ground-ball rate (45 percent) helped to make him one of the more effective starting pitchers in the game on a per-inning basis.

If Ohtani proves at all capable of approximating that production in 2022, he’d set himself up for perhaps the most fascinating and complex arbitration case in Major League history. An extension, of course, would preclude that headache for the Angels — but his brilliant 2021 season has also made any potential negotiations as complicated as an arbitration hearing would be.

Ohtani has rather clearly cemented himself as one of the game’s greatest pure talents. He’s two years from free agency, so the first couple seasons of a theoretical extension wouldn’t pay him full market value (although a new deal could theoretically begin next season and replace his $5.5MM salary in favor of a larger sum). Beyond that, the question is just how highly the would-be free agent seasons might be priced. Ohtani’s teammate, Mike Trout, and Yankees right-hander Gerrit Cole received the largest average annual salaries in MLB history, $36MM per season, when signing their respective deals. (While Trout’s contract was technically restructured as a 12-year, $426.5MM deal, that includes the two years and $66.5MM he was already guaranteed at the time of his extension, which paid him $360MM in new money over 10 years — hence the $36MM AAV figure.)

Free-agent seasons that are bought out this far in advance are typically (but not always) discounted to some extent, but the inherent difficulty in assigning a value to Ohtani’s free-agent campaigns is multi-faceted. Not only is he two years from the market, he’s also only had one full, healthy season on the mound. It’s clear that he’s of top-of-the-rotation caliber from a pure talent perspective, but he pitched just 53 1/3 innings combined in his first three MLB seasons (thanks largely to Tommy John surgery).

That lack of durability is an obvious red flag and strike against him. At the same time, if the Angels wait another year to determine whether Ohtani can replicate or exceed that workload on the mound, he’ll only further drive up his price tag — both by proving his durability and moving closer to free agency. There’s also no precedent for a player with this skill set, so his representatives at CAA could argue that any valuations based on comparisons to other players and/or contracts are generally irrelevant.

Stepping back a bit, the Angels’ entire payroll needs to be considered when looking at the prospect of retaining Ohtani on what would presumably be a massive commitment. The Angels will have Justin Upton’s contract come off the books following the 2022 season — which is no small sum given next year’s $28MM salary.

However, the Halos are already paying Trout a $35.45MM salary every year from 2022-30, and they’ll also pay Anthony Rendon $36MM in 2022 before paying him $38MM annually from 2023-26 under his backloaded $245MM contract. Trout and Rendon, like Ohtani, have proven to be MVP-caliber talents at their best. Trout has three MVPs and arguably ought to have more, and Rendon has a pair of top-five finishes, including a third-place finish as recently as 2019. We can’t know precisely what value would be placed on Ohtani’s free-agent seasons — the first of which would be his age-29 campaign — but that an extension would likely mean paying out more than $100MM annually to just three players, at least from 2024-26.

The Angels are a large-market club, but they also haven’t traditionally spent at the same level as other big-market teams like the Dodgers, Giants, Yankees, Red Sox, etc. This year’s $182MM Opening Day payroll was the largest in franchise history, and owner Arte Moreno hasn’t given his front office the green-light on exceeding the luxury tax threshold since way back in 2004 — his first full season as owner after purchasing the club in May 2003.

There’s no way of knowing just yet what will happen to the luxury tax system in the future, as it’ll be a hotly contested topic during ongoing collective bargaining talks between the league and the players association. Whatever alterations do come about will be key factors for Moreno and second-year general manager Perry Minasian to consider in negotiations with Ohtani’s camp, as paying Trout, Rendon and Ohtani on long-term arrangements would make filling out a roster behind that trio all the more difficult.

All of that comes before even considering other needs in the rotation and the absence of proven, cost-controlled starters on a team that has perennial rotation issues. The Angels have a handful of interesting young arms (e.g. Patrick Sandoval, Reid Detmers, Griffin Canning, Jaime Barria), but they’ll likely need to bring in some veteran arms as well. There’s also the matter of a lack of a long-term solution at shortstop and the looming, star-studded crop of free-agent shortstops to consider. It all makes for a fascinating long-term outlook in Anaheim, as should be expected with a talent as unique as Ohtani and a big-market club as starved for a postseason berth as the Angels, who haven’t appeared in a playoff game since 2014.

The original version of this post cited an Associated Press translation of Ohtani’s quote, which indicated he is “very open” to discussing an extension. Our post has since been updated to reflect what we are told is a more accurate but slightly different translation of his response, from the Los Angeles Times, that he would talk to the Angels “with feelings of openness.”