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Details of Yoshinobu Yamamoto’s $325 million contract with Dodgers

MLB: Yoshinobu Yamamoto Dodgers Introduction Wally Skalij / Los Angeles Times via Getty Images

The Dodgers officially finalized their contract with star pitcher Yoshinobu Yamamoto on December 27, concluding a whirlwind final month of 2023 that included three big-ticket additions and over $1.1 billion in future salary commitments.

Yamamoto’s pact with the Dodgers is 12 years and $325 million, the longest and most lucrative contract for a pitcher in major league history. The right-hander reached free agency at the perfect time, with nearly all the highest-spending teams vying for his services, coupled with being only 25 years old and coming off three consecutive Japanese Pacific League MVP awards and three straight Eiji Sawamura Awards as the league’s best starting pitcher.

Unlike new teammate Shohei Ohtani’s mega-contract with the Dodgers, Yamamoto’s deal contains no deferred money, and he gets a $50 million signing bonus, all paid in 2024, per Ronald Blum of the Associated Press, who also has details on the annual salaries in the deal:

2024: $5 million
2025: $10 million
2026: $12 million
2027: $26 million
2028: $26 million
2029: $26 million
2030: $29 million
2031: $29 million
2032: $28 million
2033: $28 million
2034: $28 million
2035: $28 million

Yamamoto has two chances to opt out of the contract and into free agency, but when those chances come depend on the health of the right-hander’s elbow. More from Blum:

If Yamamoto has Tommy John surgery or is on the injured list for a right elbow injury for 134 consecutive service days from 2024-29, he would have the right to opt out after the 2031 and 2033 World Series, according to terms of the deal obtained by The Associated Press on Tuesday. If he avoids Tommy John surgery and doesn’t miss that much time with an elbow issue during that window, he can instead opt out after the 2029 and 2031 World Series.

In the first scenario, the Dodgers also would gain a $10 million conditional option for 2036 with no buyout.

Jon Heyman at the New York Post added that an internal brace elbow surgery from 2024-29 would also trigger the later opt-out dates.

Through 2029, his earliest possible opt-out chance, Yamamoto will have earned $155 million over six years, including the signing bonus. To put that in perspective, that’s the same as Jon Lester’s contract with the Cubs from 2014-2019, in which Lester was ages 31-36. Yamamoto’s first six years are his age-25-30 campaigns.

Should Yamamoto opt out after the 2029 season, he’d forgo the final six years and $170 million. That would put him on the market entering his age-31 season, the same situation Blake Snell and Aaron Nola were this offseason. Nola signed a seven-year, $172 million deal to remain with the Phillies. Snell is still unsigned but will likely earn more than that after winning his second Cy Young Award.

Through 2031, Yamamoto will have earned $213 million over eight years, with four years and $112 million remaining on the deal entering his age-33 season.

Ohtani still has the only no-trade clause on the Dodgers. Yamamoto doesn’t have a no-trade clause but, per Blum, can opt out of his contract at the end of any season in which he is traded. Despite the lack of major league service time, Yamamoto cannot be optioned to the minors without his consent, which is fairly common among foreign professionals with any sort of track record.

Hiroki Kuroda had such a clause in his initial contract with the Dodgers in 2008, as did Hyun-jin Ryu in 2013.

When figuring payroll for competitive balance tax purposes, the average annual value of Yamamoto’s $325 contract comes to $27,083,333 over the life of the contract.

The additions of Yamamoto, Ohtani ($46.08 million toward CBT payroll), Tyler Glasnow ($27.3 million), and Teoscar Hernández (~$20.5 million, depending on how the deferrals are counted) give the Dodgers 16 players under contract for 2024, plus 10 more eligible for salary arbitration. Factoring in arbitration projections, salaries for the remainder of the roster, and various benefits, the Dodgers payroll this season for competitive balance tax purposes is estimated at $300.9 million.

That would put the Dodgers over the fourth tax threshold of $297 million, which comes with $41 million in tax on the first $60 million over the initial $237 million threshold, plus a 110-percent tax on anything over $297 million. The Dodgers paid $19.4 million in competitive balance tax in 2023, their third straight year of paying the tax.

What doesn’t count against the competitive balance tax, yet is a cost all the same, is the $50.625 million fee the Dodgers owe to the Orix Buffaloes for posting Yamamoto.