Juan Soto has reached his much-anticipated free-agent decision, agreeing to terms with the New York Mets on a 15-year contract worth $765 million. Soto’s contract becomes the largest in Major League Baseball history, dethroning the agreement Shohei Ohtani signed just a year ago with the Los Angeles Dodgers.
The rise of interest in sports business since the publication of “Moneyball” means, in part, that contract structures get scrutinized as much as lineups or in-game decisions. With that in mind, we here at CBS Sports wanted to honor the moment by breaking down four notable aspects of Soto’s reported agreement with the Mets.
Let’s get to it.
1. There’s no deferred money
The defining characteristic of Ohtani’s 10-year, $700 million pact with the Dodgers was the absurd amount of deferred money — all but $2 million per season. As a result of that structure and the time value of money, Ohtani’s deal had a present value of $437,830,563, according to the MLB Players Association’s calculations.
No formula is needed for Soto’s agreement.
That’s because this deal contains no deferred money, according to MLB’s Mark Feinsand. In other words, this isn’t a case where Soto signed for $765 million but his “actual” contract is along the lines of being worth $450 million (or whatever figure).
2. Opt out opportunity after 2029 season
Although Soto signed for 15 years, or what appeared to be the rest of his career, he’ll actually hold the power to bail a third of the way through. Indeed, his pact includes an opt-out clause after five seasons, according to The Athletic’s Will Sammon.
The ramifications of that opt-out are straightforward and commonplace in most of agent Scott Boras’ megadeals. Soto can, at that point, evaluate if there’s a better deal to be had in free agency — or, perhaps more likely, a better deal to be negotiated with the Mets using the opt-out clause as leverage. The structure of the deal is frontloaded:
The Mets, for their part, can void Soto’s opt-out by increasing his AAV over the remaining 10 years from $51 million to $55 million — that’s an additional $40 million, according to The Athletic’s Ken Rosenthal.
Keep in mind, Soto’s opt-out will fall after MLB and the MLBPA reach terms on a new Collective Bargaining Agreement, meaning the league’s landscape could look different than it does at present.
3. Massive signing bonus
Soto isn’t just getting paid a ton overall, he’s getting $75 million in the form of a signing bonus, according to Feinsand.
The payment schedule hasn’t been reported, but it should be noted that Soto won’t necessarily receive that $75 million all at once. Mookie Betts’ deal with the Dodgers included a $65 million signing bonus paid in increments every Nov. 1. Conversely, Blake Snell will receive a $52 million signing bonus from the Dodgers in January.
We’ll see which path Soto’s bonus takes, but let’s be clear about something: it’ll still count for Competitive Balance Tax purposes. Nevertheless, it does make for a nice sweetener for players who are cognizant of the time value of money.
