Good morning, I’m Dan Gartland. I guess it shouldn’t come as a surprise that MLB’s richest owner handed out the biggest contract in the sport’s history.
In today’s SI:AM:
💰 Soto bets on himself
🤑 Cohen gets what he wants
💵 Time for Mets to go all-in
An eye-popping dollar amount
Juan Soto banged the gavel on the biggest free-agent auction in MLB history on Sunday, agreeing to sign with the New York Mets on a 15-year, $765 million contract that makes him the highest-paid player in the history of the sport. Here are the biggest things to know about this historic contract.
A record-breaking deal
Soto’s contract is both the largest and the longest in MLB history. The previous record for contract length was the 14-year deal Fernando Tatis Jr. signed with the San Diego Padres in 2021, and the previous record for contract value was $700 million, set by Shohei Ohtani last winter when he signed with the Los Angeles Dodgers.
How the deal compares to others in different sports
Soto’s contract isn’t just the biggest in MLB history, it’s the largest contract for any athlete anywhere in the world. The next biggest, non-baseball contract is Lionel Messi’s $674 million deal with Barcelona that he signed in 2017. But that was only a four-year deal, so Messi’s $168.5 million annual value dwarfs the $51 million annual value of Soto’s pact. A couple of other soccer players have gotten deals with even larger annual price tags. Karim Benzema and Cristiano Ronaldo signed contracts last year with Saudi clubs that pay them $224 million and $215 million annually, respectively.
A handful of athletes in American sports also have AAVs higher than Soto, including the Boston Celtics’ Jayson Tatum ($62.8 million) and the Milwaukee Bucks’ Giannis Antetokounmpo ($62 million), but Tatum’s record-setting total contract value of $314 million is less than half of what Soto is set to be paid.
No deferred money
Soto’s contract is especially enormous because it doesn’t include any deferred money. While the Dodgers have lowered the upfront cost of some of their big free-agent acquisitions (like Ohtani and Blake Snell) by deferring significant amounts of players’ salary until years down the line, Soto’s deal with the Mets does not feature any deferrals. He’s guaranteed $51 million every year over the next 15 years. Plain and simple. (Well, mostly. More on that in a bit.)
Soto got way more money than Ohtani
While Soto’s deal may seem similar to Ohtani’s based just on the headline dollar amount ($765 million over 15 years vs. $700 million over 10 years), the lack of deferrals means Soto blew Ohtani out of the water.
To recap, Ohtani is only being paid $2 million per year by the Dodgers over the course of his 10-year contract. The remaining $680 million will be paid out in the 10 years after the contract expires. We don’t have to delve too deeply into the economic principle known as the “time value of money,” but it isn’t terribly difficult to understand why getting paid earlier is more desirable than getting paid later. For that reason, the present value of Ohtani’s contract is much lower than the $700 million price tag. MLB calculated the present value of the contract at $460 million for luxury tax purposes, while the MLB players union put the number at $438 million. Either way you calculate it, Soto’s contract has a true value of about $300 million more than Ohtani’s.
Full value could exceed $800 million
But wait, there’s more. Soto could end up earning more than $800 million from the Mets. That’s because the contract also includes an opt-out clause after the fifth year. Soto can opt out of the deal when he’s 31 and test the free-agent market again, but the Mets can also nullify the opt-out by increasing Soto’s annual salary.
Here’s how it works: Soto will be paid $305 million over the first five years of the contract. That includes a $75 million signing bonus and an annual salary of $46 million. If he doesn’t opt out, he’ll get $460 million over the remaining 10 years. But if he opts out, the Mets have the ability to prevent him from hitting the open market by increasing his annual salary to $50 million over the remaining 10 years, bringing the total value of his contract to $805 million.
What other teams offered
Soto reportedly considered four other teams before agreeing to terms with the Mets: the New York Yankees, Los Angeles Dodgers, Boston Red Sox and Toronto Blue Jays. Only the terms of the Yankees’ offer to Soto have leaked at this time. According to Jon Heyman of the New York Post, the Yankees offered Soto $760 million over 16 years to stay in the Bronx. That wasn’t enough to keep Soto from making the move across the East River to Queens.
The best of Sports Illustrated
- Juan Soto’s decision to turn down $440 million from the Nationals in 2022 raised plenty of eyebrows, but as Stephanie Apstein writes, his decision to bet on himself then has paid off handsomely.
- On the other side of the Soto deal is Mets owner Steve Cohen. Tom Verducci writes that the signing is just the latest example of Cohen using his tremendous wealth to get what he wants.
- Ryan Phillips believes the Soto deal puts pressure on the Mets to keep building an even more powerful team.
- Will Laws, Emma Baccellieri and Nick Selbe also gave their initial reactions to the Soto deal.
- Pat Forde explains why the College Football Playoff committee made the right choice in picking SMU over Alabama.
- Here are Forde and Bryan Fischer’s picks for the newly released CFP bracket.
- The Rams’ shootout win over the Bills shows that they’re capable of giving someone a scare in the playoffs, Albert Breer writes.
- Gilberto Manzano also wrote about how dangerous the Rams are, how Kyler Murray is sinking the Cardinals and why the Vikings need to extend Sam Darnold.
- Another lousy start from Kirk Cousins had people calling for Michael Penix to take over for the Falcons, but Conor Orr thinks that won’t fix Atlanta’s problems.
The top five…
… things I saw yesterday:
This article was originally published on www.si.com as SI:AM | What to Know About Juan Soto’s Record-Setting Contract With the Mets.
