Shohei the Money (Follow-Up): How Much Better Off Would Ohtani Be Now?

To recap, Ohtani’s 10-year contract structured payments of $2 million per year for a decade, followed by an annual payment of $68 million starting in 2034 for another 10 years. This delayed payout structure was designed to provide financial stability later in his life as well as help the Dodgers stay within salary caps.

At the time of the original article, the price of gold hovered at around $2,000 per ounce. And we asked: ‘what if Ohtani received one year’s worth of his $68 million annual payout in gold coins?’. At $2,000 per ounce, Ohtani would have received 34,000 ounces of gold.

Here’s where things get interesting…

A glimpse into the future

Fast forward to today, and the price of gold has soared to over $2,600 per ounce. If Ohtani had indeed chosen to receive those 34,000 ounces of gold back in December 2023, the value of that gold would have skyrocketed by now. Instead of being worth $68 million, those same 34,000 ounces would now be valued at $88.4 million, a rise of 30%.

That is a $20.4 million increase in less than a year. Ohtani, simply by choosing gold over fiat currency, would now be $20.4 million richer today for just one of his ten future payments (let that sink in).

The gold standard argument

This massive increase shows why many people choose to hold physical gold. Unlike fiat currencies like the US dollar, gold has held its purchasing power over the long-term. In fact, the classic narrative is that an ounce of gold in Roman times could buy you a high-quality toga and sandals—just as it could buy you a modern suit in Savile Row today.

As we mentioned in the original article, the purchasing power of the US dollar has eroded by about 98% since the USA abandoned the gold standard in 1971. This is why some, like Ohtani’s advisors, have chosen long-term financial deals that can preserve value over time—although their strategy focused more on delaying cash payouts rather than gold. But imagine if they had taken it one step further and offered him gold instead.

What does this mean for Shohei Ohtani?

If Ohtani had chosen to receive his annual payment in gold coins, and the price of gold continued to rise, every year's payout could be worth significantly more than the original $68 million.

In today’s economic climate of inflation concerns and currency fluctuations, Ohtani’s theoretical gold payout is a good example of the true value of precious metals. It could have provided him with protection against inflation and also capitalised on gold’s potential appreciation.

So, what is the takeaway? If Ohtani had chosen to book those 34,000 ounces of gold for just one year of his future payments, he would be $20.4 million richer today. And that is just the beginning—we have no way of predicting just how much more that gold could gain in value over the next decade.

One thing is certain: gold continues to prove its timeless value time and time again. As the sports world pays out ever-growing sums of money, maybe more athletes should be asking themselves this question: why not gold?

Watch this space as we continue to follow this story in the years to come.