Angels, Shohei Ohtani avoid arbitration with 2-year, $8.5 million deal

The Angels avoided salary arbitration with Shohei Ohtani on Monday, signing him to a two-year, $8.5 million contract with plans for him to contribute as a two-way player going forward.

Ohtani was the only Angels player eligible for arbitration not to reach agreement on a 2021 contract by the January 15 exchange date. Ohtani filed at $3.3 million while the Angels filed at $2.5 million. This year, Ohtani will earn $3 million in 2021 — slightly above the $2.9 million midpoint — per Jeff Fletcher of the Orange County Register and Fabian Ardaya of The Athletic, then $5.5 million in 2022. Othani, who has three years of major league service time, will have one more year of arbitration eligibility in 2023.

Thirteen players across MLB exchanged salaries with teams on Jan. 15, and three hearings were held last week, per the Associated Press. Ji-Man Choi won his hearing with the Rays, while the Mets’ J.D. Davis and Orioles Anthony Santander lost their hearings. Astros shortstop agreed to a one-year, $11.7 million contract over the weekend, avoiding a potential hearing.

General manager Perry Minasian on a conference call Wednesday said as a “file and go” team, once Ohtani and the team exchanged salary figures the Angels planned to go to a hearing to let an arbitration panel decide Ohtani’s 2021 salary, but changed course after discussions of a multi-year contract with Nez Balelo, Ohtani’s agent.

“We felt comfortable taking a risk on a multi-year [deal]. We feel like locking Shohei in, for where he’s at this offseason with the amount of work put into it, he’s in a really good place mentally and physically,” Minasian said. “I’m excited to see him in spring training.”

Ohtani struggled at the plate in the truncated 2020 season, hitting just .190/.291/.366 with seven home runs in 44 games, after hitting .286/.351/.532 in his first two major league years. Tommy John surgery wiped out Ohtani’s 2019 season on the mound, and his pitching in 2020 was limited to two disastrous outings that saw him retire only five of his 16 batters faced.

He was shutdown from pitching in early August with a grade 1-2 strain of the flexor pronator mass in his right elbow, and didn’t pitch again the rest of the year. Minasian said the Angels plan to continue using Ohtani as a two-way player.

“We feel like he can help the team in both categories — on the mound, and in the batters box. He’s going to have opportunity to do that,” Minasian said. “For him, from where he’s at this offseason, he’s been working hard at both sides, not only pitching but his hitting also, I think he’s excited for the opportunity.”

With Ohtani in the fold, the Angels have 17 players under contract for 2021 for $167.025 million. Since his contract is for two years, the average annual value ($4.25 million) counts for competitive balance tax purposes.

Factoring in rounding out the active roster, plus salaries for minor leaguers on the 40-man roster and benefits, the team payroll for competitive balance tax purposes is estimated at $191.2 million per Cot’s Baseball Contracts and $193.1 million per Roster Resource at FanGraphs. The threshold for 2021 is $210 million, after which the Angels would pay a 20-percent tax on the first $20 million of overage.