When Freddie Freeman signed a six-year deal with the Los Angeles Dodgers, it reshaped the National League West and ended an era in Atlanta. The headline numbers pointed to a massive payday, but the real story lies beneath the surface in the structure of the payments.
The agreement guarantees Freeman $162 million across six seasons, spanning from 2022 through 2027, with an average annual value of $27 million. However, a significant portion of that money was deferred without interest, changing the actual present-day value of the contract for both the player and the franchise's luxury tax calculations.
Total Value and Salary Structure
On paper, the contract averages $27 million per year. Yet, the cash flow distribution differs significantly from standard Major League Baseball contracts. Freeman agreed to defer $57 million total out of the $162 million package.
The deferral breakdown works across two distinct phases of the six-year term:
- 2022–2024: $7 million deferred per year ($21 million total).
- 2025–2027: $12 million deferred per year ($36 million total).
Because of these deferrals, Freeman’s actual take-home salary in real time during the life of the active playing contract is lower than the nominal $27 million average. For instance, his annual cash payout dropped to $15 million in the later years of the deal, while the deferred funds wait for future payout dates.
Deferred Money Payout Schedule
The $57 million in deferred compensation doesn't vanish; it is scheduled to be paid out long after Freeman hangs up his spikes. According to the MLB collective bargaining agreements and contract specifics tracked by Spotrac, the deferred money is slated across thirteen annual installments once his playing days conclude:
- 2028–2035: Eight annual installments of $4 million paid every July 1.
- 2036–2040: Five annual installments of $5 million paid every July 1.
This deferred structure mirrors modern Los Angeles front-office strategies, giving the club immediate financial flexibility to build a championship roster around their core stars while keeping future payroll commitments manageable.
Impact on the Competitive Balance Tax
For the Dodgers, deferred money changes how contracts calculate toward the Competitive Balance Tax, commonly known as the luxury tax. Because MLB calculates the present value of deferred money using discount rates defined by the Major League Baseball Players Association, the actual present-day value of Freeman's contract dropped from $162 million to approximately $148.2 million.
This reduction lowered his annual luxury tax hit to roughly $24.7 million instead of the full $27 million face value. That savings gave the front office extra spending room to pursue other high-profile acquisitions during the 2022–2024 window, directly contributing to deeper postseason runs and World Series titles.
Common Misconceptions About the Deal
Fans often misunderstand how player contracts interact with team payrolls and historical context. Clarifying these points helps paint an accurate picture of the transaction:
- It wasn't the highest offer on the table: Reports during the 2022 free agency scramble suggested other teams, including the Tampa Bay Rays and Toronto Blue Jays, floated competitive or even higher total figures, but Freeman ultimately chose Los Angeles to be closer to his Southern California roots.
- Deferrals don't mean tax evasion: Deferred money is still fully taxable based on where the player resides when the money is actually received, though California state tax laws regarding future residency status add layers of complexity to long-term payouts.
- No opt-outs or player options: The deal is a straightforward, locked-in six-year commitment with no mid-stream opt-outs, giving the Dodgers cost certainty through his age-37 season.
Frequently Asked Questions
What is Freddie Freeman's yearly salary with the Dodgers?
His nominal base salary averages $27 million per year, but after accounting for deferrals, his cash earnings fluctuate between $15 million and $20 million per season during the active life of the contract.
When does Freddie Freeman become a free agent again?
His contract runs through the conclusion of the 2027 MLB season, meaning he is scheduled to hit unrestricted free agency ahead of the 2028 season.
Why did Freddie Freeman agree to defer money?
Deferring $57 million allowed the Dodgers to lower their luxury tax threshold hit and preserve payroll space to sign other star players, maximizing the team's chances of winning multiple championships during his tenure.
How much money is deferred overall?
Out of the $162 million total package, exactly $57 million is deferred, to be paid out in yearly installments stretching from July 2028 through July 2040.
