What would happen if MLB got rid of deferrals?

To answer this question we have to understand how current deferrals work. Take Ohtani for example. He gets paid $2M/year during years 1-10 and $68M/year during years 11-20. The dodgers have to set aside $44M/year during year 1 that will grow with compound interest into $68M to be paid out in year 11. Likewise, they set aside another $44M in year 10 that will grow into $68M to be paid out in year 20. They don't pay another dime for Ohtani's contract after year 10. This isn't like a credit card where you pay minimum interest and principal later on.

So what would happen if deferrals were banned? Ohtani could simply choose to get paid $46M/year for 10 years, which is the same for him financially as his current deferred contract.

Then the next question is why do players even choose deferred salaries if it's the same for them financially? It's because they get taxed based on where they are when they get paid. So Ohtani could move to Texas during years 11-20 and not have to pay a dime in California state tax. I would argue that deferred salaries help the players more than it does the team.