Shohei Ohtani was the most sought-after free agent in all of baseball this off-season. Based on his career so far in his native Japan, the 23-year-old star, who signed on Friday with the Los Angeles Angels of Anaheim, may turn out to be the first player since Babe Ruth who can both pitch and hit at a major-league level—a possibility that led Robert O’Connell to write in The Atlantic that Ohtani might be revolutionary not for his new team, but for baseball as a sport.

Ohtani is so promising that scouts estimate he would be worth more than $200 million, cumulatively, between now and the time he’s 30. The Angels, though, signed Ohtani at a bargain rate—the league-minimum salary of $545,000 per year, plus a one-time signing bonus of $2.3 million. If he’s such a valuable player, why is he making the lowest the league is allowed to pay?

Under Major League Baseball’s collective-bargaining agreement, or CBA, an incoming international player under the age of 25 like Ohtani can only sign for the league minimum salary; he’s now committed to the Angels for six years at that rate (unless they trade him, a decision in which he will have no say). Until this year, the CBA permitted teams to offer large signing bonuses that would make up at least part of the difference between a player’s salary and his actual value. Unfortunately for Ohtani, though, a provision in the new CBA ratified earlier this year severely limited those signing bonuses for international players; the $2.3 million the Angels offered was among the largest put forward by any team. (For added irony, the Angels will be paying Ohtani’s former team in Japan, the Nippon Ham Fighters, $20 million just for allowing him play in the U.S.)

Even Ohtani’s current contract is an impressive amount of money to make playing baseball, and there’s been no indication that he is unhappy with his lot. Still, that Ohtani will be making so little while potentially redefining baseball reveals one of the biggest paradoxes in American pro sports: Though they may look meritocratic, leagues dramatically underpay their talent, to the great benefit of league front offices and teams’ owners, who do far less than the players to influence the on-the-field outcomes fans pay to see.

Ohtani’s massively deflated contract is an especially extreme example of this trend. Under the CBA, any international player who enters the majors or minors under age 25 gets the same basic deal, as do American players who enter through the draft. Ironically, says David Berri, a sports economist at Southern Utah University, the initial goal of that standardized contract was to spark bidding wars and increase the salaries of star players. In 1974, an arbitration ruling struck down the “reserve clause,” which allowed teams to hold onto their players indefinitely and prevent the players from negotiating with other teams. “What basically was facing baseball [at that time] was, every player was going to become a free agent, so the market was going to be flooded with free-agent talent,” Berri says, which would have driven down players’ salaries. Berri went on, “But Marvin Miller, the head of the union in baseball, suggested, ‘Why don’t we have it be that you can only become a free agent after six years?’ That way, in any given year you’d only have a few free agents, and their price would be elevated.” By staggering when players became free agents, Berri says, the union ensured that “baseball salaries went up dramatically, and star players got paid a ton of money.”

But in the last 20 years, Berri says, owners have found a way to exploit this arrangement. As statistical analyses have started to show, hitters tend to peak in those first six years under team control, then steadily decline beginning at age 26 or 27. The aging curve is even harder on pitchers, who typically see their velocity start to decline the moment they make the majors. Increasing recognition of these trends, coupled with the prevalence of young superstars like Mike Trout, Bryce Harper, and Francisco Lindor, means that the demand for older players—and in baseball, “older” means “30 and up”—has begun to shrink.