Dollars and Sense

[BigKen]

If you haven't heard, Ohtani signed a baseball contract (guaranteed) with the LA Dodgers this past weekend. On the surface it's 10 years/ $700M.

That's not the reality. It's actually a twenty year contract where he gets $2M a year for the next ten years and then gets the balance over the next ten at $68M a year.

From all indications, he will purchase a home in Texas or Florida and become a resident of that state in 2033. By doing so, he saves $368M that he would have to pay the state of California in income taxes. It's also team friendly to the Dodgers and keeps them out of the MLB Luxury tax and gives the $40M to pick up another start player or six.

Why couldn't an NFL team write a similar contract? We will pay XXX a 5 year $100M contract but for the next five years he is paid 5M a year and the remainder is deferred to 2050 thru 2055?

The Dodger contract is the first of it's kind ever, but seems like someone in the NFL is going to figure out how they can do the same thing and stay within the Cap. They're doing it now by spreading bonuses over the term of the contract. Why not figure out a way to defer it to the end of a career?

I don't know how pushing money out over an additional ten years can benefit a team. Ohtani is already a billionaire.

Could it be done in the NFL?

 

[sharkymcwrath]

Why couldn't an NFL team write a similar contract? We will pay XXX a 5 year $100M contract but for the next five years he is paid 5M a year and the remainder is deferred to 2050 thru 2055?

Because it should be cheating. It's total bullshit and shouldn't be allowed.

 

[Southieinnc]

If you haven't heard, Ohtani signed a baseball contract (guaranteed) with the LA Dodgers this past weekend. On the surface it's 10 years/ $700M.

That's not the reality. It's actually a twenty year contract where he gets $2M a year for the next ten years and then gets the balance over the next ten at $68M a year.

From all indications, he will purchase a home in Texas or Florida and become a resident of that state in 2033. By doing so, he saves $368M that he would have to pay the state of California in income taxes. It's also team friendly to the Dodgers and keeps them out of the MLB Luxury tax and gives the $40M to pick up another start player or six.

Why couldn't an NFL team write a similar contract? We will pay XXX a 5 year $100M contract but for the next five years he is paid 5M a year and the remainder is deferred to 2050 thru 2055?

The Dodger contract is the first of it's kind ever, but seems like someone in the NFL is going to figure out how they can do the same thing and stay within the Cap. They're doing it now by spreading bonuses over the term of the contract. Why not figure out a way to defer it to the end of a career?

I don't know how pushing money out over an additional ten years can benefit a team. Ohtani is already a billionaire.

Could it be done in the NFL?

As a California worker, you will pay taxes in Ca.
Wierd contracts are "acceptable" in MLB but in the NFL, all contracts must be signed off by the NFL.
To this date, the NFL resists all Hijinks contracts. You can get away with quite a bit
But not that much!

Note: If I am the agent, I would not want to delay that much compensation - especially for that long.
What if your client (player) gets into some trouble and after years of getting paid a "low" salary - you get nothing further?

 

[nefansince75]

If you haven't heard, Ohtani signed a baseball contract (guaranteed) with the LA Dodgers this past weekend. On the surface it's 10 years/ $700M.

That's not the reality. It's actually a twenty year contract where he gets $2M a year for the next ten years and then gets the balance over the next ten at $68M a year.

From all indications, he will purchase a home in Texas or Florida and become a resident of that state in 2033. By doing so, he saves $368M that he would have to pay the state of California in income taxes. It's also team friendly to the Dodgers and keeps them out of the MLB Luxury tax and gives the $40M to pick up another start player or six.

Why couldn't an NFL team write a similar contract? We will pay XXX a 5 year $100M contract but for the next five years he is paid 5M a year and the remainder is deferred to 2050 thru 2055?

The Dodger contract is the first of it's kind ever, but seems like someone in the NFL is going to figure out how they can do the same thing and stay within the Cap. They're doing it now by spreading bonuses over the term of the contract. Why not figure out a way to defer it to the end of a career?

I don't know how pushing money out over an additional ten years can benefit a team. Ohtani is already a billionaire.

Could it be done in the NFL?

The moment the player was dropped from the roster the remainder of the contract would hit that moments salary cap. Basically the entire contract would hit the season after the player's last.

 

[Debbie Does]

I thought a lot of huge sports contracts were taxed by the state in which the game is played, plus federal taxes. NFL teams are payed once for each regular season game. That sorta sucks for players in high-tax states but it's nice for players in low-tax states.

Because it should be cheating. It's total bullshit and shouldn't be allowed.

If the tax code allows it, it's not cheating unless the league prohibits it.

 

[sharkymcwrath]

I thought a lot of huge sports contracts were taxed by the state in which the game is played, plus federal taxes. NFL teams are payed once for each regular season game. That sorta sucks for players in high-tax states but it's nice for players in low-tax states.

If the tax code allows it, it's not cheating unless the league prohibits it.

What I'm saying is it SHOULD be cheating. The Dodgers get a 68 million dollar per year advantage over the rest of the league. I guess everybody will start doing this shit.

Baseball needs a salary cap IMO. And this deferred money is total bullshit.

By the time the Dodgers actually have to start paying Ohtani the 68 milly per, 68 milly will not be nearly what it is today.

 

[molsaniceman]

What I'm saying is it SHOULD be cheating. The Dodgers get a 68 million dollar per year advantage over the rest of the league. I guess everybody will start doing this shit.

Baseball needs a salary cap IMO. And this deferred money is total bullshit.

By the time the Dodgers actually have to start paying Ohtani the 68 milly per, 68 milly will not be nearly what it is today.

Its in the CBA they can do this
NFLs CBA is totally different

 

[Debbie Does]

By the time the Dodgers actually have to start paying Ohtani the 68 milly per, 68 milly will not be nearly what it is today.

Given the inflation rate, Dodgers management must be cheering for Biden.

 

[BigKen]

Like I said, I don't know the contract rules in any professional sport.

I can see how this could throw a wrench into the NFL Salary Cap if some agent or lawyer or CPA figure a way to pull this off.

None the less, at some point the bill has to be paid and somewhere down line this type of contract wil take a huge chunk out of a team's ass.

 

[NWPATSFAN]

As a California worker, you will pay taxes in Ca.
Wierd contracts are "acceptable" in MLB but in the NFL, all contracts must be signed off by the NFL.
To this date, the NFL resists all Hijinks contracts. You can get away with quite a bit
But not that much!

Note: If I am the agent, I would not want to delay that much compensation - especially for that long.
What if your client (player) gets into some trouble and after years of getting paid a "low" salary - you get nothing further?

Yep, not quite sure if I could get by on a measily 2M for the next 20 years, lol

 

[sharkymcwrath]

Like I said, I don't know the contract rules in any professional sport.

I can see how this could throw a wrench into the NFL Salary Cap if some agent or lawyer or CPA figure a way to pull this off.

None the less, at some point the bill has to be paid and somewhere down line this type of contract wil take a huge chunk out of a team's ass.

Frankly, I thought the Brady home town discount was a little bit cheaty in that we got the best QB in the league for considerably less than an average shmuck was getting somewhere else. But at least Brady agreed to less money and it wasn’t deferred. The Ohtani deal reeks. And the Dodgers are my second favorite team. I’m gonna have a hard time rooting for them.

 

[NWPATSFAN]

Like I said, I don't know the contract rules in any professional sport.

I can see how this could throw a wrench into the NFL Salary Cap if some agent or lawyer or CPA figure a way to pull this off.

None the less, at some point the bill has to be paid and somewhere down line this type of contract wil take a huge chunk out of a team's ass.

There is the luxury tax that allows it. No big deal to a billionaire. So yeah it is cheating the system. They'll make up the difference in Dodger Dogs.