Ohtani Watch: Dodgers sign - 700M over 10yrs

[caulfield12]

1 minute ago, flavum said:

I wish the fans could literally go on strike and demand a salary floor and cap in 2027 or the game dies. 

Fans of the Top 8-12 franchises probably wouldn't see that in their interest...as they are the ones annually spending closer to the ceilings and beyond.

It's going to take relocations or mergers...to eliminate non-viable markets whose fans completely lose interest.

Royals and Pirates both went for 20+ year periods with a playoff run and came out the other side...KC getting a new downtown stadium, for example.  A's moving to Vegas.  Biggest remaining issues continue to be in Florida.

[Balta1701]

Bizarre.

So basically it’s a $700 million 20 year deal so the tax number should Come out to $35 mil a year, is that right?

[South Side Hit Men]

22 minutes ago, Dick Allen said:

$68 million a year is deferredL

Sportstrac has $680M of the $700M deferred.

https://www.spotrac.com/mlb/los-angeles-dodgers/shohei-ohtani-24661/

So does CBS Sports:

https://www.cbssports.com/mlb/news/shohei-ohtani-contract-deferrals-drop-annual-salary-to-2-million-on-massive-700-million-dodgers-deal/

Quote

"In an effort to enable the Dodgers to continue spending around stars Ohtani, Mookie Betts and Freddie Freeman, Ohtani agreed to defer all but $2 million of his annual salary — $68 million of his $70 million per year — until after the completion of the contract. The deferred money is to be paid out without interest from 2034 to 2043."

This is going to make the two dozen or so owners who don't give a s%*# about competing even more to b**** about with the "Luxury Tax" avoidance. I love it, love the fact that they stuck this up Jerry's booty hole.

They will need to hook an IV to Jerry to rehydrate him from all the crying he will do over this. Jerry has to pay Yoan $3.9M more this season than the Dodgers have to pay Ohtani total over the next ten seasons.

 

Edited December 11, 2023 by South Side Hit Men

[The Grinder]

22 hours ago, Lip Man 1 said:

As Howard Cosell said many years ago (paraphrasing), 'You beat odds of 100,000-1 to get to the top of your profession, you deserve to collect big...'

It's funny but I never seem to hear people complaining about how much money singers like Taylor Swift or Beyoncé make or how much money an actor will get for a picture. Scarlett Johansson, Robert Downey Jr., Samuel L. Jackson have made an incredible amount of money but no one complains about them....only athletes.  

In defense of athletes, to those who constantly case on them calling them a**holes who do nothing but get arrested and do bad things, I dont have the numbers of all the active players on NFL, MLB, NHL, MLS and NBA but its easily at least 1500. ANd how many do you actually hear that get arrested etc? 1%? Its like plane crashes, you only hear about them when they happen, you never hear about all the successful landings

That being said, I dont discount the bad athletes (kind of like Clevinger) who give the industry a bad name

[South Side Hit Men]

2024 MLB Paychecks:

• $5,500,000.00 Leury Garcia (DFA'd March 2023)
• $2,000,000.00 Shohei Ohtani
• $1,193,248.20 Bobby Bonilla (Retired 2001)

[Balta1701]

16 minutes ago, South Side Hit Men said:

Sportstrac has $680M of the $700M deferred.

https://www.spotrac.com/mlb/los-angeles-dodgers/shohei-ohtani-24661/

So does CBS Sports:

https://www.cbssports.com/mlb/news/shohei-ohtani-contract-deferrals-drop-annual-salary-to-2-million-on-massive-700-million-dodgers-deal/

This is going to make the two dozen or so owners who don't give a s%*# about competing even more to b**** about with the "Luxury Tax" avoidance. I love it, love the fact that they stuck this up Jerry's booty hole.

They will need to hook an IV to Jerry to rehydrate him from all the crying he will do over this. Jerry has to pay Yoan $3.9M more this season than the Dodgers have to pay Ohtani total over the next ten seasons.

 

So tell me if I’m wrong here - the rule used to be that it was total dollars divided by the years paid out. That would make the tax amount here $35 million a year by my accounting. Am I wrong?

[Chicago White Sox]

1 minute ago, Balta1701 said:

So tell me if I’m wrong here - the rule used to be that it was total dollars divided by the years paid out. That would make the tax amount here $35 million a year by my accounting. Am I wrong?

Not years paid, but years of the contract.  My guess is they PV adjust the dollars beyond the contractual period to account for his AAV.

And this is absolutely horrible for baseball.  I think it’s cool as that Shoei wants to win this badly, but from a parity standpoint this is an absolute disaster.

[Chicago White Sox]

$46M per year CBT impact.

[bmags]

I’m not gonna lie. I actually hate this and think they should fix this in a way that fucks over the dodgers retroactively.

[Chicago White Sox]

Just now, bmags said:

I’m not gonna lie. I actually hate this and think they should fix this in a way that fucks over the dodgers retroactively.

100% agree.

[PolishPrince34]

This is so bad for baseball!

[Texsox]

6 minutes ago, bmags said:

I’m not gonna lie. I actually hate this and think they should fix this in a way that fucks over the dodgers retroactively.

Yep. And plug any loopholes. 

[South Side Hit Men]

18 minutes ago, Balta1701 said:

So tell me if I’m wrong here - the rule used to be that it was total dollars divided by the years paid out. That would make the tax amount here $35 million a year by my accounting. Am I wrong?

Per Spotrac it's $46M per year luxury tax implications over each of the next ten years. Guessing it's $24M per year over the ten deferred years if the first part is accurate.

https://www.spotrac.com/mlb/los-angeles-dodgers/shohei-ohtani-24661/

I'm interested in learning the implications to the Dodgers Federal and State taxes in terms of accelerated player depreciation of the $700M. They will likely save nine figures just on tax implications.

In terms of individual taxes, I believe Ohtani is stuck paying both the United States (37%) and California (13.3%) over the ten years of deferred payments, even if he moves back permanently to Japan in the Fall of 2033.

At least he doesn't have to file US taxes after 2043 since he retained his Japanese citizenship and isn't a US citizen. If the Las Vegas Athletics signed him, he would save $93.1M in state income taxes over the life of the contract, even more if California continues to increase their highest personal rate which I can see happening at some point.

Edited December 11, 2023 by South Side Hit Men

[The Grinder]

Watch he gets hurt 3rd game and is out for season

[Chicago White Sox]

2 minutes ago, South Side Hit Men said:

Per Spotrac it's $48M per year luxury tax implications over each of the next ten years. Guessing it's $22M per year over the ten deferred years if the first part is accurate.

https://www.spotrac.com/mlb/los-angeles-dodgers/shohei-ohtani-24661/

I'm interested in learning the implications to the Dodgers Federal and State taxes in terms of accelerated player depreciation of the $700M. They will likely save nine figures just on tax implications.

In terms of individual taxes, I believe Ohtani is stuck paying both the United States (37%) and California (13.3%) over the ten years of deferred payments, even if he moves back permanently to Japan in 2033.

At least he doesn't have to file US taxes after 2043 since he retained his Japanese citizenship and isn't a US citizen. If the Las Vegas Athletics signed him, he would save $93.1M in state income taxes over the life of the contract, even more if California continues to increase their highest personal rate which I can see happening at some point.

There should be no CBT impact outside of the contract period.  They are simply discounting the total dollars of the deal to reflect these deferrals and then are dividing by 10.  This really isn’t a 10/$700M deal for the Dodgers, who make out like bandits both from a CBT and cash flow perspective.

[Flash Tizzle]

12 minutes ago, PolishPrince34 said:

This is so bad for baseball!

What am I missing here? Do we hate it just because the Dodgers were clever enough to create a deal that benefited them in the short run?

[Texsox]

10 minutes ago, South Side Hit Men said:

Per Spotrac it's $46M per year luxury tax implications over each of the next ten years. Guessing it's $24M per year over the ten deferred years if the first part is accurate.

https://www.spotrac.com/mlb/los-angeles-dodgers/shohei-ohtani-24661/

I'm interested in learning the implications to the Dodgers Federal and State taxes in terms of accelerated player depreciation of the $700M. They will likely save nine figures just on tax implications.

In terms of individual taxes, I believe Ohtani is stuck paying both the United States (37%) and California (13.3%) over the ten years of deferred payments, even if he moves back permanently to Japan in the Fall of 2033.

At least he doesn't have to file US taxes after 2043 since he retained his Japanese citizenship and isn't a US citizen. If the Las Vegas Athletics signed him, he would save $93.1M in state income taxes over the life of the contract, even more if California continues to increase their highest personal rate which I can see happening at some point.

I believe he pays taxes in each state based on the number games played  there. It's the "Michael Jordan" rule. 

https://www.thestreet.com/lifestyle/sports/how-michael-jordans-jock-tax-brought-millions-to-state-budgets

[Capn12]

2 minutes ago, Flash Tizzle said:

What am I missing here? Do we hate it just because the Dodgers were clever enough to create a deal that benefited them in the short run?

Agreed. Good organizations find creative ways to make big things happen, poor organizations cry poor and sit on the sidelines.

[CaliSoxFanViaSWside]

19 minutes ago, bmags said:

I’m not gonna lie. I actually hate this and think they should fix this in a way that fucks over the dodgers retroactively.

The Dodgers are smarter than MLB. I think they'd take MLB to court and win if you base it on the fact anything MLB does regarding that issue in the future could be seen as being aimed directly at the Dodgers especially if they try to make it retroactive.

[CWSpalehoseCWS]

I hate this deal. This is not a good look for baseball.

[Chicago White Sox]

MLB should just take the best 26 players, put them on the Dodgers, and then award them an automatic World Series appearance.  At this point, who the f*** cares as all fairness in MLB is out the window when the Dodgers are not only entitled to the best player in the world who comes with numerous marketing advantages, but also don’t have to pay him for 10 years and are allowed to f*** over the CBT system because said unique talent is making so much money he doesn’t care that he’s basically accepting 70 cents on the dollar.

Edited December 12, 2023 by Chicago White Sox

[caulfield12]

15 minutes ago, The Grinder said:

Watch he gets hurt 3rd game and is out for season

Who's going to underwrite the insurance on that one?  Lloyd's of London or a specialty shoppe?

[Chicago White Sox]

7 minutes ago, Flash Tizzle said:

What am I missing here? Do we hate it just because the Dodgers were clever enough to create a deal that benefited them in the short run?

They weren’t clever…the star that wanted to sign with them himself offered to defer 97% of the contract.  And it doesn’t just help them in the short-term, the PV of this is like 30% less as a result of Ohtani’s proposal to do this.  But hey, the rich get richer, which I’m sure casual fans will love.

[caulfield12]

7 minutes ago, Chicago White Sox said:

MLB should just take the best 26 players, put them on the Dodgers, and then award them an automatic World Series appearance.  At this point, who the f*** cares as all fairness in MLB is out the window when the Dodgers are not only entitled to the best player in the world who comes with numerous marketing advantages, but also don’t have to pay him for 10 years and are allowed to f*** over the CBT system because said unique talent is making so much money he doesn’t care that he’s basically accepting 56 cents on the dollar.

But look what happened to most of the favorites in the playoffs this year...

Texas was a WC team.

One could easily argue that teams that get that head start and don't have one full week off are actually at a competitive advantage in most cases...despite the pitching staff getting taxed in series that go the full length of games.

 

And nobody expects the AL Central to do anything anyway...despite the Twins winning their first playoff series in decades.   If anything, more of a wake-up call to the coastal teams and Astros, whose dynasty is slowing coming to an end.  Padres and Mets learned they couldn't spent their way to super teams, etc.  Angels didn't even make the playoffs with Trout and Ohtani, not once.

Edited December 12, 2023 by caulfield12

[Balta1701]

13 minutes ago, Flash Tizzle said:

What am I missing here? Do we hate it just because the Dodgers were clever enough to create a deal that benefited them in the short run?

There's benefit to baseball to having every team legitimately on a level playing field. The Luxury Tax rule was genuinely simple, it made it challenging to find loopholes. I'm still not even sure how this one works, but it's definitely not good for baseball to have Ohtani making $600 million after his contract ends.