Blake Snell to Dodgers: 5 years, $182 million
- Thread starter RedOctober3829
- Start date
And yes. This includes “some” deferrals
View: https://twitter.com/FabianArdaya/status/1861621801966768442
View: https://twitter.com/FabianArdaya/status/1861621801966768442
Makes sense. Everything I've ever been told is that he refused to play anywhere other than the West Coast.
And the corpse of Clay Kershaw will probably give it one last try. Not a bad fifth/sixth starter.
I really hope the next CBA really fucks the Dodgers hard by a) making any deferred money count towards the luxury tax now, and b) raising the tax penalty on those contracts to like 300%.
Deferred $ counts towards the luxury tax now.
Ohtani's 10 year 700M nearly all deferred contract is really worth 10/460M. The luxury tax hit it 46M per year, starting now, as it should be.
Snell's contract is not going to be worth 5/182 per reports. If the deferred $ makes is really worth 5/150 in present day value, his luxury tax # will be 30M per year. No one is cheating anything, players can take whatever deferred $ they want if it makes them feel better.
Luxury tax is based on how much the contract is actually worth.
Why? Any team can do what the Dodgers are doing now. It’s not like the deferrals are giving them an unfair advantage.
. The advantage the Dodgers have is they can easily afford to pay the luxury tax due to the amount of money they have behind them and the amount they are raking in.
That shows a fundamental misunderstanding of what deferred $ is.
Why would something worth 46M be taxed as if its worth 70M?
Ohtani signed a 10/460M contract. Thats it. The sooner people realize the 700M number is entirely meaningless, the better off everyone will be.
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I don't really get the signing bonus, dont' think it affects anything for luxury tax line.
Snell I guess wants a lot of his bag now? Going to live it up in LA?
EDIT: I'm reading signing bonuses count as what the luxury tax dollars would be at the end of the contract?
EDIT2: Might be more about avoiding CA state taxes
Snell I guess wants a lot of his bag now? Going to live it up in LA?
EDIT: I'm reading signing bonuses count as what the luxury tax dollars would be at the end of the contract?
EDIT2: Might be more about avoiding CA state taxes
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If it's heavy on deferrals and he won't start seeing the bulk of the contract for a decade I could see the appeal.
Yeah, I think that’s the trade off. Give me more upfront and I’ll let you defer a decent chunk on the back end.
Because it circumvents the rules in place. I'm so fucking sick of the "it's technically accurate" beurocratic bullshit. If someone gets paid 50M over 5 years, it's fucking 10M a year for the next 5 years. Lawyers and agents can suck my ass.
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LA is sunny year-round, Boston isn't. Some people prefer that, others prefer the seasons. Once the money gets to a certain level, where someone wants to spend their prime years matters more than the money. What's the point of having hundreds of millions of dollars if you live in some place that makes you miserable? No rational person would choose that. Basically, get over yourself if you want to whine about people signing in LA for the weather or staying on the West Coast, or Texas for the tax advantages, or someplace else because they want to be close to family or their favorite hunting/fishing areas or whatever. Different people have different priorities. Such is life.
If Soto takes the Sox money over similar offers from both NY teams because of how the city embraced Papi and Pedro, no one here is going to cry about our team exploiting its unfair advantage...except maybe those in the MFY forum.
If Soto takes the Sox money over similar offers from both NY teams because of how the city embraced Papi and Pedro, no one here is going to cry about our team exploiting its unfair advantage...except maybe those in the MFY forum.
Just looking at BRef and was kinda shocked to see that Snell has the highest K/9 rate of all time at 11.2, just ahead of Chris Sale. Of course, Snell has almost double the walk rate of Sale.
Walk rate or no walk rate, Blake Snell is one of the best starting pitchers in baseball. The problem is that he can't be counted on to pitch very much. The only two years of his career where he's gone more than 130 innings, he won the CYA (2018, 2023). Every other year, the most he's pitched has been 129.1 ip. And he'll be 32 next week so it's not like he's expected to get more durable.
I dont understand why people are getting mad at the Dodgers. They are being financially creative in finding ways *fully within the rules* to compete for and pay top free agents in the market. They aren't using any alchemy that isn't available to all other clubs. They do have an advantage of geography but money can solve that too. It turns out that signing Othani created some extra little tailwinds.
All teams can spend top dollar on free agents and can structure deferrals (simple time value of money). Some just choose not to, throw up their hands and say "what can you do?". Fans wouldn't accept that from the athletes they follow but they clearly are ok with it if its the owners.
All teams can spend top dollar on free agents and can structure deferrals (simple time value of money). Some just choose not to, throw up their hands and say "what can you do?". Fans wouldn't accept that from the athletes they follow but they clearly are ok with it if its the owners.
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Are people really mad at the Dodgers, or MLB? Seems like the latter to me. I think people are frustrated that it's the Dodgers again, but not specifically mad at the team.
Would Juan Soto be looking for $700 million if Shohei hadn't just signed for what was reported as $700 million? The higher number is extremely important to agents looking to shift the window of plausible contracts.
Does anyone have a link to a good summary (or even explanation) of the deferral rules? Specifically as to how it affects the CBT? Based on this thread, there is some stuff being thrown around that I find a bit difficult to believe.
Ohtani is making $460M for work performed in the state of CA, but since he deferred 97% of it, only 3% of $700M is actually taxable in CA (assuming he moves out after the contract is over / before the deferred $ is paid, which why wouldn't he do). So only $21M taxable - CA is getting almost zero.
This is obviously pretty bad for CA state tax collection, which is used to do things like fund roads and infrastructure that Ohtani uses when he brings hundreds of thousands of fans to a stadium. Ohtani is benefitting heavily from that infrastructure - it created the economic value that in part made his giant contract possible in the first place.
I'm not sure what recourse they have, but it's pretty obvious that discouraging extremely lucrative tax dodges is in their interest.
It's misplaced annoyance. It's easier to be angry at the Dodgers then it is to be angry at John Henry and company.
The Sox used to be at the forefront of big contracts and finding creative ways of fitting in players. Now the company line is "financial flexibility". Hopefully that changes this winter and we can hang at the adults' table again.
After the Ohtani deal there was pressure from CA state lawmakers to limit deferred pay, cause under current rules Ohtani's deferred deal kicking in 10 years after his actual employment means he could just leave CA and the state would lose 90m in tax revenue.
It's a federal law though so given current/future occupants of the house change seems extremely unlikely.
https://www.nytimes.com/athletic/5406619/2024/04/10/shohei-ohtani-tax-loophole-legislation?source=user-shared-article
And here's the bill that was written (which basically amounts to "help us congress, you're our only hope"):
https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240SJR14
And here's the bill that was written (which basically amounts to "help us congress, you're our only hope"):
https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202320240SJR14
Every team that's in the running would give Juan Soto the Ohtani contract--if it included the deferred money.
When you have obscene income tax rates you're going to have creative avoidance schemes (see Dwight Eisenhower and the Beatles for earlier examples). Perhaps making the rates less obscene would be wise.
I don't really understand cheering on a mutual tax avoidance scheme (Dodgers reduce luxury tax burden, Ohtani avoids state taxes) that can only be afforded by those rich enough to not need the vast majority of their income. The cost is ultimately is being borne by average CA state taxpayers.
This 10/$460M contract is worth potentially significantly more to Ohtani than a non-deferred 10/$500M contract, because he's just not paying taxes where he works, despite using the infrastructure that taxes fund. The Dodgers and Ohtani benefit, everyone else loses.
Ohtani may even be able to avoid significant federal taxes if he moves back to Japan before the deferred income is paid, although maybe some tax treaty between Japan and US means the US still recovers it. Not sure.
This 10/$460M contract is worth potentially significantly more to Ohtani than a non-deferred 10/$500M contract, because he's just not paying taxes where he works, despite using the infrastructure that taxes fund. The Dodgers and Ohtani benefit, everyone else loses.
Ohtani may even be able to avoid significant federal taxes if he moves back to Japan before the deferred income is paid, although maybe some tax treaty between Japan and US means the US still recovers it. Not sure.
If you're going to dodge taxes, the same incentives exist even if the rates are lower. Better to close the loophole than hope that lowering tax rates across the board (to some level that may not fund services for those less rich than Ohtani) causes companies to feel bad about it and stop using the loophole. Ultimately that's a state governance and tax policy discussion, not a baseball one.
Not necessarily. If rates are lower then having the money upfront (rather than in ten years) may be the better financial decision even factoring income tax.
This of course is a separate issue from Dodgers luxury tax benefit.
I have no idea, but optics have nothing to do with how much a contract is worth or how much it should be taxed.
If I signed a 1 year, 1 million dollar contract tomorrow that stated I would get nothing now but a 1M payment in 2050, that wouldn't be worth close to 1M in 2024. Someone can do the math with todays interest rates but it certainly would be worth substantially less than a million bucks.
I understand the tax and California thing . I thought the comment suggested the state would get involved in MLB rules, which was a misread on my part.