Would people rather the offer be 6/96 or 7/105? Is it likely Panda will be worth $9M for that 7th year? (I think so.)
The future at 3rd
- Thread starter MakMan44
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Like a lot of people on this board, I see 3B and LH as immediate needs that Sandoval fills, but I do not see him as an elite/$20M player. I also wonder if the luxury tax threshold will still be $189 Million five years from now. So while the Red Sox have talked about overpaying in AAV to shorten the length of contracts, I think I would prefer a lower AAV with a sixth year. But if the options are 5/90 and 6/100, I am not sure if the $1.33M reduction in AAV is worth the additional year. I'd be OK with that signing though; he might be a perfectly good player for six years.
I would certainly think the LT threshold will bump. The MLBPA won't stand for it not to, since it will have been 189 from 2013-2015 (I believe). I know it doesn't bump again before the end of the current CBA, though. Either way, it will bump by his years 3-5 or 3-6 on the deal, so it shouldn't be prohibitive.snowmanny said:
Looking at the difference between $95M/5 and $102M/6, I'd be fine with the latter (which I say as someone who doesn't really want the Sox to sign him, just that I'll trust them enough on their assessment that if the first offer is on the table then they may as well go to the second).
5/$95MM + a 6th year team option (at something like $10MM-$15MM) with a $6MM buyout would get Sandoval his $101MM guaranteed, and give the Red Sox an extra year of control on their on terms.
Not saying I'd necessarily do that if I were the Red Sox, but seems to me one reasonable way to bridge the difference.
Not saying I'd necessarily do that if I were the Red Sox, but seems to me one reasonable way to bridge the difference.
This is exactly where I'm at. For whatever reason I have an easier time accepting that he is worth a$100m contract more than $20m AAVOCD SS said:
bohous said:
May I ask why? 5/95 is a 19 million AAV, 6/102 is a 17 million AAV. Are 2 million less per year enough for you to commit to another season at a high price?
I saw an accountant mention on Twitter the different State Income Tax Rates between the states.
California has a 13.3% rate in the top bracket
MA has a 5.2%
I went through and did the calcuations based on equal 95 million dollar contracts here is the difference.
CA - $82,365,000
MA - $90,059,000
So equal contract offers by the Red Sox and Giants are anything but equal.
California has a 13.3% rate in the top bracket
MA has a 5.2%
I went through and did the calcuations based on equal 95 million dollar contracts here is the difference.
CA - $82,365,000
MA - $90,059,000
So equal contract offers by the Red Sox and Giants are anything but equal.
Your point stands, but it's not quite that big a difference, as the tax rate is based on where the games are played, I think. It's why back when the expos played those games in Puerto Rico, some players were pissed. Might be closer to a $4 million edge.mloyko54 said:
It's not that simple -- pro athletes must apportion their income among the various states where they play, plus state income taxes are deductible for federal income tax purposes. The difference is therefore much more slight than your example would suggest.mloyko54 said:
Nick Cafardo @nickcafardo 27m27 minutes ago Manhattan, NY
@RedHeadSoxFan @BostonGlobe From what I hear Sandoval is now in the decision making process. Not aware of whether teams have raised offers
@RedHeadSoxFan @BostonGlobe From what I hear Sandoval is now in the decision making process. Not aware of whether teams have raised offers
BarrettsHiddenBall said:
Definitely. There were a few big players that Toronto lost out on if I recall correctly.
It can also impact players in other ways. For example Vernon Wells lives in Texas where there is no state income tax. For him to push for a comeback, at presumably the league minimum, it would actually cost him money when all is said and done.
I'm assuming 5/95 doesn't get it done and best case for 5yr deal is $100m. I guess a vesting 6th year option at lower AAV would work if $100m is the magic number. I just have a hard time seeing the Sox setting the market for a guy with his numbers at $20m/yr. Or maybe I just need to accept that $20m really is new market value.rodderick said:
BarrettsHiddenBall said:
It absolutely factors into the decision making process. Whether it was 8 million, 4 million, or 2 million it's still money that separates offers.
Rosenthal:
Sandoval’s agents have not communicated to #SFGiants that they trail #RedSox in bidding. SF has been in contact with Sandoval’s side today.
https://twitter.com/Ken_Rosenthal/status/536232639578275842
https://twitter.com/Ken_Rosenthal/status/536232639578275842
link to tweet
Sandoval’s agents have not communicated to #SFGiants that they trail #RedSox in bidding. SF has been in contact with Sandoval’s side today.
https://twitter.com/Ken_Rosenthal/status/536232639578275842
https://twitter.com/Ken_Rosenthal/status/536232639578275842
link to tweet
I crunched the number further calculating the taxs paid just in games at Home (CA vs. MA) over the course of a 5 year contract. It may not be a factor but I still think it's interesting to see the difference.
Deal - 5 years - $95 million
$19,000,000 per year
approx $117,000 per Game
$9,500,000 per year on games played at home.
Based on the tax rates of CA (13.3%) Sandoval would pay:
$1,263,500 per year in CA State Income Tax
In MA Tax Rate (5.2%) Sandoval would pay:
$494,000 per year
Over the course of a 5 year deal that equates to:
$6,317,500 in CA state Income Tax vs. 2,470,000 in MA
Difference = 3.847 million dollars
Deal - 5 years - $95 million
$19,000,000 per year
approx $117,000 per Game
$9,500,000 per year on games played at home.
Based on the tax rates of CA (13.3%) Sandoval would pay:
$1,263,500 per year in CA State Income Tax
In MA Tax Rate (5.2%) Sandoval would pay:
$494,000 per year
Over the course of a 5 year deal that equates to:
$6,317,500 in CA state Income Tax vs. 2,470,000 in MA
Difference = 3.847 million dollars
It definitely feels like all the leaks on the Sandoval negotiations are coming from the Giants. They're definitely feeding Ken Rosenthal and the Asst. GM going on radio to say they were still in was a little strange to me.
Was hoping for some evidence. We have evidence that pro athletes generally use the reported size of their contract (not the net) as ego-fodder, and that Pablo Sandoval in particular has been dreaming about a $100m (gross, not net) contract. To my knowledge, there's no examples of a player choosing where to play based on the tax implications; if it absolutely factors into the decision making process, it should be easy to provide at least one.
It feels like the Sox are using Cafardo and the Giants are using everyone else. Which is fine. That being said doesn't it feel like Sandoval is going to return to the Giants?mloyko54 said:
Dwight Howard signing with the Rockets rather than the Lakers, whose offer was higher, until tax implications.
BarrettsHiddenBall said:
Are you looking for an example of a player coming out and saying it outright that taxes weighed into his decision of where to sign? Yeah, that would probably be hard to find.
Scott Lauber @ScottLauber 1m1 minute ago
Sandoval camp declining comment on status of negotiations, perhaps a sign that all offers are in and decision is getting closer #RedSox
Sandoval camp declining comment on status of negotiations, perhaps a sign that all offers are in and decision is getting closer #RedSox
I have heard this kind of equation before but it seems senseless to me. If you are a travelling salesman living in Boston arn't you taxed as a full time resident of Mass. ? Why wouldn't it be the same for a professional athlete?mloyko54 said:
I'm looking for some evidence before taking it as truth. They don't need to say it; an example of a player with multiple reported offers taking a lower (gross) contract with a higher net payout would work; moreover you'd think the Rangers, Astros, Marlins and Rays should be benefiting from some type of discount, but they appear to pay the same rates as everyone else.rodderick said:
This is a factor that people bring up every offseason without any evidence that players actually consider it. There's an appeal to common sense, but then these are baseball players -- they're being selected primarily for the ability to hit a baseball or arm strength, not their common sense. As I posted, we do have evidence that the gross, reported numbers matter to some players as it relates to their ego (Panda included); we have evidence that some players would rather be somewhere they're already comfortable even if they leave cash on the table. As far as I know, there's no evidence that tax implications are a meaningful factor.
BarrettsHiddenBall said:
Typically when a player has multiple offers, we only hear about the range of what teams have been offering, or just what the winning offer was. I can't recall many situations where it was confirmed that a player had very distinct options to choose from, and those numbers were widely available to the public. Those things don't usually get reported, so it's pretty hard to know, especially when taxes are a bigger factor precisely when offers are similar.
No recent contact between Sandoval and the Blue Jays. They're out.
http://www.sportsnet.ca/baseball/mlb/no-recent-contact-between-blue-jays-sandoval/
http://www.sportsnet.ca/baseball/mlb/no-recent-contact-between-blue-jays-sandoval/
padres deliver "serious" bid to panda (tho tough to beat SF & Bos there), then fly to pursue tomas. http://t.co/e5nddrXPHM
I certainly acknowledge we're dealing with incomplete info, which complicates the comparing offers approach; that's why I also mentioned the overall 'discount' that teams in low-tax states should be enjoying to market, if tax implications were a material factor.rodderick said:
Re: Taxes - here's a comment by Alex Antholoupos recently in an interview (link here http://andrewstoeten.com/2014/11/21/anthopoulos-speaks-martin-melky-free-agents-trades-taxes-prospects-and-more/)
On misconceptions about taxes
I think the tax issue with Canada it came up in this negotiation. A lot of our staff have to get involved. Its something, though, that theres a perception out there that the most expensive place to play is in Toronto, and thats not the case. Only 40% of your income is taxed from a Canadian standpoint, because you do spend time in Florida, and you only play 81 dates at home, and then you have a few off-days, but you do spend a lot of time in the United States. We did a study years ago, when J.P. Ricciardi was still here. We were trading for Troy Glaus and we hired some of the big accounting firms and we ultimately came out from a tax standpoint in the middle of the pack, but a lot of the agents still dont realize that. And thats something that we probably need to do a stronger job of educating some of the players and their agents that the perception that its more expensive to play here is completely wrong.
In Sandovals case, you have to also take into consideration that he's playing an additional 18 games in CA, with the Padres and Dodgers both being in the NL West.
Meanwhile, the Sox play 9 in NYC, which charges (for income over 500k) about 18k plus 3.876% on income over 500k.
I'm sure he could hire someone to make a full on assessment of actual take home pay, and he can also reduce his taxable income by his charitable donafions, so the tax hit is likely much less than being discussed.
Also have to take into consideration property taxes.
In terms of cost of living, there is a 17.5% bump in the cost of living in SF over Boston.
EDIT: cost of living assessment based on CNN Money
On misconceptions about taxes
I think the tax issue with Canada it came up in this negotiation. A lot of our staff have to get involved. Its something, though, that theres a perception out there that the most expensive place to play is in Toronto, and thats not the case. Only 40% of your income is taxed from a Canadian standpoint, because you do spend time in Florida, and you only play 81 dates at home, and then you have a few off-days, but you do spend a lot of time in the United States. We did a study years ago, when J.P. Ricciardi was still here. We were trading for Troy Glaus and we hired some of the big accounting firms and we ultimately came out from a tax standpoint in the middle of the pack, but a lot of the agents still dont realize that. And thats something that we probably need to do a stronger job of educating some of the players and their agents that the perception that its more expensive to play here is completely wrong.
In Sandovals case, you have to also take into consideration that he's playing an additional 18 games in CA, with the Padres and Dodgers both being in the NL West.
Meanwhile, the Sox play 9 in NYC, which charges (for income over 500k) about 18k plus 3.876% on income over 500k.
I'm sure he could hire someone to make a full on assessment of actual take home pay, and he can also reduce his taxable income by his charitable donafions, so the tax hit is likely much less than being discussed.
Also have to take into consideration property taxes.
In terms of cost of living, there is a 17.5% bump in the cost of living in SF over Boston.
EDIT: cost of living assessment based on CNN Money
Not so sure the cost of living issue is as big a deal for a professional athlete, but I could be wrong. They have their housing to consider, but stuff like food, gas, utilities, the difference is going to be negligible to someone bringing in $20,000,000 per year.
It's not like he has a $50,000 per month electric bill because "I'm Pablo Friggin Sandoval".
The tax thing absolutely has an advantage, but I think it's small enough that it'll only sway a player if all else is equal, or maybe if it's a guy like a Brian Daubach who never really made a fortune and is trying to cash in on a 1 year/$6M contract at the end of his career.
It's not like he has a $50,000 per month electric bill because "I'm Pablo Friggin Sandoval".
The tax thing absolutely has an advantage, but I think it's small enough that it'll only sway a player if all else is equal, or maybe if it's a guy like a Brian Daubach who never really made a fortune and is trying to cash in on a 1 year/$6M contract at the end of his career.
Every single time this type of situation arises the issue of state taxes comes up and nobody gets it right. The reason is because there's no one right answer. It depends on where you're a resident, if anywhere, and how many days you spend in each state. So trying to do a back of the envelope calculation for Sandoval is totally pointless. And in almost every case the difference is marginal relative the size of the contract.
Derek Jeter tried faking living in Florida to avoid taxes didn't he? It must have been significant enough to try it.glennhoffmania said:
http://blog.sfgate.com/johnshea/2014/11/22/pablo-sandoval-leaning-toward-red-sox/
I hear Pablo Sandoval has received his highest contract offer from the Padres but is leaning toward accepting an offer from the Red Sox, though events could change in a hurry.
Giants assistant GM Bobby Evans, who spoke with agent Gustavo Vasquez on Thursday morning, had suggested the third baseman could make his decision before Thanksgiving and that the Sandoval camp asked the Giants to submit their best offer.
“I think the interest is sincere,” Evans told the Henry Schulman. “I think Pablo loves this fan base as much as any player loves a fan base and that could go a long way.”
But so does a bigger contract offer. According to the Boston Globe, the Red Sox offered five years and $95 million. If that’s true, the Padres’ offer is north of that. Vasquez had told Schulman that six years is the preference.
I hear Pablo Sandoval has received his highest contract offer from the Padres but is leaning toward accepting an offer from the Red Sox, though events could change in a hurry.
Giants assistant GM Bobby Evans, who spoke with agent Gustavo Vasquez on Thursday morning, had suggested the third baseman could make his decision before Thanksgiving and that the Sandoval camp asked the Giants to submit their best offer.
“I think the interest is sincere,” Evans told the Henry Schulman. “I think Pablo loves this fan base as much as any player loves a fan base and that could go a long way.”
But so does a bigger contract offer. According to the Boston Globe, the Red Sox offered five years and $95 million. If that’s true, the Padres’ offer is north of that. Vasquez had told Schulman that six years is the preference.
Pablo leaning Towards Signing with Red Sox despite Padres offering most money
http://blog.sfgate.com/johnshea/2014/11/22/pablo-sandoval-leaning-toward-red-sox/
http://blog.sfgate.com/johnshea/2014/11/22/pablo-sandoval-leaning-toward-red-sox/
I'd be curious what sosh would collectively vote for if it came down to an extra 6th year or making the offer a flat 5 for 100 with 20 AAV. The Red Sox preferred the high AAV before on a three year del and up thread someone mentioned the lux tax will probably increase on my the last year or two of the deal...
Ken Rosenthal @Ken_Rosenthal 2m2 minutes ago
Possible that Sandoval could pick the team he wants, ask them to reach a number and close the deal that way with any of three bidders.
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Ken Rosenthal @Ken_Rosenthal 2m2 minutes ago
I asked Vasquez about @JohnSheaHey report that #Padres have high bid for Sandoval. He declined to say, but said offers all were “close.”
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Ken Rosenthal @Ken_Rosenthal 2m2 minutes ago
Spoke with Sandoval’s agent, Gustavo Vasquez. Said that Sandoval has offers from #RedSox, #SFGiants, #Padres and will decide next week.
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Ken Rosenthal @Ken_Rosenthal
Spoke with Sandoval’s agent, Gustavo Vasquez. Said that Sandoval has offers from #RedSox, #SFGiants, #Padres and will decide next week.
Ken Rosenthal @Ken_Rosenthal
I asked Vasquez about @JohnSheaHey report that #Padres have high bid for Sandoval. He declined to say, but said offers all were “close.”
Ken Rosenthal @Ken_Rosenthal
Possible that Sandoval could pick the team he wants, ask them to reach a number and close the deal that way with any of three bidders.
Spoke with Sandoval’s agent, Gustavo Vasquez. Said that Sandoval has offers from #RedSox, #SFGiants, #Padres and will decide next week.
Ken Rosenthal @Ken_Rosenthal
I asked Vasquez about @JohnSheaHey report that #Padres have high bid for Sandoval. He declined to say, but said offers all were “close.”
Ken Rosenthal @Ken_Rosenthal
Possible that Sandoval could pick the team he wants, ask them to reach a number and close the deal that way with any of three bidders.
Ego, change of scenery, Fenway will give him a bigger payday in 5 years, wants something new, wants to play with Big Papi, mad because SF didn't give him 5/90 before the season aka RESPECT. Lots of reasons that we'll probably never really know.Rudy Pemberton said:
Maybe he doesn't like it in SF for some reason we aren't aware of? Maybe the lure of playing for an historic franchise like the Red Sox in an historic ballpark like Fenway appeals to him? Maybe he wants to play with Papi for a couple of years? No idea why, but it seems like it's his choice to make with none of his suitors insulting him or blowing the others away.Rudy Pemberton said:
More likely the other way around. Milk the Red Sox knowing he's got a suitable offer from his home team.koufax32 said:
This offer has mistake all over it. Didn't the Sox just get out from underneath the deadweight contracts?
Lets not forget, 13 Team being built around "dirt dog mentality players". You don't need 18 mill a year Players with average power regardless the position.
It starts with Pitching and more Pitching. 3B via trade. Most of the Pitching prospects outside of Owens are all considered 4-5th starter types, several position players with decent upside. Get creative and find a 3B without a huge deal.
Frazier Reds? Yes arb eligible, with Cueto looking at huge coin in 16, do they budge now to free up payroll for a player who will be 29 next spring?
Make the call!
Lets not forget, 13 Team being built around "dirt dog mentality players". You don't need 18 mill a year Players with average power regardless the position.
It starts with Pitching and more Pitching. 3B via trade. Most of the Pitching prospects outside of Owens are all considered 4-5th starter types, several position players with decent upside. Get creative and find a 3B without a huge deal.
Frazier Reds? Yes arb eligible, with Cueto looking at huge coin in 16, do they budge now to free up payroll for a player who will be 29 next spring?
Make the call!
Reds always crying poverty. Maybe age factors into it for them. If available the sox have the prospects you would think to get it done..MakMan44 said:
If all the offers are as close as adverstised and he "really wanted to go back to SF above all else" he'd already have signed with SF.
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