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MLB Shohei Ohtani’s ten year $700m contract with LA includes $680m in deferred money

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Tkachuk Norris said:
What an absolute idiot. Does he not understand inflation? His agent should be fired
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$680 million will still buy a lot, even with inflation. Regardless, this is not the first contract like this... Justin Verlander has a similar set up to his contract. Either one can retire to a income tax free state (Nevada, Florida, Texas, etc...) and take home that much more of their future earnings.

I don't see it as fireable, I see it as ingenious.
 
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Does any other professional league in North America allow this kind of salary structure (deferment after athlete's career is over)?
I am quite sure if somebody would do that in Premier League or Bundesliga they would be relegated and kicked out of Championship league for many years
 
LadyStanley said:
Federal US taxes: 10-37% progressive (less Canadian taxes due)
California: max 39% (but about half the games are in other jurisdictions)
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Would Canadian and Ontario taxes be higher? I guess I'm asking if taxes would be an issue in his choosing the Dodgers over the Jays.
 
I don’t understand what the big deal is. If he took $46m AAV in PV that means he was likely offered $40-45m in cash. There was no $70m cash offer.
 
Nowotny said:
Does any other professional league in North America allow this kind of salary structure (deferment after athlete's career is over)?
I am quite sure if somebody would do that in Premier League or Bundesliga they would be relegated and kicked out of Championship league for many years
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Chelsea has also done quite a few shady deals over the last year and a half, and its part owner Boehly is also part owner of this baseball team as well. The fact that FIFA is starting to move a significant portion of its workforce to the US all but guarantees that football will become even more embedded in corruption.
 
GaboriklessWild said:
Chelsea has also done quite a few shady deals over the last year and a half, and its part owner Boehly is also part owner of this baseball team as well. The fact that FIFA is starting to move a significant portion of its workforce to the US all but guarantees that football will become even more embedded in corruption.
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? FIFA has been embroiled in more scandals than all of the major North American leagues combined.
 
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Nowotny said:
Does any other professional league in North America allow this kind of salary structure (deferment after athlete's career is over)?
I am quite sure if somebody would do that in Premier League or Bundesliga they would be relegated and kicked out of Championship league for many years
Click to expand...

NHL, NFL and NBA all allow deferred salary.
 
Tkachuk Norris said:
What an absolute idiot. Does he not understand inflation? His agent should be fired
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Yahhh, I think his agent, attorney, and tax attorney are better informed than you. This is about tax avoidance.

The only way to avoid inflation is to take a short-term deal. Ten years, paid out annually with no deferment does nothing to combat the impact of inflation. He's locked in.

Deferring 90% of the contract to 2034 and beyond - when he'll be living somewhere other than California - means he'll pay income tax on the $680 million based on wherever he IS living. If at all. It's more likely he'll buy a property in the Cayman Islands, or some other tax haven, and wriggle his way out of pay tax on any of the deferred amount.
 
Not sure California's tax rules but it is often based off where the income is 'earned'.

There is a strong argument that it will be earned in California and still have to pay taxes to California even if you are not living there after the duration of the contract.
 
tucker3434 said:
? FIFA has been embroiled in more scandals than all of the major North American leagues combined.
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It's because FIFA is being held accountable, as it literally involves every country on Earth.

North American sports leagues are accountable to no one. Especially not from governments like FIFA. A) a significant majority of sports team owners are involved in politics. They bankroll one of the two parties, aka oligarchs. B) I'm not familiar with any North American sports leagues other than the NHL. But like the NHL it is used by the government as a propaganda tool aka jingoism as required military nights and players must wear military style jerseys + many NHL games start like a third world military parade.

Another thing is lack of free press. It is hard to take leagues seriously where there is no legitimate independent anti-doping control. It does not follow the WADA code and does not allow USADA or WADA to test. I have yet to see an NHL journalist criticising the NHL's anti-doping efforts. Probably because that person would immediately lose his/her accreditation.

Like for example there's the case of Boogaard, he even failed the lame NHL doping test several times, nothing happened. NHL team doctors gave him extremely strong painkillers like they were candy. If this happened in Europe then many people would have gone to prison for many years. NHL has quite a lot of skeletons in the closet; deaths, suicides, brain injuries, addictions... But you don't see any 'journalist' holding the NHL accountable. Everyone's like, let's move on there's nothing to see here.
 
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Spydey629 said:
$680 million will still buy a lot, even with inflation. Regardless, this is not the first contract like this... Justin Verlander has a similar set up to his contract. Either one can retire to a income tax free state (Nevada, Florida, Texas, etc...) and take home that much more of their future earnings.

I don't see it as fireable, I see it as ingenious.
Click to expand...
Money is not a tangible asset, 680 million could be worth very little in 10 years. Nothing is guaranteed.

He has no way to predict what taxes will be like in ten years in California or other states, it could be much higher.
Inflation has basically doubled in the last 10 years.
The USA debt, decline. Impossible to tell what 680 million will be worth in 10 years.
BLNY said:
Yahhh, I think his agent, attorney, and tax attorney are better informed than you. This is about tax avoidance.

The only way to avoid inflation is to take a short-term deal. Ten years, paid out annually with no deferment does nothing to combat the impact of inflation. He's locked in.

Deferring 90% of the contract to 2034 and beyond - when he'll be living somewhere other than California - means he'll pay income tax on the $680 million based on wherever he IS living. If at all. It's more likely he'll buy a property in the Cayman Islands, or some other tax haven, and wriggle his way out of pay tax on any of the deferred amount.
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then why don’t all other players do this? I studied economics. I think I know what I’m talking about.

That 68 million (minus the taxes) will earn 5% in dividends + capital gains. Compounding annually. That is usually a 10% return.

It’s a bad decision that doesn’t make financial sense.
 
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GaboriklessWild said:
It's because FIFA is being held accountable, as it literally involves every country on Earth.

North American sports leagues are accountable to no one. Especially not from governments like FIFA. A) a significant majority of sports team owners are involved in politics. They bankroll one of the two parties, aka oligarchs. B) I'm not familiar with any North American sports leagues other than the NHL. But like the NHL it is used by the government as a propaganda tool aka jingoism as required military nights and players must wear military style jerseys + many NHL games start like a third world military parade.

Another thing is lack of free press. It is hard to take leagues seriously where there is no legitimate independent anti-doping control. It does not follow the WADA code and does not allow USADA or WADA to test. I have yet to see an NHL journalist criticising the NHL's anti-doping efforts. Probably because that person would immediately lose his/her accreditation.

Like for example there's the case of Boogaard, he even failed the lame NHL doping test several times, nothing happened. NHL team doctors gave him extremely strong painkillers like they were candy. If this happened in Europe then many people would have gone to prison for many years. NHL has quite a lot of skeletons in the closet; deaths, suicides, brain injuries, addictions... But you don't see any 'journalist' holding the NHL accountable. Everyone's like, let's move on there's nothing to see here.
Click to expand...

Accountable to no one? The commissioners of all four major leagues have been called to testify in front of Congress more than once - the steroid scandal comes to mind immediately.

And Baseball is beholden to the whims of Congress due to being the only sport with an antitrust exemption.

FIFA is probably the most corrupt quasi-governmental organization on the planet. To say it will get worse in the US is just plain ignorance.
 
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