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The present value of the contract will count towards the luxury tax calc. So $46M annually over the 10 years he is a Dodger. The Dodgers don't really get any benefit out of this arrangement, since the CBT hit is reflective of his market value and they are required to set aside the present value of the deferred payments each year.
As for Ohtani, he comes across as a hero. But it's fake. He is not giving the Dodgers more flexibility. Don't let that $700M distract you from what is really going on. He is getting paid $46M a year, effectively. 10 years is a long time. The difference between the $68M he will collect in 2034 vs. $46M today is the power of compounding interest. The only true benefit to either side is he gets to avoid paying state taxes on the deferred payments. Normally, you have to pay taxes based on where you earned the money. Ball players file multiple state tax returns to account for their away games. But in a deferred arrangement of 10 years or greater, state taxes are derived on where you live when you actually receive the deferred payments....which will very likely be in Japan.
Interesting that, rumor has it, there's an opt out tied to the Dodgers execs.
First time I've heard of that.. I can't even remember a contract opt out tied to a manager or coach, which could make a whole lot more sense.
Might be pretty difficult to tie it to a manager. A lot of people believe that Roberts is still with the Dodgers because he's 100% or close to it with the game plan the front office wants. A guy like Bruce Bochy might not be that way. And given the length of the contract no way they could make the manager part of that clause.
Baseball star Ohtani's structured contract could help avoid 98 million dollars in California state income taxes
Baseball star Shohei Ohtani's new structured $700 million contract can help avoid up to 98 million dollars in California state income taxes by living out of state in no or lower income tax states. The deferred payments are part of the strategy. While playing he will take only 2 million dollars a year for 20 million over 10 years and not the full 700 million or 70 million a year.
Baseball star Shohei Ohtani's new structured $700 million contract can help avoid up to 98 million dollars in California state income taxes by living out of state in no or lower income tax states. The deferred payments are part of the strategy. While playing he will take only 2 million dollars a year for 20 million over 10 years and not the full 700 million or 70 million a year.
There is speculation that California tax officials might try to contest the contract/strategy.
I have always said that Bobby Bonilla's 25 year contract, starting up 10 years after he last played a game, for $1M a year was the best one ever signed but Ohtani's contract takes the cake. However this contract isn't fair for the other MLB teams and I doubt they will allow it. As far as California - you are nothing more than a bunch of parasites, and I couldn't care less that you're losing tax money.
I have always said that Bobby Bonilla's 25 year contract, starting up 10 years after he last played a game, for $1M a year was the best one ever signed but Ohtani's contract takes the cake. However this contract isn't fair for the other MLB teams and I doubt they will allow it. As far as California - you are nothing more than a bunch of parasites, and I couldn't care less that you're losing tax money.
You don't appear to comprehend the meaning of the term 'parasite'. California is one of the least dependent states on federal aid (and 'federal aid' means 'money from other states'). No other state funds as large a percentage of its expenditures through state taxes (ie, locally). Your own state of Pennsylvania, in fact, requires more federal support than the average state. And from where does that federal aid ultimately come? From... states like California. In short, California is your sugar daddy.
And, just so you know, that's the actual meaning of 'parasite'.
I have always said that Bobby Bonilla's 25 year contract, starting up 10 years after he last played a game, for $1M a year was the best one ever signed but Ohtani's contract takes the cake. However this contract isn't fair for the other MLB teams and I doubt they will allow it. As far as California - you are nothing more than a bunch of parasites, and I couldn't care less that you're losing tax money.
Why isn't it fair? They don't have a say in the matter so they can't stop it.
Why isn't it fair? They don't have a say in the matter so they can't stop it.
Fairness isn't a problem in my eyes. This is honestly kinda similar to a Tom Brady situation. He was actually underpaid for most of his career. And he was OK with that. He wanted money to be spent on other parts of the team.. He had his endorsement money coming in and.. Of course, his wife's income as well.
So, he could take a rather 'average' contract and was willing to do it. That's one of the ways New England was as good as they were for as long as they were.
So.. Dodgers are just lucky to have someone who wants to play for them in the Ohtani situation and mindset to do it.
However.. That doesn't mean this isn't problematic. You can bet your bottom dollar that the MLBPA could have a problem with this if things go too far. And, this contract is likely pushing the limits of how far is 'too far'.. If teams start trying to force deferred payments when the players don't want them.
All that being said.. I think deferred payments make a whole lot of sense from both sides. but.. Somewhere, somehow there need to be some limits. You can't have an entire team that's getting deferred payments.
You don't appear to comprehend the meaning of the term 'parasite'. California is one of the least dependent states on federal aid (and 'federal aid' means 'money from other states'). No other state funds as large a percentage of its expenditures through state taxes (ie, locally). Your own state of Pennsylvania, in fact, requires more federal support than the average state. And from where does that federal aid ultimately come? From... states like California. In short, California is your sugar daddy.
And, just so you know, that's the actual meaning of 'parasite'.
I live in CA and can tell you the taxes are too damn high.
I'm happy for Elon Musk who was smart enough to leave before he cashed out a lot of stock. Why should he give CA 10%+ of that when he can live in a state that will take 0% of it?
A week ago, when Shohei Ohtani was hitting a pedestrian .242/.297/.333 (.631 OPS)
After hitting two doubles and a homer last night he is now .345/.383/.673 (1.056 OPS)
He also accomplished something he had never done before: five straight multi-hit games.
To be clear, this hot streak started on Wednesday against the Giants, the night he hit his first home run as a Dodger. But there’s a much more ... On Sunday at Wrigley Field, Ohtani was 0-for-2 against Cubs starter Shota Imanaga when the skies opened up and the game was delayed for nearly three hours. As Fabian Ardaya tells us, that rain delay was when Ohtani, fueled by either boredom or curiosity, picked up a modified cricket bat and took a few swings in the batting cages near the dugout. When the skies cleared, Ohtani returned to hit a triple and a double. He says he plans to keep practicing with the cricket bat.
A 3 hour rain delay? Good grief.
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Baseball star Ohtani's structured contract could help avoid 98 million dollars in California state income taxes
