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Hey if we're in the financial weeds, given that the contract is guaranteed, couldn't Shohei easily take out some kind of loan that would let him make interest on the money now and then pay it back once the deferred money actually starts coming in?
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Dec 12, 2023 06:29
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I'm also wondering what happens in say, 4-5 years, if his performance is declining and they want to trade him. Are the Dodgers on the hook for the deferred salary, or would the new team be on the hook for it? Basically, if he becomes a Stanton in a sense.
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Dec 12, 2023 06:31
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Canned Sunshine posted:It's not though, because it's only for CBT purposes. Usually with big contracts, even with referrals, you'll see the CBT and actual player-obtained AAV at least in some way reflective; for Ohtani, there's a huge difference between the "advertised" 10y/$700M announced, the $46M/year CBT AAV, and then his actual $2M/year income, to which... If I told you I'd give you $100 today or $X ten years from now, there are pretty standard ways to determine what X should be for them to be of roughly equal value. This isn't some financial alchemy conjured out of the ether by the lords of baseball, it's a basic accounting practice.
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Dec 12, 2023 06:33
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Canned Sunshine posted:gently caress the Owners. Forever. Always. Here's something we can all agree on.
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Dec 12, 2023 06:33
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Canned Sunshine posted:I'm also wondering what happens in say, 4-5 years, if his performance is declining and they want to trade him. Are the Dodgers on the hook for the deferred salary, or would the new team be on the hook for it? Yeah I think the deferred money moves with him so he's untradeable even if he's still the greatest player on earth e: like imagine 5 years into the deal now it's a 5/690 deal lol Intruder fucked around with this message at 06:46 on Dec 12, 2023 |
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Dec 12, 2023 06:33
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Does anyone else think they should give out an award for Best Contract Negotiating? Just in case this deal doesn't work out in practice, it would be a shame not to honor what is objectively shrewd accounting just because of our obsession with Ringz Culture
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Dec 12, 2023 06:33
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bawfuls posted:The money he will be paid over 30 years or whatever is functionally equivalent to getting $46M per year for 10 years and none after that. Functionally equivalent? Are you talking about in terms of accounting for the CBT? Or in terms of the actual, true amount of money he will earn over the agreed-upon 20 year repayment period? If you are talking about from a CBT perspective, I fully agree! But if you are talking about Ohtani himself is going to pocket, no, it's not $460M. He will take him $700M plus some, it will simply take 20 years to get there. I get that it's a basic accounting practice, but you seem to be disputing the $2M/year in actual income Ohtani himself will earn, nothing else under consideration, or that he will ultimately earn $700M total from this contract, regardless of length of time. Intruder posted:Yeah I think the deferred money moves with him so he's untradeable even if he's still the greatest player on earth Yeah, it's definitely locking him in for the life of the contract I would assume.
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Dec 12, 2023 06:38
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Bawfuls, I'm honestly not trying to poo poo up your happy time, because if I were a Dodgers fan, I'd be ecstatic that they signed Ohtani. But the way he did the contract, fucks up a lot of stuff that impacts the players and, additionally, he's letting Dodgers ownership off the hook. Like, why not require they pay him $50M/year? He shouldn't let them defer poo poo; as you said, they're worth $300B - they can afford to pay HUGE CBT penalties year after year. Again: Canned Sunshine posted:gently caress the Owners. Forever. Always.
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Dec 12, 2023 06:43
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Canned Sunshine posted:Functionally equivalent? Are you talking about in terms of accounting for the CBT? Or in terms of the actual, true amount of money he will earn over the agreed-upon 20 year repayment period? $700M paid out over 30 years or whatever is functionally equivalent to about $460M paid out over 10 years. It will have roughly the same impact on Ohtani's individual wealth at the end of the term. This is just an expression of the time value of money.
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Dec 12, 2023 06:48
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wish avatars could be 1088x1088
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Dec 12, 2023 07:04
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What happens if he retires after year six because there are no works left to conquer?
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Dec 12, 2023 07:13
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xbilkis posted:Does anyone else think they should give out an award for Best Contract Negotiating? Just in case this deal doesn't work out in practice, it would be a shame not to honor what is objectively shrewd accounting just because of our obsession with Ringz Culture lol
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Dec 12, 2023 07:15
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drat, 34kB over the limit
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Dec 12, 2023 07:19
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Poque posted:Ohtani is going to pay next to nothing in state taxes (not sure if the “bolt the state and incur no tax elsewhere” argument is true yet but it seems like it) Baseball fans who claim to work as accountants and tax lawyers believe this won't happen. Regardless, all it would take is an act of the California legislature that says "oh no you don't" and that's done. They may choose to tax the Dodgers organization rather than the player if it comes to that, since the former won't move.
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Dec 12, 2023 07:35
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bawfuls posted:I don't know how else to explain it. No, I get the Time Value of Money, but $460M is the present-day AAV of the 10-year contract, with deferrals, and including the CBA's 5% interest adder to each deferred year of income. So it's not functionally equivalent to just $460M paid out over 10-years; it's functionally equivalent to either $460M paid out over 10 years AND a lump sum payment of $240M at the end, OR $460M paid out over 10-years with 5% compounding escalator that's effectively acting like a COLA. That's where you're confusing the difference. Anyway, I'm tired and my head hurts, so I'm moving on. Oh, but good news: after some California tax code research, I did discover that Ohtani will be on the hook for paying his anticipated amount of taxes regardless of when he gets it, because it's on the total income obtained for the services performed, regardless of whether deferrals are present or not. So he ain't escaping it! (though it's probably for the better for him at least, since it looks like in Japan, he'd be in a 45% tax bracket). Edit: To add on to the silly COLA reference (meant more like a partial joke), but that is how the CBT impact is factored: they're taking a $68M/year salary, saying it'll be deferred 10 years, which carries with it the 5%/year interest per the CBA, and apparently it is compounding, because they're then bringing it to present-day, "Time Value of Money" and all that, which makes it about a $43-44M/year salary, then adding on his actual $2M/year salary he'll get. So the Dodgers get a $45-46M/year CBT hit, for 10 years, to your point Bawfuls as it relates to how the CBT views it, but then he still gets another $240M for deferring his contract, except, instead of getting $460M in the first 10 years and the $240M to follow, his actual true income is only the $2M/year for 10 years ($20M/10) and then effectively receiving a nice annuity of $68M/year for years 11-20 ($680M). Either way, he's letting Dodgers management/ownership off a serious financial hook. But he probably already earns significant amount in endorsements/etc., so $2M/year or $46M/year, probably in the end doesn't matter much, since if his endorsements fall off 10 years from now, he'll still have that nice little $68M/year coming in. Canned Sunshine fucked around with this message at 07:58 on Dec 12, 2023 |
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Dec 12, 2023 07:45
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The luxury tax savings being about $25mil. That's pretty significant if you want to throw around another $60mil or something, but it's not the "Dodgers make Ohtani invisible to luxury tax" earthbreaker the internet initially thought it was.bawfuls posted:drat, 34kB over the limit Defer the excess bandwidth to 2029 when Jeff has more servers.
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Dec 12, 2023 08:02
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Any NPB experts here? Is Yamamoto considered a better pitcher than Sasaki? From what I can tell Yamamoto has a better track record, more polished, higher floor. Sasaki has more injury problems, sometimes control issues, but filthy raw stuff so a higher ceiling. Does that sound right? Who would you rather have on your team?
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Dec 12, 2023 08:09
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Popete posted:lol I can't believe an Ohtani signing made Bawfuls turn into Rand Paul 
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Dec 12, 2023 08:10
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Intruder posted:Pretty hosed up of Ohtani to go to the Dodgers when Arte Moreno was also willing to pay him $2m a year lmao
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Dec 12, 2023 08:12
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Honestly, the Ohtani contract is interesting because it is effectively saying, "Hey, let's go all in while we have this guy, but pay him AND whoever we need to replace him." It's Bobby Bonilla Day turned up to Eleven, with both the copious amounts of money and the laughs deferred for a decade.
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Dec 12, 2023 08:16
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LonesomeCrowdedWest posted:Any NPB experts here? Is Yamamoto considered a better pitcher than Sasaki? Yamamoto is safer, he's done it in NPB for 7 seasons; he's in his prime, he's never really had a super meaningful injury and he's going to get loving PAID. Sasaki has every bit as much potential as yamamoto and honestly might even end up better, he threw a perfect game at 20, he hits 100 MPH on the fastball at levels basically only seen by deGrom, he's much closer to the prototypical pitcher size and he's so young he doesn't actually qualify for the big free agent contracts, the most he can sign for is like 5 million as a rookie prospect. However, his team would only get like 950k so even if he wants to get posted he might not, and he was injured for like, 2-3 months this season, even if it was a non-throwing arm injury Yamamoto is going to get enough that the bottom third-half or so of teams might not even make an offer, but Sasaki (if posted) is the kind of guy every single team in MLB makes an offer and does whatever it takes to sign him, because he's potentially an ace for the next decade that costs you less than 6 million dollars total right now.
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Dec 12, 2023 08:24
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After doing a little tour around Twitter and Reddit, holy poo poo the baseball internet is SO MAD! Reddit keeps serving me up posts from other team subs absolutely fuming about the deferrals and ranting about how unfair it is, the league is a joke, MLB needs to squash the deal, the league is conspiring to make the Dodgers and Yankees unbeatable etc etc. There’s even one in the Dbacks sub complaining that they’ve got no hope to complete with the Dodgers, these poor souls must have the memories of a goldfish. That’s what the last three pages sounds like to me now, just a bunch of people mad that he didn’t pick their team. In short:
Somebody fucked around with this message at 14:56 on Dec 12, 2023 |
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Dec 12, 2023 08:39
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TheFlyingLlama posted:Yamamoto is safer, he's done it in NPB for 7 seasons; he's in his prime, he's never really had a super meaningful injury and he's going to get loving PAID. Awesome. Thanks! Any idea when Sasaki gets posted? It’s not 9 years service time or whatever it was back in the day anymore, right?
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Dec 12, 2023 08:43
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Sasaki has asked to be posted, and there are rumors that he has a clause in his contract that says "when you ask we have to post you" but we have no idea if that's true or not. If there isn't something specific in his contract that says either "we have to post you when you ask" or "we will post you after the 2025/2026 season" or whatever they can hold him until basically right before free agency, although that would...go over poorly for any young superstar talents actually signing with them in the future
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Dec 12, 2023 08:45
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bawfuls posted:After doing a little tour around Twitter and Reddit, holy poo poo the baseball internet is SO MAD! Reddit keeps serving me up posts from other team subs absolutely fuming about the deferrals and ranting about how unfair it is, the league is a joke, MLB needs to squash the deal, the league is conspiring to make the Dodgers and Yankees unbeatable etc etc. There’s even one in the Dbacks sub complaining that they’ve got no hope to complete with the Dodgers, these poor souls must have the memories of a goldfish. some real "I just spent the last 6 hours reading conservative Twitter" energy
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Dec 12, 2023 08:45
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It was great! SA has a long and beautiful history of gawking at the most entertaining shitshows on the internet, and I adhered to the golden rule “don’t touch the poop”
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Dec 12, 2023 08:58
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This might have come up at some point but does Time Value of Money get factored into CBT calculations for long-term heavily-backloaded contracts? I know teams generally like signing players to those contracts for the same general reason that they like even longer-term deferred money — i.e. money in the future is worth less than money today — but I don't know if those two situations are treated differently, and/or if there's a practical reason why they might be
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Dec 12, 2023 09:09
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xbilkis posted:This might have come up at some point but does Time Value of Money get factored into CBT calculations for long-term heavily-backloaded contracts? I know teams generally like signing players to those contracts for the same general reason that they like even longer-term deferred money — i.e. money in the future is worth less than money today — but I don't know if those two situations are treated differently, and/or if there's a practical reason why they might be Yes for luxury tax purposes Ohtani counts as around $46M AAV.
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Dec 12, 2023 09:12
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No, I know the deferred money is calculated differently. I'm asking if there's anything other than a straight $1=$1 no-matter-what-year-it's-paid-out-in calculation used for long-term backloaded deals, where teams are generally benefitting from the same financial principles about future value of money that they do when they sign players to deferred contracts. If not, I was curious if there's an established reason why those two situations are treated differently other than "that's how the CBA was negotiated"
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Dec 12, 2023 09:14
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I believe when a deal has no deferred money the tax is calculated based on AAV. So a 10 year 100 million deal would be 10 million a year regardless of how it’s structured.
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Dec 12, 2023 09:41
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https://x.com/jfrankensteiner/status/1734402865915896169?s=46&t=GxZoSKgPzb_-zyUnvLFKvg
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Dec 12, 2023 09:52
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bawfuls posted:why should I care that Ohtani pays US taxes instead of Japanese taxes? I hate most of what the US government spends money on anyway. The funny thing is because he is making so much money and is tax resident of both countries he gets taxed by both and CA! International taxes are a bitch for the rich.
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Dec 12, 2023 09:53
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bawfuls posted:After doing a little tour around Twitter and Reddit, holy poo poo the baseball internet is SO MAD! Reddit keeps serving me up posts from other team subs absolutely fuming about the deferrals and ranting about how unfair it is, the league is a joke, MLB needs to squash the deal, the league is conspiring to make the Dodgers and Yankees unbeatable etc etc. There’s even one in the Dbacks sub complaining that they’ve got no hope to complete with the Dodgers, these poor souls must have the memories of a goldfish. bawfuls with all due respect this gimmick loving sucks rear end
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Dec 12, 2023 10:05
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bawfuls posted:After doing a little tour around Twitter and Reddit, holy poo poo the baseball internet is SO MAD! Reddit keeps serving me up posts from other team subs absolutely fuming about the deferrals and ranting about how unfair it is, the league is a joke, MLB needs to squash the deal, the league is conspiring to make the Dodgers and Yankees unbeatable etc etc. There’s even one in the Dbacks sub complaining that they’ve got no hope to complete with the Dodgers, these poor souls must have the memories of a goldfish. A lot of people don't buy the "teams should spend everything they can up to the rafters on players and everything else is just owner dickriding" because they don't want to see baseball become Premiere League where there's a few teams representing the biggest population clusters in America and then there's the jobbers they beat up on. Of course that still happens to an extent because of the lack of a floor. It's impossible to say say how much the luxury tax is responsible for the variety of different teams that have won the World Series year after year (there'd be fewer if a team stopped blowing it's chances) but I will take it over predicting the WS matchup in May. Monathin posted:bawfuls with all due respect this gimmick loving sucks rear end All roads lead to yankeesfans.GIF Craptacular! fucked around with this message at 10:09 on Dec 12, 2023 |
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Dec 12, 2023 10:06
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Craptacular! posted:The luxury tax savings being about $25mil. That's pretty significant if you want to throw around another $60mil or something, but it's not the "Dodgers make Ohtani invisible to luxury tax" earthbreaker the internet initially thought it was. Yeah, I saw somewhere that they're actually currently $15M or 17M under under the CBT after this deal, so I guess they could have signed him for more AAV, but would have been that much closer, or right at, the threshold. So instead, they have that $15M-17M to spend on other FAs; maybe they can convince a few more FAs to join and defer too, who knows! I do wonder though if the owners are going to come down hard on this, because there are a number of ways you could really put the screws to it, such as having deferred salary still count against the CBT, whether now or in the future deferred years, etc.
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Dec 12, 2023 10:39
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Canned Sunshine posted:it's functionally equivalent to either $460M paid out over 10 years AND a lump sum payment of $240M at the end can you explain how but in fewer words? i thought the $460M already was the $700M but adjusted. or in other words, how is the Cock & Ball Torture tax calculation in the Can't Be Arsed agreement faulty? matti fucked around with this message at 11:13 on Dec 12, 2023 |
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Dec 12, 2023 11:11
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https://www.mlbtraderumors.com/2023/12/why-shohei-ohtanis-contract-structure-is-not-a-luxury-tax-dodge.html this is a good article I read and about the depth I understand of the subject
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Dec 12, 2023 11:47
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I really can't believe this thing devolved into "but he might not end up paying the proper California state taxes  "Canned Sunshine posted:Yeah, I saw somewhere that they're actually currently $15M or 17M under under the CBT after this deal, so I guess they could have signed him for more AAV, but would have been that much closer, or right at, the threshold. So instead, they have that $15M-17M to spend on other FAs; maybe they can convince a few more FAs to join and defer too, who knows! I don't know that the other owners would want to because 1) other teams like the Nationals for instance like to use deferrals and 2) trying to count future money the exact same as current day money doesn't math correctly. No ones cries about void years and all the other things teams in the NFL do to skirt the salary cap, other teams just start doing the same poo poo.
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Dec 12, 2023 12:34
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afaik Nationals use deferrals because of a tax quirk where the players actually can avoid real-life taxes with them which is not possible elsewhere in the US which I assume is why MLBPA is for deferrals because it allows for stuff like that
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Dec 12, 2023 12:47
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Intruder posted:Pretty hosed up of Ohtani to go to the Dodgers when Arte Moreno was also willing to pay him $2m a year lol
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Dec 12, 2023 13:06
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