1hooper
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Ohtani
Dec 11, 2023 20:42:37 GMT -5
Post by 1hooper on Dec 11, 2023 20:42:37 GMT -5
Interesting contract structure with so much deferred.
Alden Gonzalez, ESPN Staff Writer
Shohei Ohtani's historic contract with the Los Angeles Dodgers will see him defer $68 million of his annual $70 million salary, sources familiar with the deal said Monday, significantly lowering his new team's payroll and potential tax burden.
Ohtani agreed on a 10-year, $700 million contract with the Dodgers on Saturday, by far the richest in the history of North American professional sports. A source said then that the majority of the contract would come in deferred money; under this structure, however, Ohtani is deferring more than 97% of his earnings. The deferred money -- totaling $680 million -- will be paid to Ohtani between 2034 and 2043, a source said.
The collective bargaining agreement does not place a limit on the amount of money that can be deferred, but teams have to set aside the present-day value of the deferred money -- in Ohtani's case, around $44 million in cash each year -- into an escrow account.
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jolyb
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Ohtani
Dec 12, 2023 13:06:41 GMT -5
Post by jolyb on Dec 12, 2023 13:06:41 GMT -5
That's quite a contract arrangement. Makes you recall the Mets' deal with Bobby Bonilla, with lots of salary deferred for a very long time. The major difference here appears to be that the Ohtani deferred money doesn't bear interest, while the Bonilla deferred money allowed interest to accrue on the deferred amount at 8% per year (the Mets assumed this would not be a problem because they were earning an even higher yield by investing the money through Bernie Madoff ).
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shoes
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Ohtani
Dec 13, 2023 13:30:06 GMT -5
Post by shoes on Dec 13, 2023 13:30:06 GMT -5
I wonder how it will be taxed if he moves back to Japan. Will he still have to pay US and California taxes on on the deferred income?
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tc
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Ohtani
Dec 13, 2023 14:00:56 GMT -5
Post by tc on Dec 13, 2023 14:00:56 GMT -5
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1hooper
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Ohtani
Dec 13, 2023 14:31:58 GMT -5
Post by 1hooper on Dec 13, 2023 14:31:58 GMT -5
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shoes
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Ohtani
Dec 13, 2023 14:39:39 GMT -5
Post by shoes on Dec 13, 2023 14:39:39 GMT -5
Very interesting. I am going to predict that after 10 years, he will no longer be residing in California, but perhaps not Japan either.
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Ohtani
Dec 13, 2023 14:56:52 GMT -5
Post by spankyupinclass on Dec 13, 2023 14:56:52 GMT -5
One of my favorite Beatles songs is Taxman. "If you try to walk they'll tax your feet." So on and so forth...
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Ohtani
Dec 13, 2023 15:02:44 GMT -5
Post by spankyupinclass on Dec 13, 2023 15:02:44 GMT -5
Just had a chat with the Badactor and in California they are concerned about some kind of bug that destroys fruit.I had never heard of such a thing.Then again, I had never see a lemon tree until I visited Dell a few years back. I still have never seen an orange tree!
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