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Why would you allow salary deferrals for salary cap purposes?
Posted on 12/12/23 at 9:29 am
Posted on 12/12/23 at 9:29 am
Leagues have salary caps/luxury taxes for a reason. Mainly to prevent exactly what Ohtani/Dodgers are doing (paying and stacking talent) and keeping the league competitive.
What’s the purpose of allowing teams to structure deals like this? What benefit does it have for the league? Why not just take the total contract value divided by the amount of years he has to play to calculate the cap hit?
Just genuinely curious if there’s a reason. Seems like it’s bad for the player to allow this.
What’s the purpose of allowing teams to structure deals like this? What benefit does it have for the league? Why not just take the total contract value divided by the amount of years he has to play to calculate the cap hit?
Just genuinely curious if there’s a reason. Seems like it’s bad for the player to allow this.
Posted on 12/12/23 at 9:31 am to Weagle25
do they not count later on?
This post was edited on 12/12/23 at 9:32 am
Posted on 12/12/23 at 9:33 am to SammyTiger
quote:
do they not count later on?
Apparently Ohtani will be a 40-45m hit for 10 years then 0 when they're paying him 68m a year for 10 years.
Posted on 12/12/23 at 9:35 am to Weagle25
quote:
Why would you allow salary deferrals for salary cap purposes?
They’re not?
I believe his salary counts for 70M against the salary cap & his adjusted salary is only 2M
Posted on 12/12/23 at 9:38 am to Srbtiger06
quote:
Apparently Ohtani will be a 40-45m hit for 10 years then 0 when they're paying him 68m a year for 10 years.
Is the cap based on “luxury tax salary”?
The 680M deferral lowers the present day value to 460.8M so the luxury tax salary is 46.08M/yr for 10 years
Posted on 12/12/23 at 9:39 am to Weagle25
The MLB luxury tax is impotent. The Dodgers don’t give two shits. This is about Ohtani living off of endorsements and wanting huge retirement checks.
Posted on 12/12/23 at 9:51 am to Weagle25
One thing people aren't talking enough about is how insane the endorsements are for athletes in Japan. During his prime, Kei Nishikori was making more money annually than Novak Djokovic and Rafael Nadal. Naomi Osaka has made more money in endorsements than Serena Williams and Maria Sharapova ever did during their primes. And Ohtani is obviously on an entirely different level from Osaka and Nishikori.
Ohtani's thinking is that he's already making well over $40 million annually in endorsements so he doesn't really need to make any money from baseball for the next ten years. But after that, the commercial opportunities will start to decrease drastically for a player whose career is winding down. That's where getting the $68 million/AAV for the following 10 years comes in. Basically, Ohtani would prefer to get consistent earnings for the next 20 years than just to get an absurd amount of money for the next 10 years and very little after that.
Ohtani's thinking is that he's already making well over $40 million annually in endorsements so he doesn't really need to make any money from baseball for the next ten years. But after that, the commercial opportunities will start to decrease drastically for a player whose career is winding down. That's where getting the $68 million/AAV for the following 10 years comes in. Basically, Ohtani would prefer to get consistent earnings for the next 20 years than just to get an absurd amount of money for the next 10 years and very little after that.
Posted on 12/12/23 at 9:51 am to JimTiger72
quote:
I believe his salary counts for 70M against the salary cap & his adjusted salary is only 2M
Every article says otherwise
Posted on 12/12/23 at 9:53 am to The Boat
quote:
The MLB luxury tax is impotent. The Dodgers don’t give two shits. This is about Ohtani living off of endorsements and wanting huge retirement checks.
The only way this makes sense for Ohtani is if they’re were going to give him a lot less now and were willing to give him a lot more 10 years from now.
Which I guess could be the case
Posted on 12/12/23 at 9:55 am to Bench McElroy
quote:
Basically, Ohtani would prefer to get consistent earnings for the next 20 years than just to get an absurd amount of money for the next 10 years and very little after that.
Well that’s not very smart. You take the money now. Invest it and live off the earnings if that’s what you want.
Posted on 12/12/23 at 9:56 am to Weagle25
It's almost like people don't realize leagues and teams have been taken advantage of this for years. Ohtani isn't the first, nor will he be the last to get deferred. Mario Lemiux ended up with partnership of the Penguins thanks to the owners not being able to make a payment on his deferral.
Posted on 12/12/23 at 9:58 am to Weagle25
For you and I that isn't smart, the dude has been making 40m a year for several years now and last year between endorsements and salary he made 70m. I'm sure he will be loving just fine in the future. He will be loving off both for awhile.
Posted on 12/12/23 at 9:58 am to Falco
quote:
It's almost like people don't realize leagues and teams have been taken advantage of this for years. Ohtani isn't the first, nor will he be the last to get deferred. Mario Lemiux ended up with partnership of the Penguins thanks to the owners not being able to make a payment on his deferral.
I do realize that.
But I don’t understand the purpose.
Posted on 12/12/23 at 9:59 am to The Boat
quote:
This is about Ohtani living off of endorsements and wanting huge retirement checks.
and wanting to avoid high taxes in California.
Posted on 12/12/23 at 9:59 am to The Boat
quote:thats not true
The MLB luxury tax is impotent
Posted on 12/12/23 at 10:01 am to Weagle25
Teams agree to these long term mega deals and the players get more money long-term. Teams like them because it lessens their hit and the payout is longer.
Same reason people take out loans, to lessen the financial impact now and pay it down the road. The main difference with Ohtani and others is he isn't collecting interest on his payback where Mookie and others are. That's where this hurts him and why the deal is better for L.A. which apparently he requested.
Same reason people take out loans, to lessen the financial impact now and pay it down the road. The main difference with Ohtani and others is he isn't collecting interest on his payback where Mookie and others are. That's where this hurts him and why the deal is better for L.A. which apparently he requested.
Posted on 12/12/23 at 10:02 am to WPBTiger
quote:
and wanting to avoid high taxes in California.
California will fight to get their cut.
And honestly I think they’ll get it. He earned it in California. It gets taxed in California.
Posted on 12/12/23 at 10:06 am to Weagle25
Do you think professional sports teams actually operate with honor and righteousness, considering what’s best for the sport and the league and the fans?
You do what you can get away with until someone stops you. It is what it is.
You do what you can get away with until someone stops you. It is what it is.
Posted on 12/12/23 at 10:06 am to Weagle25
quote:
He earned it in California.
He will earn it in 2034, where he could no longer be living in CA
Posted on 12/12/23 at 10:06 am to Weagle25
I would say only 25% deferrals would be fair.
But now you almost can't do it, because the Dodgers would benefit SUBSTANTIALLY for having done such a deal, where now everyone for the next 10 years can't.
But now you almost can't do it, because the Dodgers would benefit SUBSTANTIALLY for having done such a deal, where now everyone for the next 10 years can't.
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