OT: Ohtani
- Thread starter sonofabit
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Outrageous. Dude will be making almost twice my own annual salary.
Has the feel of the Dodgers thinking they had to do something after a couple early playoff exits. Lineup will be one of the best ever but doesn’t address their immediate need of starting pitching. As currently constructed the rotation is mostly full of question marks.
You really didn’t think Nutting had a chance. In fact there were probably 5 teams at most that had a chance. He could hit 70 home runs and win 25 games every year and he wouldn’t be worth that.
Ohtani can now buy the pirates with his new found wealth
His yearly salary is what the pirates will spend for 25 players this year
Teams have generally paid around $8million per WAR over the last few years. His WAR last year was 10 and his average is 9.5 over the last 3 seasons.
No other baseball player can hand a team an entire new country for marketing.
It seems like now, more than ever, there is a dearth of pitching talent league wide.
Why just look at the Pirates!
If he hits 70 home runs and wins 25 games on the mound he would be worth way, way more than $70 million. He'd be the best position player in a league where the highest paid position player (other than himself) makes $40 million per season, and he'd be the best pitcher in a league where the highest paid pitcher (other than himself) makes $43 million per season.
Of course he's not going to do that. But if he did, it would be the greatest season in baseball history.
By a lot.
I agree, and as good as the Dodgers have been and will be offensively their starting pitching has been undone by injury more than anyone in recent years. If they don’t make some moves in that regard they’re going to come up short again.
No question. But 70 million per year. Especially considering that no way he plays that well in the second half of his contract.
His salary might be “more worthy” when you consider that the Dodgers are now the most popular MLB team in Japan due to his popularity over there. It’ll be interesting to see how that’s quantified in terms of jersey sales, social media presence, etc.
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Someone a couple days ago, before he signed the contract, estimated that signing him could bring a team around $50 million per season in additional merchandise sales alone.
I’ll compare it to when the Angels signed Pujols to that (then) massive deal. Even though everyone knew that the back end of that contract would be terrible as it related to his on field performance there was speculation it would more than pay for itself with merchandise sales and marketing. Whether it did or didnt can be argued, but there’s little doubt the Angels got a lot more out of it than anything Pujols did on the field.
I wonder how far into his contract the Dodgers will be when Paul Skenes becomes their ace.
Yeah, the other difference is that Ohtani is 29 right now. When Pujols signed his contract he was 32 (or he soon would have been, depending on exactly what day he signed). Pujols had already started down the backside of his career (although you couldn't know that for sure at the time), whereas the Dodgers are getting at least a couple of years of Ohtani's prime (not withstanding the potential for injury).
He is making $15 million/year more than the Pittsburgh Pirates.
What. Did I need to use the special sarcasm font? We all know. Especially those of us who attended games at Forbes field.
here is a serious question for you tax experts. how does the state income tax for california vs a state with no income tax like Tex or florida effect stuff like this?
So he's making 70m gross a year for a decade. i dont even know what the % is for california, but lets say 15% (Let me know if that's high or low). That's a lot of money.. that's 10m a year in state income tax alone.
now i know it's much more complicated. i dont even know how pro athletes do their taxes. is it in their state they work? Do they pay the taxes of salary earned in other states (away games), etc..
but 10m over a decade long contract is well 100m. So my question, Would 600m over 10 years for the Marlins, rangers or astros be the same as a 700m contract for the dodgers?
And yes, im not worried about this guy, he's ok paying taxes, no need to set up a "go fund me" account for him..
So he's making 70m gross a year for a decade. i dont even know what the % is for california, but lets say 15% (Let me know if that's high or low). That's a lot of money.. that's 10m a year in state income tax alone.
now i know it's much more complicated. i dont even know how pro athletes do their taxes. is it in their state they work? Do they pay the taxes of salary earned in other states (away games), etc..
but 10m over a decade long contract is well 100m. So my question, Would 600m over 10 years for the Marlins, rangers or astros be the same as a 700m contract for the dodgers?
And yes, im not worried about this guy, he's ok paying taxes, no need to set up a "go fund me" account for him..
California has a progressive tax system so he will pay 12.3% on most of the money he makes. PA has a flat tax so he would have paid 3.07% had he signed with the Pirates. Coulda had a nice cheap home in Bethel Park too. Texas and Florida do not have state income taxes.
Athletes pay local (not state) income taxes for days worked in those municipalities. So when the Dodgers come here for 3 days, he will owe the city of Pittsburgh income tax (1%, right?) for the amount of money he made in those 3 days.
Yeah as some are implying, don't view it as a $70 million a year contract. View it as a $20 million a year contract for one of the best hitters in baseball and a free solid starting pitcher (after injury recovery) since about $50 million will be offset from merchandise sales. Amazingly, this still might be quite a bargain for the first half of the contract at least. And the total value of the team if they wish to sell will increase as will season ticket sales.
To some extent, a revenue jump can be permanent. The Houston Rockets remain a very popular team in the NBA years after Yao Ming.
To some extent, a revenue jump can be permanent. The Houston Rockets remain a very popular team in the NBA years after Yao Ming.
The Athletic is reporting that his deferrals are insane, he looked at Bobby Bonilla Day and said "I want some of that". This is someone that wants to win titles.
His (interest free) deferrals have made it so that the Dodgers can win Championships while he's playing. He will only earn $2million per year while playing, then get paid $68 million per year after the contract is over. Crazy stuff.
theathletic.com
His (interest free) deferrals have made it so that the Dodgers can win Championships while he's playing. He will only earn $2million per year while playing, then get paid $68 million per year after the contract is over. Crazy stuff.
Ohtani to defer $68 million per year in arrangement with Dodgers
The structure is intended to provide the Dodgers additional cash flow and payroll flexibility.
theathletic.com
Two thoughts I have on this:The Athletic is reporting that his deferrals are insane, he looked at Bobby Bonilla Day and said "I want some of that". This is someone that wants to win titles.
His (interest free) deferrals have made it so that the Dodgers can win Championships while he's playing. He will only earn $2million per year while playing, then get paid $68 million per year after the contract is over. Crazy stuff.
Ohtani to defer $68 million per year in arrangement with Dodgers
The structure is intended to provide the Dodgers additional cash flow and payroll flexibility.
1. It’s a smart move by the Dodgers/Ohtani but terrible for baseball as a whole. I have a feeling what the next CBA lockout will revolve around.
2. I read that, as long as he isn’t living in California in 2034, the deferred money will not be taxed by the state. Literally saves him hundreds of millions of dollars.
The maximum state tax rate in California is 12.30%. So if true and he moves somewhere that has 0% income tax then the most he can save is $83,640,000. So not literally hundreds of millions of dollars.2. I read that, as long as he isn’t living in California in 2034, the deferred money will not be taxed by the state. Literally saves him hundreds of millions of dollars.
Also inflation is on average 3% per year, so he's losing about 1/3 of that $700million by deferring it by a decade.
Appreciate the clarification. Still, a lot of money saved in taxes! Interesting point about inflation, though.
Absolutely true. And Ohtani knows it, which is why he was willing to structure the contract with so much of the money deferred, according to LA media. He intentionally wanted the leave the Dodgers financial room to sign at least one top of the rotation starter, and perhaps trade for a second.
If you are a free agent starting pitcher, how could you now not be interested in the Dodgers with the heart of the batting order being Mookie Best, Freddy Freeman and Ohtani? One LA sportswriter wrote today that before Ohtani signed the free agent pitcher who was showing the most interest in the Dodgers was Lucas Giolito (who is from LA), but since the deal was announced at least two agents for bigger name free agent pitchers have contacted the team to express their clients’ interest in them.
I’m not sure the tax analysis is correct.Two thoughts I have on this:
1. It’s a smart move by the Dodgers/Ohtani but terrible for baseball as a whole. I have a feeling what the next CBA lockout will revolve around.
2. I read that, as long as he isn’t living in California in 2034, the deferred money will not be taxed by the state. Literally saves him hundreds of millions of dollars.
If you are a California resident, you pay tax on all of your income subject to a credit if it also is taxed in another state.
If you are not a California resident, you still have to pay California income taxes on all income earned in California. Every MLB baseball player pays California income taxes on a pro rata share of his income based on how many games his team played in California during the year. A strong argument can be made IMO that all of Ohtani’s deferred income was earned while he resided in California and therefore is subject to California income taxes.
I'd like to see the economics of that. I have a hard time believing that he will increase the franchise value by more than $700 million. It is ownership vanity, plain and simple.
Having said that, I do wish that Nutting would stop being ok with losing. At least a little bit of pride is needed from a sports franchise owner.
Based on the amount of money the Angels have made in an average year from Ohtani merchandise, there are predictions the Dodgers will make $200 Million to $400 Million in Ohtani merchandise over the length of the contract. That’s not sales; that’s profits.
I'm still not buying it that he will pay for himself. They are already at 85% capacity at Dodger Stadium and most of the seats unsold are the cheap seats. So how many more butts in seats will they get? I can't imagine the local radio and TV rights being affected enough to drive hundreds of millions more in revenue. It will dramatically increase national TV ratings for Dodger games, but that is shared money anyway.
To make this pay off, they will have to raise ticket prices and tv rights dramatically.
He's really losing more if he has a money manager who can perform even at the rate of a conservative index fund. But yeah clever move in terms of helping the Dodgers maintain the payroll that won 100 games, possibly add to it, and also it probably helped them agree to a larger overall number than they would have otherwise.
Some of the math here is pretty fast and loose but it should give an idea.
Even if ticket prices stay the same at an average of $171 (they are already up more than 70%) and he increases ticket sales by 10%, then that's 4,700 per game for an increase in revenue of $803,700. Over the regular season that's $65million just in increased ticket sales. How much does each fan spend on food, parking, merchandise?
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They aren't going to make the money on ticket sales and concessions. I mean yeah, sure, they'll make a little on that. But the big money is in corporate sponsorships. Many of the Angles corporate sponsors were Japanese companies. And that wasn't because the Japanese love Arte Moreno. Those companies are now going to be trying to spend their money with the Dodgers, so they can be an official sponsor of Ohtani's team.
Which is also going to drive up the cost for the American companies that want to deal with the Dodgers, because the Dodgers are going to be able to tell them that if they don't pony up more money they'll be replaced by an equivalent Japanese company.
That's not the difference of selling 1,000 more tickets at $100 a piece. That the difference between a company paying $5 million per season for a sponsorship or paying $10 million per season. Five or six of those and you are talking real money. Money that will pay for that contract.
I saw a funny meme of the Dodgers starting lineup since they are buying everyone:
DH: Ohtani
C: Jesus
1B: Santa
2B: Taylor Swift
3B: Drake
SS: Messi
LF: The Joker (not sure I agree with this one)
CF: Michael Jordan
RF: LeBron
DH: Ohtani
C: Jesus
1B: Santa
2B: Taylor Swift
3B: Drake
SS: Messi
LF: The Joker (not sure I agree with this one)
CF: Michael Jordan
RF: LeBron
