Blue Jays sign George Springer to a 6 year, $150M deal

[max silver]

That doesn't make sense.

 

Rogers is paying him $32M in 2021. If anything, the huge total outlay in 2021 takes away from other possible spending.

 

It's possible Rogers will view that as separate from regular payroll. There has to be some sort of inherent benefit for the team to dishing out this kind of bonus vs simply designating a $32 million salary, or why would they bother?

[connorp]

It's possible Rogers will view that as separate from regular payroll. There has to be some sort of inherent benefit for the team to dishing out this kind of bonus vs simply designating a $32 million salary, or why would they bother?

 

Could’ve been requested. If it was the team thinking of their benefit, it would be to have more payroll flexibility in the later years

[G-Snarls]

I like the breakdown

 

Clearly designed with the ability to keep available for future payroll needs

[Laika]

It's possible Rogers will view that as separate from regular payroll. There has to be some sort of inherent benefit for the team to dishing out this kind of bonus vs simply designating a $32 million salary, or why would they bother?

 

If it's a straight $32M then Springer gets it in monthly or bi-weekly instalments during the season. The signing bonus lets him buy a yacht right now, no financing. So it's better for Springer.

[G-Snarls]

I like the initial signing bonus with only $22 million outlay in 2021, that leaves a little more payroll space for extra additions.

 

Like Trevor Bauer?

[max silver]

Could’ve been requested. If it was the team thinking of their benefit, it would be to have more payroll flexibility in the later years

 

I did some digging around, and it appears as though the signing bonus may be spread over the length of the contract. So if I'm correct Springer is making $32 million in 2021 combined, but due to the AAV the luxury tax counted salary is only $25 million. This is only really of use to a team planning to spend to the luxury tax though, so it could certainly be Springer wanting a nice up front payment.

[connorp]

Yeah the $10m is for Springer benefit only. The only time I wonder if it matters would be if a team was facing the luxury tax threshold. Don’t know if you could circumvent that somehow with a bonus. All the other leagues have super confusing cap rules, it’s hard to keep track

[G-Snarls]

I did some digging around, and it appears as though the signing bonus may be spread over the length of the contract. So if I'm correct Springer is making $32 million in 2021 combined, but due to the AAV the luxury tax counted salary is only $25 million. This is only really of use to a team planning to spend to the luxury tax though, so it could certainly be Springer wanting a nice up front payment.

 

Yeah

 

Jays are not going near the luxury tax threshold so it won't matter in that regard

[connorp]

I did some digging around, and it appears as though the signing bonus may be spread over the length of the contract. So if I'm correct Springer is making $32 million in 2021 combined, but due to the AAV the luxury tax counted salary is only $25 million. This is only really of use to a team planning to spend to the luxury tax though, so it could certainly be Springer wanting a nice up front payment.

 

Yeah that’s what I was thinking. I don’t know how it works but you would think Mets could pull some s*** with Cohens money.

[EZe]

Makes it more tradeable on the back half

[glory]

As a point of reference regarding the signing bonus, here is how they did Grichuk's contract (which had a $5m bonus):

 

5 years/$52M (2019-23)

$5M signing bonus, paid in $1M installments on 7/1/19, 10/1/19, 4/1/20, 7/1/20 and 4/1/21

19:$7M, 20:$12M, 21-23:$9,333,333 annually

[Jimcanuck]

Yeah the $10m is for Springer benefit only.

 

Mutual benefit

[connorp]

Mutual benefit

 

Don’t see how it benefits Jays in any way vs giving him $32m spread out. You can enlighten me though

[Jimcanuck]

Don’t see how it benefits Jays in any way vs giving him $32m spread out. You can enlighten me though

 

The 2021 payout is $32M, 2022 is $28M. Increases payroll flexibility for the team in future years to retain the core. For luxury tax considerations, a separate matter and probably a non-issue for the Jays, the total amount is spread over the term, at least according to Max.

[Jays24]

Mutual benefit

 

I would say it's more to the benefit of Springer. If it were up to him, he'd take the entire 150 million up front. Trading him becomes easier but that's also at the expense of the money of you had already paid him. You could always pay down a contract later as part of a trade if needed in the worst case.

[Jays24]

The 2021 payout is $32M, 2022 is $28M. Increases payroll flexibility for the team in future years to retain the core. For luxury tax considerations, a separate matter and probably a non-issue for the Jays, the total amount is spread over the term, at least according to Max.

 

Agree with the first part. Jays have yearly budgets and this will give us 2.5 million more to use for future years. We are never coming close to the luxury tax so that points moot lol.

[Jimcanuck]

I would say it's more to the benefit of Springer. If it were up to him, he'd take the entire 150 million up front. Trading him becomes easier but that's also at the expense of the money of you had already paid him. You could always pay down a contract later as part of a trade if needed in the worst case.

 

Yes, mostly Springer benefit, obviously. I was responding to connorp saying its only for Springer benefit.

 

Everyone here knows it was in the Jays interest, given where the team is, to frontload.

[Jimcanuck]

Agree with the first part. Jays have yearly budgets and this will give us 2.5 million more to use for future years. We are never coming close to the luxury tax so that points moot lol.

 

Maybe not, who knows about the new CBA and what Rogers plans to do with what is right now their prize asset.

[connorp]

The 2021 payout is $32M, 2022 is $28M. Increases payroll flexibility for the team in future years to retain the core. For luxury tax considerations, a separate matter and probably a non-issue for the Jays, the total amount is spread over the term, at least according to Max.

 

Bro.. we were taking about the $10m. I get why front loading benefits (or can benefit) the team

[Grant77]

The signing bonus makes this better for Springer, but it's a net positive for Jays fans when contracts are frontloaded. It's a strong sign to me that they intend to spend big in the future as well.

[Laika]

Someone on Twitter says the bonus for Springer gets taxed at effectively his US rate. Interesting.

[max silver]

Someone on Twitter says the bonus for Springer gets taxed at effectively his US rate. Interesting.

 

From a quick lookup, assuming that Springer resides in Connecticut, state income tax maxes out at 6.99% vs 13.16% for Ontario, so that's a nice difference on its own. Federal tax rates between the two countries look to be similar, with Canada maxing out at 33% vs 37% in the US. If my thinking is correct combined Springer would pay about 46% total tax in Ontario vs 44% in the US, so it's maybe not that big of a difference either way.

[Laika]

From a quick lookup, assuming that Springer resides in Connecticut, state income tax maxes out at 6.99% vs 13.16% for Ontario, so that's a nice difference on its own. Federal tax rates between the two countries look to be similar, with Canada maxing out at 33% vs 37% in the US. If my thinking is correct combined Springer would pay about 46% total tax in Ontario vs 44% in the US, so it's maybe not that big of a difference either way.

 

His State of residence for tax purposes is likely Texas

[max silver]

His State of residence for tax purposes is likely Texas

 

That certainly could be the case, my assumption was based on articles that listed Connecticut as "home" for Springer, which could simply be referencing that he grew up there. Texas certainly changes things dramatically for him, that changes to 37% federal + 0% state income tax, vs. the combined 46% in Ontario.

[connorp]

That certainly could be the case, my assumption was based on articles that listed Connecticut as "home" for Springer, which could simply be referencing that he grew up there. Texas certainly changes things dramatically for him, that changes to 37% federal + 0% state income tax, vs. the combined 46% in Ontario.

 

A lot of these guys have second homes and such too. I’ve read about NY players claiming FL residency (also state tax free). You just have to claim you’re there enough to be your primary residence. Also, let’s be real, the rich players aren’t paying 37% federal. Not the smart ones anyway.

[connorp]

Oh shoot I forgot there were some tax changes for professional athletes. Forget the details though but they cut tax loopholes somehow.

[jerb]

 

Ben Nicholson-Smith

@bnicholsonsmith

 

#BlueJays will officially introduce George Springer on a conference call with Mark Shapiro, Ross Atkins & Charlie Montoyo at 1pm ET this Tuesday

[jaysguy44]

 

Ben Nicholson-Smith

@bnicholsonsmith

 

#BlueJays will officially introduce George Springer on a conference call with Mark Shapiro, Ross Atkins & Charlie Montoyo at 1pm ET this Tuesday

 

Covid sucks

[Spanky99]

Makes it more tradeable on the back half

 

This.

[Carlos Danger]

Someone on Twitter says the bonus for Springer gets taxed at effectively his US rate. Interesting.

 

Bonuses in the US are considered supplemental income. The first million is 22% then 37% Federal for anything over a million. A bonus is also taxed on state of residence, regardless where the employer is.

 

If you buy a house or pay off a large chunk of a house, or pre- pay your property taxes, with your bonus, you can deduct that amount off your total tax liability as well as other write offs.