Ohtani Thread - Special Sheriff's Edition (Update: confirmed going to the Dodgers)

[Jays333]

I dont have twitter but was thinking about making one just to tell Morosi that he has lost all and I mean all credibility in the the insider world. I probably am not going to do this but everyone who has a twitter needs to get on their and tell Morosi he may as well retire because nobody will ever believe a single thing he says ever again.

[connorp]

I legit didn't have any idea this was a thing until today. I thought a 10-year 700M contract would be 70M a year for luxury tax purposes for 10 years, regardless of the payout structure/defferals. Absolute ******** if this isn't the case.

 

Bro, are you f***ing serious? lol.. how can you take an issue with large contracts if you don’t know that they often get heavily backloaded and guys are making like $15m a year towards the cap

[Jimcanuck]

That’s a pretty big loophole if true, and completely goes against the whole point of the luxury tax

 

Not a loophole at all, but normal accounting practice. The deal is not 10/700, with the deferrals and accounting for the time value of money, the deal is closer to 10/600

[hanton]

I dont have twitter but was thinking about making one just to tell Morosi that he has lost all and I mean all credibility in the the insider world. I probably am not going to do this but everyone who has a twitter needs to get on their and tell Morosi he may as well retire because nobody will ever believe a single thing he says ever again.

 

him and dodgers nation J.P. Hoornstra are getting s*** on. I mean were talking about the horses mouth here these aren't some random twitter hacks

[connorp]

Its is. It counts towards luxury tax. But in reality, Dodgers aren’t paying 250 mil + the tax. They’re paying like 150 mil + the tax.

 

I think this is wrong. I’ll fact check it myself before bedtime

[Jimcanuck]

No I just have a problem with people thinking they deserve special treatment because of their gender, race, religion, or sexual preference.

 

They don't, they want to be treated the same as everyone else. Did you know it is legal to fire someone for being gay, in many US states?

[L54]

That’s a pretty big loophole if true, and completely goes against the whole point of the luxury tax

 

Agreed completely

[L54]

They don't, they want to be treated the same as everyone else. Did you know it is legal to fire someone for being gay, in many US states?

 

Stfu nobody cares about this Jim

[L54]

Bro, are you f***ing serious? lol.. how can you take an issue with large contracts if you don’t know that they often get heavily backloaded and guys are making like $15m a year towards the cap

 

Who is this happening with? I sincerely do not know of one example

[Rusty_Savage]

It doesn’t lower the luxury tax at all. Not even a dime. All it does is give them more cash currently to spend more to improve the roster. Every team has a certain amount of capital earmarked for current liabilities and a certain amount for debt servicing. All the deferrals do is shift the money owed from current to long term debt service.

 

As an accountant I’ve seen corporations do this every day as a way of shifting tax liability.

You're an accountant now too? Add that to mayor, fire fighter, nurse and Train engineer. You're still a putz

 

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[max silver]

That’s a pretty big loophole if true, and completely goes against the whole point of the luxury tax

 

Damn I can't see why MLB should allow this be approved. Hopefully other teams raise enough of a stink with the commissioner's office to see this kiboshed/reworked so that it actually follows the spirit of the luxury tax.

[mikepelfrey]

Not a loophole at all, but normal accounting practice. The deal is not 10/700, with the deferrals and accounting for the time value of money, the deal is closer to 10/600

 

Exactly. This is known as “the time value of money” 1 dollar today is worth considerably more than 1 dollar you receive in 5 years.

[BigCecil]

Nah. The best player since Babe Ruth gave us a legit shot and it took an unfathomable offer from one of the league’s best franchises to stop him from signing here. I still like him and wish him well.

 

We don't really know that it was a legit shot. He went to the facility. So did Liam Hendriks when he was a FA.

 

There was tons of speculation, and a lot of ******** even from so called trusted sources. Pie charts of probabilities odds etc.

 

Rogers execs wanted him and made, for them, a big push. Props to them. But for all of any of us really know, his Agent was just setting up negotiating straw man (other teams were probably a part of it too) to up the amount of an LAD eventual deal. And it worked.

 

We'll can only surmise.

[connorp]

Who is this happening with? I sincerely do not know of one example

 

Tatis as an example was backloaded to avoid luxury tax. Other SD just too I believe. Machado etc

[Jimcanuck]

Damn I can't see why MLB should allow this be approved. Hopefully other teams raise enough of a stink with the commissioner's office to see this kiboshed/reworked so that it actually follows the spirit of the luxury tax.

 

It's normal practice. Any team can do the same. If Ohtani has agreed to defer $200M to be paid out after the contract terminates in 10 years, that $200M is worth $130M (guesstimating) today.

[connorp]

It’s also why SD gave Darvish so many years. LT is based on your yearly payroll I’d wager

[L54]

Tatis as an example was backloaded to avoid luxury tax. Other SD just too I believe. Machado etc

 

Backloaded does not equal deferred payments though

[connorp]

I’m erasing all my posts lol.

[connorp]

Backloaded does not equal deferred payments though

 

There’s deferred examples. I mistakingly thought the salary for the year was what luxury tax was based on, but it’s not

 

Recently $75m was deferred wtih Devers

[mikepelfrey]

I can’t help it if you forgot I worked at the IRS for 27 years and was a Revenue Canada liaison for 5 of them. As for you thinking I’m a putz, who cares, while you were living in your mama’s basement I was studying my butt off at Hofstra University.

 

You get what you pay for.

[L54]

There’s deferred examples. I mistakingly thought the salary for the year was what luxury tax was based on, but it’s not

 

Recently $75m was deferred wtih Devers

 

Nobody is arguing the yearly salary is the luxury tax calculation it’s the AAV

 

My assumption was Ohtani’s luxury tax hit would be 70M/year

 

If it’s 40M like Passan says…. That’s a huge difference. But at least Cincinnati and St. Louie get a competitive balance pick!!

[mikepelfrey]

It's normal practice. Any team can do the same. If Ohtani has agreed to defer $200M to be paid out after the contract terminates in 10 years, that $200M is worth $130M (guesstimating) today.

 

Jim, basically you’re correct. It depends on the interest rate you get on the money you invest, if you invest at 5% the current value lower than if you invest at 10%

 

It’s interesting that MLB has its own way of calculating and assessing the taxes, that I wasn’t aware of….. it gives the topic a whole new wrinkle, which is why every team has financial guru’s nowadays. They must earn their money for sure

[Grant77]

I can’t help it if you forgot I worked at the IRS for 27 years and was a Revenue Canada liaison for 5 of them. As for you thinking I’m a putz, who cares, while you were living in your mama’s basement I was studying my butt off at Hofstra University.

 

You get what you pay for.

 

This is a little hard to believe considering you are 39 years old.

[Jimcanuck]

Jim, basically you’re correct. It depends on the interest rate you get on the money you invest, if you invest at 5% the current value lower than if you invest at 10%

 

Life cycle costing on engineering projects was a regular activity, for years

 

Also while in high school won the City of London student accounting championship

[Rusty_Savage]

Life cycle costing on engineering projects was a regular activity, for years

 

Also while in high school won the City of London student accounting championship

Mike, on the other hand moonlights as a train engineer

 

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[mikepelfrey]

I’m 66, I guess you forgot that too, it’s why I don’t mind you calling me a putz, it’s probably pretty dark and lacking ventilation in your mama’s basement, so I consider the source.

 

Is your real name Kenny..? If so it explains a lot. If so you haven’t learned anything since we last conversed.

 

Do yourself a favor. Hang out with JimCanuck, maybe some of his obvious intelligence will rub off on you. Lord knows you need it.

[Jimcanuck]

Mike, on the other hand moonlights as a train engineer

 

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Legally in Ontario they aren't supposed to use that term, but Professional Engineers Ontario hasn't bothered with it

[max silver]

Life cycle costing on engineering projects was a regular activity, for years

 

Also while in high school won the City of London student accounting championship

 

That quite literally sounds like the most boring championship in the history of championships.

[Jimcanuck]

That quite literally sounds like the most boring championship in the history of championships.

 

It was a 3 hr test in a roomful of nerds

[John_Havok]

It doesn’t lower the luxury tax at all. Not even a dime. All it does is give them more cash currently to spend more to improve the roster. Every team has a certain amount of capital earmarked for current liabilities and a certain amount for debt servicing. All the deferrals do is shift the money owed from current to long term debt service.

 

As an accountant I’ve seen corporations do this every day as a way of shifting tax liability.

 

The luxury tax in MLB has nothing to do with individual or corporate tax though.