Harper To Phillies

[TheLeviathan]

I suspect after the next CBA, Harper's annual salary is going to be at the low end of top tier free agents and extension candidates.

 

Assuming we're playing baseball after the next CBA.

Assuming a CBA happens at all at this point....

[Otto von Ballpark]

[nicksaviking]

He picked poorly. I offered him a 10 year deal to blow out my driveway for $20 a snow with a $5 mutual option to scrape my windshield.

[ashbury]

He picked poorly. I offered him a 10 year deal to blow out my driveway for $20 a snow with a $5 mutual option to scrape my windshield.

He was probably afraid you would outright him to Rochester where they get 10 feet of snow a year.

[Mike Sixel]

They've sold 180000 tickets since the signing. Over 2000 per home game.

 

At forty dollars per fan, counting tickets and stuff, that's 7.2 million..... So, knock that off the salary total already.

[ashbury]

They've sold 180000 tickets since the signing. Over 2000 per home game.

 

At forty dollars per fan, counting tickets and stuff, that's 7.2 million..... So, knock that off the salary total already.

7 down, 323 to go. It's a marathon, not a sprint.

[jctwins]

An interesting take in today's LA Times at the differential in state income tax between the California teams (13.3% state tax rate), and the Phillies (3% tax rate). 

 

At 10% over 13 years, that's significant to the net.

[Otto von Ballpark]

 

An interesting take in today's LA Times at the differential in state income tax between the California teams (13.3% state tax rate), and the Phillies (3% tax rate). 

 

At 10% over 13 years, that's significant to the net.

Thanks for the tip. Here's the link, for those interested:

 

https://www.latimes.com/politics/la-pol-ca-skelton-income-tax-20190307-story.html

 

Since taxes are based on where each game is played (home/road), the overall effect is less than 10% of the contract. (Even Boras suggests it's only 7% or less here.) And that's assuming the player never gets traded, and doesn't have any creative methods of lowering his tax burden. For these big contracts, I don't think <10% is that significant, and is almost certainly overshadowed by other factors. Heck, the agent's commission alone is likely the same as this tax difference -- but players generally aren't negotiating for themselves or bargain shopping for new agents.

 

Has there ever been a credible report that a player turned down a higher offer due to taxes? I know sometimes they prefer AAV to total value, or going to a contender, or getting an opt-out or NTC, etc. That doesn't mean Boras and others won't attempt to use it in negotiations, of course, but if it's really important as they suggest, I'd expect to see it in some real-world examples.

 

If the offers were flipped here, and the California team offered a record 13/330 and the Phillies only offered 12/312, I'm pretty sure Harper/Boras takes the California offer, every time, taxes be damned.

[jctwins]

 

Thanks for the tip. Here's the link, for those interested:

 

https://www.latimes.com/politics/la-pol-ca-skelton-income-tax-20190307-story.html

 

Since taxes are based on where each game is played (home/road), the overall effect is less than 10% of the contract. (Even Boras suggests it's only 7% or less here.) And that's assuming the player never gets traded, and doesn't have any creative methods of lowering his tax burden. For these big contracts, I don't think <10% is that significant, and is almost certainly overshadowed by other factors. Heck, the agent's commission alone is likely the same as this tax difference -- but players generally aren't negotiating for themselves or bargain shopping for new agents.

 

Has there ever been a credible report that a player turned down a higher offer due to taxes? I know sometimes they prefer AAV to total value, or going to a contender, or getting an opt-out or NTC, etc. That doesn't mean Boras and others won't attempt to use it in negotiations, of course, but if it's really important as they suggest, I'd expect to see it in some real-world examples.

 

If the offers were flipped here, and the California team offered a record 13/330 and the Phillies only offered 12/312, I'm pretty sure Harper/Boras takes the California offer, every time, taxes be damned.

 

I'm not suggesting it is a primary factor, but half of your games are played at home. 

 

I think if anything it just illustrates in part that there is an artificial inflation of payroll of 5-7% in NY and CA because of state taxes. 

 

You bet an agent is going to pin down every line item to maximize the net value to his client. That's his job.

 

I don't see how there is any creativity with your player contract, but it's the endorsements where you run an entity out of a low-tax state, such as Florida. You buy a condo to set up a residence there and all of your endorsement income pays to that state.

[cardsfan]

At the ASG last year Harper was hitting .214. He ended at .249. The year before he missed 40 games. The year before that below .250. Once in a generation? Watching the Pillies get burned again.

 

Wait to see when he is hitting .200 the first 2 months and striking out on a pace that would make Ryan Howard proud. Those fans will be throwing batteries.

[Tomj14]

 

If the offers were flipped here, and the California team offered a record 13/330 and the Phillies only offered 12/312, I'm pretty sure Harper/Boras takes the California offer, every time, taxes be damned.

Considering you play half the games at home half the annual salary would be at that home state rate. about 1.7 million a year in Cali, and 400K in Penn (if the 3 and 13.3% are correct)

Taking the Philly offer even with one less year and 18 million less, would result in more money in one less year than taking the a Cali team offer. So it if was about the money taking Cali teams offer is foolish. And if the agent doesn't explain that to the player he isn't doing his job.

[Otto von Ballpark]

 

Considering you play half the games at home half the annual salary would be at that home state rate. about 1.7 million a year in Cali, and 400K in Penn (if the 3 and 13.3% are correct)

Taking the Philly offer even with one less year and 18 million less, would result in more money in one less year than taking the a Cali team offer. So it if was about the money taking Cali teams offer is foolish. And if the agent doesn't explain that to the player he isn't doing his job.

I understand that. But like I said, I don't think taxes are as big of a factor as that article implies. Harper/Boras wanted the record contract (and probably just the highest total dollar value they could get), more than they wanted the highest after-tax income.

 

That they only got the highest/record offer from a lower-tax state was probably coincidental.

[Otto von Ballpark]

 

I don't see how there is any creativity with your player contract

I suspect they've got some deductions and such. The agent's fee, for starters.

[Otto von Ballpark]

 

You bet an agent is going to pin down every line item to maximize the net value to his client. That's his job.

Sure, they're aware of it. They almost certainly use it in negotiations too, like I said.

 

But I doubt that "maximum net" is the most important thing to these guys, at this level. Maybe for guys on smaller contracts where the money has more utility, but for a guy like Harper and anyone on $100+ mil deals, they've got money to burn regardless of what state tax they pay. I'm guessing they ultimately prefer the prestige of getting a higher reported value (which the agents and union prefer too), playing with a contender, etc.

 

I haven't seen much evidence of a player ever taking less total money (edit: gross salary) on a big contract to play in a lower tax state (at least, where there weren't other compelling reasons for them to do so). That suggests it's less of a factor than articles like these might imply -- that's all I'm saying.

[jctwins]

 

I suspect they've got some deductions and such. The agent's fee, for starters.

 

This line item was actually specifically excluded under 2018 tax reform. 

 

It was logical in the past to assume that the player would deduct the agent fee as an expense, but it was used as an offset to add some revenue back under the lower tax rates.

[jctwins]

 

Sure, they're aware of it. They almost certainly use it in negotiations too, like I said.

 

But I doubt that "maximum net" is the most important thing to these guys, at this level. Maybe for guys on smaller contracts where the money has more utility, but for a guy like Harper and anyone on $100+ mil deals, they've got money to burn regardless of what state tax they pay. I'm guessing they ultimately prefer the prestige of getting a higher reported value (which the agents and union prefer too), playing with a contender, etc.

 

I haven't seen much evidence of a player ever taking less total money (edit: gross salary) on a big contract to play in a lower tax state (at least, where there weren't other compelling reasons for them to do so). That suggests it's less of a factor than articles like these might imply -- that's all I'm saying.

 

Fair enough, and I'm not necessarily disagreeing. But to your point, with the guys that are living on a good portion of the income, which at even 2 to 3 million a year, they are, that difference of around 10% or even more could make a big difference.

[Otto von Ballpark]

Discussion of the tax article here suggests there is also a 4% *city* income tax in Philadelphia, which would close the gap further:

 

http://www.baseballthinkfactory.org/newsstand/discussion/la_times_bryce_harper_will_save_tens_of_millions_in_taxes_by_spurning_dodge/

[cardsfan]

I wonder how often he will see a 4 man outfield. Last year the shift may have vost him 13 hits.