With Their contract extension of $ 500 million over 14 yearsVladimir Guerrero Jr. and the Blue Jays de Toronto would have performed a feat of creative accounting that would even blush the Los Angeles dodgers.
The last MLB mega-deal contains a signing bonus of $ 325 million, according to Ken Rosenthal of athleticsExcept that it is not really a signature bonus by any definition that sports fans have learned. Rather than paying the 25 -year -old woman for almost a third of a billion dollars in advance, the Blue Jays will pay him by an annual variable amount over the 14 years of the contract.
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Consequently, Guerrero will obtain $ 175 million in salary and almost twice as much in “signature bonus”, the team taking an annual blow on luxury tax of $ 35.71 million.
Why would Vladimir Guerrero Jr. and the Blue Jays do this?
Per Rosenthal, there are two advantages for Guerrero:
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The signature bonuses are allocated to the state of residence of an athlete. Given that he lives in Florida, a state without income tax, this theoretically means that it will save millions which would normally be taxed within the framework of his salary. MLB players are generally taxed depending on where they play, so that players in Florida would not see tax for home matches but would pay New York taxes on road matches played in New York (and Illinois taxes on Chicago games, etc.). This configuration means that much more of Guerrero's money is treated as if it were paid in Florida.
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Signature premiums are not subject to the actual performance of the services, which means that Guerrero will always be paid for the majority of his contract in the event of a work stoppage. The current collective agreement of MLB expires after the 2026 season, and a locking of a duration seems to occur.
As for the Blue Jays, there seems to be one and only one advantage of doing it:
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Guerrero agrees to sign the piece of paper.
Vladimir Guerrero Jr.'s agreement is complicated, differently from that of Shohei Ohtani. (Photo of Mark Blinch / Getty Images)
(Mark Blinch via Getty Images)
The easy reaction is to compare this agreement to the $ 700 million contract with Dodgers, but Guerrero and Blue Jays have mainly done the opposite.
Ohtani agreed to postpone this money to reduce their luxury shot by $ 70 million to around $ 46 million and help Dodgers sign more players at their personal costs. His considerable approval income allows him to wait. On the other hand, Guerrero's signature bonus seems to help only Guerrero, without hurting Toronto too much.
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You can only wonder if other teams could start doing this kind of thing as long as it is legal.
It has become somewhat in vogue for players to receive both a large signature bonus and a significant postponement. The signature bonus gives them large sums of money in advance, which they prefer, while the money paid later maintains their CBT number lower than what should be, that the teams prefer. The dodgers did that with The $ 182 million agreement Blake Snellwhich had a signature bonus of $ 52 million and 66 million dollars deferred.
All this is unnecessarily complicated, but the result is that the teams and the players have ways to help each other while making nine -digit commitments towards each other. The Blue Jays were in pain in GuerreroThey therefore accepted the thing that lowered its tax responsibility and protected their money.
Now, Blue Jays fans can relax and enjoy another decade of A player who could find himself everywhere in franchise records.
