Bruce Sutter RIP

[revo]

The Hall of Fame closer was 69

[rink23]

Unfortunate as he helped change the game.
He didn't look good at Opening Day 2022 for the Cardinals, and didn't make any other appearances at the ballpark this season.
That includes the weekend the 1982 World Series team was recognized.
He had long been a regular when the Red Jackets (Cardinals Hall of Famers) were trotted out.

[dsvitak]

Originally Posted by rink23

Unfortunate as he helped change the game.
He didn't look good at Opening Day 2022 for the Cardinals, and didn't make any other appearances at the ballpark this season.
That includes the weekend the 1982 World Series team was recognized.
He had long been a regular when the Red Jackets (Cardinals Hall of Famers) were trotted out.

I met Sutter a couple of times, back in the mid '80's. Seemed to be a nice guy.

[Leo_The_Lip]

Originally Posted by rink23

Unfortunate as he helped change the game.
He didn't look good at Opening Day 2022 for the Cardinals, and didn't make any other appearances at the ballpark this season.
That includes the weekend the 1982 World Series team was recognized.
He had long been a regular when the Red Jackets (Cardinals Hall of Famers) were trotted out.

Much more than mere baseball, his contract with the Turner Braves changed the tax code and FASB standards (that is what guides SEC filings).

Sutter did NOT sign with the Braves. He signed a Personal Services contract with Ted Turner, who then made that 'personal service' pitching for the Braves. This was troubling to MLB and the IRS, but for differnet reasons.

I'll expand on that later when I have more time.

[Déjà Bru]

Bruce was one of the few Bruces who gave masculine dignity to the name Bruce. Otherwise, Bruce is associated with hairdressers.

Signed, Bruce

[Leo_The_Lip]

Remember the ABA? They tried to compete for rookies by using annuity contracts to fund long term signings with players like Marvin Barnes. The trick was to announce a, say fifteen year, $45 million contract saying it was for $3 million per year, a large amount in the early 1970s. In fact, the annuity contract cost far less that $45 million, as little as 4 or 5 (I doubt anyone could run the numbers accurately on the historic rates).

The team could take a tax deduction for the full cost of the annuity, producing a current tax deduction in excess of the first year (or two's) salary. The team wins (did they?) the player's money is guaranteed by the insurance company (if it doesn't go broke). Lastly the team has no real salary obligation in the following years.

We all know the ABA went broke through various mis-management issues and the other team sport leagues banned this practice, not wanting to be the next ABA. The IRS said, "it is not against the law (tax code) so fine. For now."

However, the Securities and Exchange Commission began to think otherwise. They were concerned that current and future obligations were not accurately depicted. That is what the Financial Accounting Standards Board was thinking, but did not have the reasons to object. Yet.

[Leo_The_Lip]

So with annuities off the table, teams looked more to the (then) acceptable practice of capitalizing long term contracts. This produced the same tax effect as described above, but without the protection (to the player) of a fully funded annuity contract. The teams shrugged, but the player unions grew nervous.

Then came Ronald Regan, who cut taxes. Wonderful for common people like you and me, not so good for sports teams (and others) who now had their tax savings slashed so that capitalizing contracts looked a whole lot less beneficial to the guys running the numbers (me, for example).

In addition, this practice left less 'future income' to shield from the team's tax filings. What to do?

Short answer, the teams' owners had lots more income to shield, so how to transfer these lovely capitalized contracts to them?

[Leo_The_Lip]

First to clarify. The capitalized assets were being depreciated exactly like big ticket durable items such as stadiums and training complexes.

In the early 1980's sports were coming to grip with free agency and had not formulated new strategies to fund these multi-year contracts over time.

[pilight]

Of course he lived just long enough to collect the final balloon payment that ended his Braves contract

[pilight]

Originally Posted by Déjà Bru

Bruce was one of the few Bruces who gave masculine dignity to the name Bruce. Otherwise, Bruce is associated with hairdressers.

Signed, Bruce

Lee? Willis? Springsteen? Robert the? I don't think the world is lacking manly Bruces.

[GeoWar]

A talent -

[Syd Thrift]

Originally Posted by Leo_The_Lip

Remember the ABA? They tried to compete for rookies by using annuity contracts to fund long term signings with players like Marvin Barnes. The trick was to announce a, say fifteen year, $45 million contract saying it was for $3 million per year, a large amount in the early 1970s. In fact, the annuity contract cost far less that $45 million, as little as 4 or 5 (I doubt anyone could run the numbers accurately on the historic rates).

The team could take a tax deduction for the full cost of the annuity, producing a current tax deduction in excess of the first year (or two's) salary. The team wins (did they?) the player's money is guaranteed by the insurance company (if it doesn't go broke). Lastly the team has no real salary obligation in the following years.

We all know the ABA went broke through various mis-management issues and the other team sport leagues banned this practice, not wanting to be the next ABA. The IRS said, "it is not against the law (tax code) so fine. For now."

However, the Securities and Exchange Commission began to think otherwise. They were concerned that current and future obligations were not accurately depicted. That is what the Financial Accounting Standards Board was thinking, but did not have the reasons to object. Yet.

I mean, these didn't exactly go away. Bobby Bonilla's buyout was essentially also a Dolgoff Plan - the Mets put the money in a kitty. let it grow on its own, and paid Bonilla a lot less over time than if he'd have just kept onto the original contract and invested himself (well, at least that was the idea before 2008). If they don't happen anymore I think it's mostly because they look way more spendy than they really are and also ever since the Great Recession the world economy just doesn't grow the way that it used to.

[Déjà Bru]

Originally Posted by pilight

Lee? Willis? Springsteen? Robert the? I don't think the world is lacking manly Bruces.

Don't forget Bruce Wayne, albeit fictional. Though that's about the lot, I am afraid.

[dsvitak]

Originally Posted by Syd Thrift

I mean, these didn't exactly go away. Bobby Bonilla's buyout was essentially also a Dolgoff Plan - the Mets put the money in a kitty. let it grow on its own, and paid Bonilla a lot less over time than if he'd have just kept onto the original contract and invested himself (well, at least that was the idea before 2008). If they don't happen anymore I think it's mostly because they look way more spendy than they really are and also ever since the Great Recession the world economy just doesn't grow the way that it used to.

The buying power of Bonilla's annual check has been smashed. Probably by more than half. A lot more.

[fredbeene]

RIP all elite contract talks.
thanks bruce for wonderful years of feared reliever on some crappy clubs.
so much death and destruction : ((

[Leo_The_Lip]

Originally Posted by Syd Thrift

I mean, these didn't exactly go away. Bobby Bonilla's buyout was essentially also a Dolgoff Plan - the Mets put the money in a kitty. let it grow on its own, and paid Bonilla a lot less over time than if he'd have just kept onto the original contract and invested himself (well, at least that was the idea before 2008). If they don't happen anymore I think it's mostly because they look way more spendy than they really are and also ever since the Great Recession the world economy just doesn't grow the way that it used to.

Thanks for reading all this, Syd. I'm not close to being done with all this, and hope to show you that this is no Dolgoff Plan and, in fact, caused the IRS and SEC to change the world for Big Business--thus creating an impact on far more than baseball or the rest of the sporting life.

[Leo_The_Lip]

Along came Ted Turner, whom I hope all of you remember. Turner first began to irritate MLB by creating his Super Station which took his local Atlanta broadcast rights and made them nationally available through cable contracts. Not the subject of my discussions, but the history of TBS is worthy of its own thread.

As I posted above, Turner signed Sutter to a Personal Services contract and made that service pitching for the Braves. So what?

Several things. It meant Sutter's salary expense wasn't part of the Braves tax return. It was part of TBS's return. (Likely more complicated in a consolidated return kind of way--the ways Trump is confusing things right now, but not as horrific or criminal). essentially, the Braves were a crappy team and losing money, so there was very little income to shelter with a (the) legal tax scheme. So moving it to Ted Turner's own tax return (probably) made sense in a tax minimization way.

Further, the Players' union grew nervous because this was not an MLB contract, thus potentially outside its bargaining rights. Was this a clever way of union busting for star players?

[Leo_The_Lip]

MLB, as always, was slow and indifferent in responding.

But the sensation of what Turner had done drew the attention of the true big dogs in the room--the IRS and the SEC.

These agencies really weren't all that interested in the financial small potatoes of baseball. They were already looking at what they considered dodgy tax and financial reporting schemes already being done in corporate America. The Turner-Sutter contract shown a brief, small flashlight on these practices, then the government switched on the Klieg lights.

A quick note/rebuttal of Syd's Dolgoff Plan comment. A Personal Services contract and an insurance funded plan have nothing in common and these differences are central to the confusion for regular folks.

[Leo_The_Lip]

The effect of all this on 'working stiffs' like Bruce Sutter and other sports figures is small. That is because we are all 'cash basis' not 'accrual' tax accounting types. Companies are accrual basis.

When you get paid, that's when you earn the money and that's the year shown on your W-2. When the company deposits your monthly pay check on January 7, it shows up on your current year's W-2, not the one you get a couple weeks later. The company however must split those checks between the prior year expense and the 7 days you worked in the current year.

Again, so what?

Enter pension plans.

[Amazin69]

Originally Posted by Déjà Bru

Don't forget Bruce Wayne, albeit fictional. Though that's about the lot, I am afraid.

Let's not forget All-American Gold Medal-winning Wheaties™ Box Cover Bruce Jenner. His de-Brucing 40 years later is somewhat irrelevant; the use of "Bruce" as a stereotypical homosexual name was a Nixon-era thing, and the future Caitlin helped put misconception to rest, just as much as the Boss and Willis did.

Also NFL career sack leader Bruce Smith, I should think. (I wonder how often he got past Patriots tackle Bruce Armstrong during New England-Buffalo games?)