MLB 2023-24 Off season thread

[TheMaus2]

Apparently the big deferred money was on the table with all prospective teams, so 29 other teams could have possibly done a similar salary structure to get him... and something like 3ish teams were actually interested in paying that kind of money for Japanese Babe Ruth. feels a bit ludicrous that bidding wasn't as competitive, especially when there are at least 10 teams who could have absorbed that $46m/y cap number and still had the cash to compete. Infinitely funnier that he ended up on the death star team I suppose

[thehef]

Originally Posted by TheMaus2

Apparently the big deferred money was on the table with all prospective teams, so 29 other teams could have possibly done a similar salary structure to get him... and something like 3ish teams were actually interested in paying that kind of money for Japanese Babe Ruth. feels a bit ludicrous that bidding wasn't as competitive, especially when there are at least 10 teams who could have absorbed that $46m/y cap number and still had the cash to compete. Infinitely funnier that he ended up on the death star team I suppose

Do we know that there wasn't another team or two that offered a similar deal? I mean, if all of the other teams apparently among the finalists - Angels, Jays, Giants, Cubs - offered the same deal, it would not be surprising that he'd still choose the Dodgers. After all, he doesn't have to move and would be joining a team with a significantly better record of success, proven farm system, solid medical/rehab staff, etc...

[rudel.dietrich]

I have a feeling like MLB is going to crack down on these types of contracts in the future.

Let's say in 13 years time another COVID like event happens and revenues decline. Or the age of of baseballs core audience catches up to them and their next TV deal is not as kind.

That would be a messy court battle if the team could not or choose not to pay the deferred salary.

In any event, I don't see this as a good look for baseball and I see MLB stepping in to close loopholes that these contracts try and circumvent.

[Le Grande Orange]

Originally Posted by monkeyman576

Decade by decade inflation rate:
1980-1989: 5.9%
1990-1999: 3.1%
2000-2009: 2.6%
2010-2019: 1.7%
2020-2022: 4.6%

MLB average team revenue (MLB aggregate revenue divided by the number of teams) has grown at rates far in excess of CPI inflation since the early 1980s.

[Syd Thrift]

Originally Posted by rudel.dietrich

I have a feeling like MLB is going to crack down on these types of contracts in the future.

Let's say in 13 years time another COVID like event happens and revenues decline. Or the age of of baseballs core audience catches up to them and their next TV deal is not as kind.

That would be a messy court battle if the team could not or choose not to pay the deferred salary.

In any event, I don't see this as a good look for baseball and I see MLB stepping in to close loopholes that these contracts try and circumvent.

I agree that it's kind of a bad look and, frankly, a thing that historically speaking fly-by-night leagues did when they wanted to make a big splash (as the USFL did when they signed Steve Young to something like a 30 year deal, or the ABA did with several players). Even given all of his endorsement money I don't know why or how Ohtani or his agent managed to accept the deal (and I'm guessing the MLBPA also called them up and said "what the hell, guys?"). But from the owners' perspective, nah, the whole entire point of why this deal stinks is that it's an absolute beauty of a deal from the owners' side.

Okay, sure, yeah, baseball could massively decrease in popularity over the next 20 years and LA will be left holding the bag. All they have to do to make this work though is take that same, say, $500M they were going to pay Ohtani over the next 10 years, stick it into escrow, and pay him out of that. Just given a regular old market, nothing special, I can almost guarantee you that when the Dodgers are done paying out, there will still be money left in that escrow account.

The absolute, absolute worst case scenario here is that the Dodgers are complete idiots and hire Bernie Madoff to set up the escrow. Okay, not literally Madoff since he unalived himself, but that's literally what the Mets did with the Bobby Bonilla deal. Even there, though, the Mets are on the hook for all of $1.19M a year. That was still pretty decent money in baseball terms in 2001. It's like the cost of a replacement level relief pitcher in 2023. Inflation only tends to go upwards - even with the COVID example you have, the deflationary period that happened was followed by pretty rapid worldwide inflation - and just by that alone $660M today is simply not going to be worth as much in 10 years (and, going back to the escrow deal, even pegging the escrow to the Dow will bring you back more money per year than inflation will devalue it).

I am not an economist by any means; I know these deals because, as noted, they are super, super common in smaller leagues who are trying to make a big splash.

[Syd Thrift]

Originally Posted by thehef

Do we know that there wasn't another team or two that offered a similar deal? I mean, if all of the other teams apparently among the finalists - Angels, Jays, Giants, Cubs - offered the same deal, it would not be surprising that he'd still choose the Dodgers. After all, he doesn't have to move and would be joining a team with a significantly better record of success, proven farm system, solid medical/rehab staff, etc...

To this point, there was a Japanese newscast making the rounds on Twitter that explicitly pointed out the Angels' 9 year playoff drought. Ohtani is not the Japanese news but a guy who's making so much money on endorsements that he can sign a bad deal so that money is essentially not an object is going to sign with the highest prestige place he can. I'm just glad that was the Dodgers for once and not the Yankees. The only team in there I think that could have come close to the cachet that you get with the Dodgers are the Cubs and, much as I love Chicago now, Chicago ain't LA.

[TheMaus2]

Originally Posted by thehef

Do we know that there wasn't another team or two that offered a similar deal? I mean, if all of the other teams apparently among the finalists - Angels, Jays, Giants, Cubs - offered the same deal, it would not be surprising that he'd still choose the Dodgers. After all, he doesn't have to move and would be joining a team with a significantly better record of success, proven farm system, solid medical/rehab staff, etc...

The Jays deal was pretty similar I would guess. I agree that its the organizational infrastructure that makes LA the better option but... idk man. A team like Boston could go aggressive on the FA market in the next couple seasons and have a Texas-style reinvention. Having Ohtani along with a farm system teeming with guys ready to graduate would have been an interesting proposition.

[pilight]

The reason for Ohtani to do this is obvious. The bulk of the money will be paid some time after he's moved out of California and thus won't be subject to their onerous state income tax.

[dsvitak]

Originally Posted by pilight

The reason for Ohtani to do this is obvious. The bulk of the money will be paid some time after he's moved out of California and thus won't be subject to their onerous state income tax.

It could be worse..he could have signed with Toronto.

[TheMaus2]

playing for the Canadian team is miles more unforgivable than becoming a debt creditor for the Dodgers

[damientheomen3]

I wonder if there's a provision in place that forces teams that defer money like the Dodgers did to put that money in escrow, like NFL teams have to do for deals that pay big chunks of guaranteed money after the initial signing. Probably not given that this probably wasn't an intended style of contract.

[TheMaus2]

already rumblings that Glasnow and Arozarena are heading to Chavez Ravine

[Syd Thrift]

Originally Posted by damientheomen3

I wonder if there's a provision in place that forces teams that defer money like the Dodgers did to put that money in escrow, like NFL teams have to do for deals that pay big chunks of guaranteed money after the initial signing. Probably not given that this probably wasn't an intended style of contract.

The Dodgers have zero reason not to put that money in escrow. It's to their own financial advantage to do this. They put the money in escrow, let whoever manage it on the market, and they will wind up with a lot more than whatever they wind up having to pay Ohtani in the end. Maybe a poorer team wouldn't do this but even when the ABA did this stuff and called them Dolgoff Plans, 100% the signing teams stuck the money in an escrow fund,

[rudel.dietrich]

Originally Posted by pilight

The reason for Ohtani to do this is obvious. The bulk of the money will be paid some time after he's moved out of California and thus won't be subject to their onerous state income tax.

I have seen this floated about, but Ohtani does not seem like the type of guy who will stay in the US when his career is over.
He wants to stay on the west coast mostly for easier travel to Japan. He seems like he will head back to Japan after he is retired.

It is hard to find info on what his tax rate would be if he is in Japan and being paid by a California based business.
But the best I can tell it would be the California rate which as of 2023 is 13.3%

But I could be very wrong about that, info on non US citizens who do not live in the US but work for US based companies is very hard to find.


I really do not see Ohtani moving to Texas or Nevada or Florida while the Dodgers pay out his contract.
I have no idea what sort of tax obligations he will be subject too.

[thehef]

Originally Posted by damientheomen3

I wonder if there's a provision in place that forces teams that defer money like the Dodgers did to put that money in escrow, like NFL teams have to do for deals that pay big chunks of guaranteed money after the initial signing. Probably not given that this probably wasn't an intended style of contract.

Stumbled upon this a few minutes ago, from the linked article below:

"The CBA stipulates the team must place the net present value of the deferred money ($44 million, after deducting his $2-million salary) in an escrow account within two years of each owed season, where it will accumulate interest. That essentially means his 2033 payment must be in an escrow account by the summer of 2026."

https://www.thescore.com/mlb/news/27...-shohei-ohtani

Oh, and regarding finding a way around California's onerous taxes, there's this from the same article:

"Perhaps just as important are reported tax benefits when Ohtani begins taking deferral payments. He could avoid significant taxes by moving to an income-tax-free state at that time, according to Sportico."

[TheMaus2]

Another interesting wrinkle in Ohtani's contract is that he has an opt out at any time *if* the Dodgers initiate a certain personnel change...

[Westheim]

Originally Posted by thehef

Stumbled upon this a few minutes ago, from the linked article below:

"The CBA stipulates the team must place the net present value of the deferred money ($44 million, after deducting his $2-million salary) in an escrow account within two years of each owed season, where it will accumulate interest. That essentially means his 2033 payment must be in an escrow account by the summer of 2026."

https://www.thescore.com/mlb/news/27...-shohei-ohtani[/I]

Shouldn't that read 2034?

[low]

LA is trying hard to buy that championship. Yamamoto will probably end up there, too.

Zzz...

[TheMaus2]

I think the Glasnow trade is a net neutral trade. Rays get DeLuca and arguably the best pitching Dodgers graduate with about 5 years of club control. team still needs 1-2 SPs to compete from here, but i guess one of the Stone/Sheehan/Grove group could be serviceable. I'm not entirely sure why people think the WS is a lock because they have Glasnow? this squad has 1 playoff win in the last two seasons despite 200+ wins in two seasons. Easier to complain about this team when your team isn't spending money I guess.


Anyway, I'm quite intrigued by the moves the Royals are making right now. Could be winners in the glacial arms race that is the AL Central... I could see the Guardians selling JRam at the deadline, not sure the Twins improve this season and Detroit and Chicago are seemingly Just There lol

[MathBandit]

Originally Posted by TheMaus2

I think the Glasnow trade is a net neutral trade. Rays get DeLuca and arguably the best pitching Dodgers graduate with about 5 years of club control. team still needs 1-2 SPs to compete from here, but i guess one of the Stone/Sheehan/Grove group could be serviceable. I'm not entirely sure why people think the WS is a lock because they have Glasnow? this squad has 1 playoff win in the last two seasons despite 200+ wins in two seasons. Easier to complain about this team when your team isn't spending money I guess.

I don't think playoff wins is a relevant metric, seeing as how that's just asking how many coinflips they won. Though by the same train of thought I agree that the Dodgers are at best guaranteed a DS spot and nothing they can do will significantly improve their odds of winning a title beyond that.

Originally Posted by TheMaus2

Anyway, I'm quite intrigued by the moves the Royals are making right now. Could be winners in the glacial arms race that is the AL Central... I could see the Guardians selling JRam at the deadline, not sure the Twins improve this season and Detroit and Chicago are seemingly Just There lol

JRam gave up $100M to avoid being traded from Cleveland a couple years ago. I doubt his opinion on being moved has changed since then.