2023/24 Blue Jays Off Season Thread

[bizaro86]

Originally Posted by Inferno

And in this case the Dodgers and Mets both offered the most money. He picked the Dodgers.

They need to do something with deferred salary too. If they're going to allow it there should be a limit on how much of a contract can be deferred. It's pretty obvious both Ohtani and the Dodgers worked on it for luxury tax purposes which is the closest thing to a salary cap MLB has right now.

For sure. But if the Dodgers had spent their cap space on Ohtani they wouldn't be able to match that offer and he'd be somewhere else. And probably not the Mets, since their cap space would be going to pay Justin Verlander to play for the Astros...

[Inferno]

Originally Posted by bizaro86

For sure. But if the Dodgers had spent their cap space on Ohtani they wouldn't be able to match that offer and he'd be somewhere else. And probably not the Mets, since their cap space would be going to pay Justin Verlander to play for the Astros...

Exactly, he chose the Dodgers but it's not like he gave up money from the Mets because he wanted to be a Dodger.

He had a pick between the two and he most likely picked the Dodgers because that's where Ohtani went.

[browna]

Yeah this really isn't any of surprise. My guess is this new chap is deferring salary too.

It's the Mets that are in danger of making an outrageous trade out of all this...tons of money to spend and desperate to win but no one picks them and losing out to the Dodgers and Yanks and Giants won't sit well.

No idea what their farm system or good younger roster players under control are, is but if they desperately want to make a splash, say for the reigning HR champ (All Star game) like Vlad ..(he said he's never be a Yankee, right? Not not a New Yorkan?)

[Jason14h]

The Mets already announced last year they would be in a transition year. They arent under pressure to make a dumb deal

And deferring money has no impact on the luxury tax - The current value of the contract is taken into consideration for tax purposes.

Ohtani and his agent just wanted to be able to announce a 700 million contract (That in reality is $490 million)

And save on some Cali taxes.

[Inferno]

Originally Posted by Jason14h

And deferring money has no impact on the luxury tax - The current value of the contract is taken into consideration for tax purposes.

It's still a 700M deal. It's just paid over the course of 20 years instead of 10 so the Dodgers save 24M a year on luxury tax calculations.

It's been reported numerous times that Ohtani wanted to do it so the Dodgers could add even more players.

He still gets his 700M to add to whatever he makes in endorsements. He just gets 97% of it after he retires.

[jayswin]

Yeah, I don't see how this isn't a $700mil deal. The player gets $700mil, that's a $700mil deal regardless of how it's paid out.

[KootenayFlamesFan]

For the second time this month, the Dodgers have made a record-setting free agent strike. Los Angeles is reportedly in agreement with Yoshinobu Yamamoto on a 12-year, $325MM contract. The deal, which is pending a physical, includes a $50MM signing bonus for the Wasserman client and does not contain any deferred money. It comes with a near-$51MM posting fee to the Orix Buffaloes of Nippon Professional Baseball, bringing the overall commitment north of $375MM.

The contract also contains a pair of opt-out opportunities. Specifics on that clause remain unknown, although SNY’s Andy Martino reported that Yamamoto’s camp had sought the ability to retest free agency after the fifth and eighth seasons.

https://www.mlbtraderumors.com/2023/...-yamamoto.html

[bluejays]

Is SVB insuring these guys? Seems crazy that someone is signing these lengthy contracts with so much risk. Their premiums must be through the roof. Like other have mentioned, hope they get burned bad. I’ve disliked the Yankees, but I don’t think I’ve disliked a team more than this years Dodgers. Can’t wait for them to be this years Padres.

[Jason14h]

Originally Posted by Inferno

It's still a 700M deal. It's just paid over the course of 20 years instead of 10 so the Dodgers save 24M a year on luxury tax calculations.

It's been reported numerous times that Ohtani wanted to do it so the Dodgers could add even more players.

He still gets his 700M to add to whatever he makes in endorsements. He just gets 97% of it after he retires.

It’s not 700 million though in the typical sense

It like when Survivor and Amazing Race say you win $1 million , but it’s actually $50k a year for the next 20 years - it isn’t “worth” one million

The contract they agreed to is $485 million ish in real dollars . They then spread it out so that he doesn’t have to pay California taxes post playing career and increased the amount so the present value of the contract matches

This is all about allowing him to defer and avoid approx $100 million in extra taxes over the long run . But they sure weren’t going to come out and say that’s why . So they feed some BS about “His idea to help the Dodgers”

It doesn’t “help” the Dodgers in any real sense - unless the Dodgers actually offered 700$ million up front and he chose to defer it - in which case Ohtani is a moron who effectively took 200$ million less then offered

But this has already been debunked with sources confirming $500 millionish was the offer on the table from other teams (which equals approx the $700 million he takes deferred)

All that matters is the present value and tax implications of this deal - so that 20 years from now he comes out ahead vs taking the money up front and investing

If you think Ohtani is doing this as a “favor” to LA I have a bridge to sell you

[Strange Brew]

Originally Posted by Inferno

It's still a 700M deal. It's just paid over the course of 20 years instead of 10 so the Dodgers save 24M a year on luxury tax calculations.

It's been reported numerous times that Ohtani wanted to do it so the Dodgers could add even more players.

He still gets his 700M to add to whatever he makes in endorsements. He just gets 97% of it after he retires.

Originally Posted by jayswin

Yeah, I don't see how this isn't a $700mil deal. The player gets $700mil, that's a $700mil deal regardless of how it's paid out.

If you look at is from the Dodgers perspective, it's not really a $700M deal.
Most of the money is paid after the contract term ends, that makes it very unusual. Frankly it's more like a pension than salary.

From an accounting perspective, if the Dodgers fund his deferred payment $46 million per year over the next 10 years, (or whatever the right number is) that will essentially be their expense related to Ohtani.

Or to put it another way, certainly you would value a $1 million dollar mortgage differently if it was at 0% interest vs. 7%.

[Parallex]

That will be a... interesting starting pitching staff. Really really good performance potential but man... there is some huge question marks regarding translating that performance potential into actual performance. I mean other then Yamamoto (who hasn't pitched a single MLB inning) you just have guys who had their elbow surgically repaired in the past year and Tyler Glasnow who has pitched 100+ innings as a starter one time since he made the majors because of a litany of issues (granted that one time was last year).

Real glass cannon of a pitching staff.

[bizaro86]

Originally Posted by Strange Brew

If you look at is from the Dodgers perspective, it's not really a $700M deal.
Most of the money is paid after the contract term ends, that makes it very unusual. Frankly it's more like a pension than salary.

From an accounting perspective, if the Dodgers fund his deferred payment $46 million per year over the next 10 years, (or whatever the right number is) that will essentially be their expense related to Ohtani.

Or to put it another way, certainly you would value a $1 million dollar mortgage differently if it was at 0% interest vs. 7%.

Plus the CBA literally requires them to pre fund it.

The Dodgers are giving a bit of his $46MM to him and putting the rest in a bank account with his name on it. From their perspective it's absolutely $46MM/year.

From his perspective also, because he could easily get as good or better return on the money if they gave it to him now. IMO this is mostly about bragging rights to call it $700 MM and skipping out on CA taxes.

[Inferno]

Originally Posted by Jason14h

If you think Ohtani is doing this as a “favor” to LA I have a bridge to sell you

Not as a favor. He's there for the next 10 years and wants to win so it benefits him just as much as them that they can spend an extra 24M to add other player(s) that otherwise would have been spent on him.

[The Fisher Account]

This league needs a hard cap. Total BS.

[Strange Brew]

Originally Posted by Inferno

Not as a favor. He's there for the next 10 years and wants to win so it benefits him just as much as them that they can spend an extra 24M to add other player(s) that otherwise would have been spent on him.

There is no "extra" 24M. It's not a $70M salary. Never was and doesn't seem that anybody was offering that.

It would not otherwise have been spent on Ohtani.

It's simply a $46M salary for next 10 years. It's just that ohtani doesn't get to hold the money during that time.

[nfotiu]

We'll see how the Dodgers season plays out. They have been perennial contenders for years now by avoiding the mega contracts, spending on the high side, but spending smartly.

A few early playoff exits seems to have made them go a little crazy.

So far, the teams who've spent like drunken sailors have only succeeded in winning the off-season. There isn't a problem with on field parity in the MLB.

[Jason14h]

Originally Posted by The Fisher Account

This league needs a hard cap. Total BS.

Does it though ? Baseball has the most player movement , most player for player trades , and most variety in playoff teams and champions

Salary Caps actually create dynasties and less competitive variety IMO - and also can handcuff lower desired destinations when they make a bad salary decision

Players can make super teams due to artificial player salary caps , and also it places much more importance on locking down a franchise player (maybe this isn’t as big an issue in baseball as other sports though )

Is it annoying when players go to LA or NY vs Toronto ? Sure . But Toronto has no issue attracting big name FAs , and the Mets , Yankees and Dodgers have had 1 non Covid championship combined in the past 23 years

The only “issue” is the very low spending teams - and a cap doesn’t help them - they aren’t spending either way . The luxury tax actually helps these teams a lot more then a cap

[Parallex]

Originally Posted by Inferno

Not as a favor. He's there for the next 10 years and wants to win so it benefits him just as much as them that they can spend an extra 24M to add other player(s) that otherwise would have been spent on him.

I think this is incorrect.

1: This is only right if the dollar value on undeferred offers from the Dodgers was higher then the NPV calculation used for CBT calculation (in which case Ohtani left money on the table). Which might be the case but considering that his pre-offseason valuation was estimated at around 500M and this is around 500M in NPV I suspect that's not the case.

2: Even if 700M was on the table straight up it doesn't get them an additional 24M worth of players. MLB isn't a hard-capped league. The most it would do is save them roughly 15M-ish dollars in CBT payments (assuming they don't hit the next threshold that takes it to a 92% taxable rate).

This is just bragging rights with possible tax avoiding benefits for Ohtani. Of course they're playing it up as something else but that's just for show.

[Parallex]

Originally Posted by Jason14h

The only “issue” is the very low spending teams - and a cap doesn’t help them - they aren’t spending either way . The luxury tax actually helps these teams a lot more then a cap

It would actually be worse for them (maybe not for their fans) because hard caps tend to come with hard floors so from their perspective moving to a cap system would be a money loser.

[flambers]

Originally Posted by Jason14h

Does it though ? Baseball has the most player movement , most player for player trades , and most variety in playoff teams and champions

Salary Caps actually create dynasties and less competitive variety IMO - and also can handcuff lower desired destinations when they make a bad salary decision

Players can make super teams due to artificial player salary caps , and also it places much more importance on locking down a franchise player (maybe this isn’t as big an issue in baseball as other sports though )

Is it annoying when players go to LA or NY vs Toronto ? Sure . But Toronto has no issue attracting big name FAs , and the Mets , Yankees and Dodgers have had 1 non Covid championship combined in the past 23 years

The only “issue” is the very low spending teams - and a cap doesn’t help them - they aren’t spending either way . The luxury tax actually helps these teams a lot more then a cap

Signings like the Dodgers made, will definitely hurt the game long term

Baseball has different levels, small market teams are in big trouble with this type of spending.

Others will follow

Cap is needed, however as you mentioned, unfortunately the side effect it will kill the movement.