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Zack Wheeler: To the Phils (5yr 118); Sox had made BIGGER offer

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9 minutes ago, shakes said:

I assure you taxes are highly considered in contract negotiations. It's part of the reason you are seeing weird numbers like $118mm, and the union isn't getting in the way  over that. It's also why deferred money and incentives are not counted the same or taken seriously in high end negotiations. Location arbitrage is a very real consideration for agents and dollar figures. It comes into play when you are negotiating contracts even at $100k level. 

The other thing to consider is when you are playing in the 9 figure pool, taxes are a different game and there are many advantages to having that kind of wealth and ways to work around tax impact. 

 

Deferred money isn't taken seriously because of the time value of money; it has nothing to do with taxes. 

At this level of money, this just isn't true - this is something I can actually speak on from a position of knowledge for once as I actually have real sources for once in my life on this. The union wants you taking the most guaranteed money - period, end of story. Your agent certainly wants you taking the most guaranteed money. It doesn't mean the union called Wheeler yelling at him, but a part of the union messaging and education is on contracts and maximizing your worth for your "brothers and union peers." The union couldn't care less about taxes state to state.

For example, if the Rangers or Marlins offered Manny 285 million, even though there's no income tax and California tax is absurd, he wouldn't sign there because the Net was higher. The gross is what matters for growing contracts. Every player who takes less decreases the growth slightly. 

Also, your last sentence is spot on. There's ways around all of this tax nonsense anyway.

Edited by Look at Ray Ray Run

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28 minutes ago, Look at Ray Ray Run said:

Deferred money isn't taken seriously because of the time value of money; it has nothing to do with taxes. 

At this level of money, this just isn't true - this is something I can actually speak on from a position of knowledge for once as I actually have real sources for once in my life on this. The union wants you taking the most guaranteed money - period, end of story. Your agent certainly wants you taking the most guaranteed money. It doesn't mean the union called Wheeler yelling at him, but a part of the union messaging and education is on contracts and maximizing your worth for your "brothers and union peers." The union couldn't care less about taxes state to state.

For example, if the Rangers or Marlins offered Manny 285 million, even though there's no income tax and California tax is absurd, he wouldn't sign there because the Net was higher. The gross is what matters for growing contracts. Every player who takes less decreases the growth slightly. 

Also, your last sentence is spot on. There's ways around all of this tax nonsense anyway.

I have no insight directly into the unions stance, but any agent worth his salt would ignore that and that is a terrible stance for a players union to hold.

What I can tell you with certainty, and 20 years of experience in Finance and Wealth Management of high net worth individuals, that an agent and player would ignore that union stance and only care about net value. These agents wouldn't have clients if they took the unions approach. There will always be exceptions, because the other thing i have learned with certainty is you cannot put limits on human ego, but overall agents will focus on net or they are ignoring a powerful negotiating strategy. 

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2 minutes ago, shakes said:

I have no insight directly into the unions stance, but any agent worth his salt would ignore that and that is a terrible stance for a players union to hold.

 What I can tell you with certainty, and 20 years of experience in Finance and Wealth Management of high net worth individuals, that an agent and player would ignore that union stance and only care about net value. These agents wouldn't have clients if they took the unions approach. There will always be exceptions, because the other thing i have learned with certainty is you cannot put limits on human ego, but overall agents will focus on net or they are ignoring a powerful negotiating strategy. 

All I can say is this is not at all how professional sports work in negotiations and the majority of players absolutely do not ignore the union on this stance, and it doesn't make their agents bad at their jobs. The agents income is tied solely to the salary growth of the players, and the growth of salaries is tied directly to gross income - not net income. Players and agents would be working against their best interests if they took lesser offers consistently.

Because your typical union negotiating tactics aren't really meaningful here (cost of living based on location and etc), the gross value of a contract is what drives the market upward. For example, in most unions you can factor in things like cost of living to negotiate raises but when you enter this stratosphere of dollars, the cost of living doesn't decrease or increase salary demands; nor do most other typical union drivers. All of these guys are negotiating on an even playing field, with the sole driver being guaranteed dollars.

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2 minutes ago, Look at Ray Ray Run said:

All I can say is this is not at all how professional sports work in negotiations and the majority of players absolutely do not ignore the union on this stance, and it doesn't make their agents bad at their jobs. The agents income is tied solely to the salary growth of the players, and the growth of salaries is tied directly to gross income - not net income. Players and agents would be working against their best interests if they took lesser offers consistently.

Because your typical union negotiating tactics aren't really meaningful here (cost of living based on location and etc), the gross value of a contract is what drives the market upward. For example, in most unions you can factor in things like cost of living to negotiate raises but when you enter this stratosphere of dollars, the cost of living doesn't decrease or increase salary demands; nor do most other typical union drivers. All of these guys are negotiating on an even playing field, with the sole driver being guaranteed dollars.

I appreciate the insight into the unions stance. I will say this goes against every agent/accounting approach I have ever seen, including professional athletes-some being MLB players. 

I will spare the board into a union debate, but I will just politely disagree and say that this 100% would make an agent bad at their job. 

It's pretty obvious in Wheeler's case that net was a driving factor into the contract negotiations. 

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8 minutes ago, shakes said:

I appreciate the insight into the unions stance. I will say this goes against every agent/accounting approach I have ever seen, including professional athletes-some being MLB players. 

I will spare the board into a union debate, but I will just politely disagree and say that this 100% would make an agent bad at their job. 

It's pretty obvious in Wheeler's case that net was a driving factor into the contract negotiations. 

How is that obvious at all? The driving force according to actual reports was family and not money. The higher up in the market you go the more neccessary and the more pressure you feel to take the highest guaranteed offer.

As I mentioned tax calculations 5 years out on a MLB contract is difficult to forecast exactly as it's tied directly to scheduling and tax laws change with relative frequency. You pay taxes based on the city you are in for that game, not based on your home teams locations. 

Youd need a schedule 5 years out and youd need to factor every city and how many games and etc. Its certainly possible though. If you can point me to a case of tax reasons driving a player to take a lesser offer I'd love to read about it.

Gross salaries are how wages grow in baseball. Net take home is not the driving force behind salary growth. If I come taxes were a driving force in negotiations then teams in California would consistently have to pay more for the same quality of player vs Texas and Florida and that simply does not happen and "good agents" would charge California teams more than Florida teams.

Edited by Look at Ray Ray Run

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14 minutes ago, Look at Ray Ray Run said:

How is that obvious at all? The driving force according to actual reports was family and not money. The higher up in the market you go the more neccessary and the more pressure you feel to take the highest guaranteed offer.

As I mentioned tax calculations 5 years out on a MLB contract is difficult to forecast exactly as it's tied directly to scheduling and tax laws change with relative frequency. You pay taxes based on the city you are in for that game, not based on your home teams locations. 

Youd need a schedule 5 years out and youd need to factor every city and how many games and etc. Its certainly possible though. If you can point me to a case of tax reasons driving a player to take a lesser offer I'd love to read about it.

Gross salaries are how wages grow in baseball. Net take home is not the driving force behind salary growth. If I come taxes were a driving force in negotiations then teams in California would consistently have to pay more for the same quality of player vs Texas and Florida and that simply does not happen and "good agents" would charge California teams more than Florida teams.

These negotiations are always complicated and I don't really buy the family factor as big as it's being played, but it's been discussed in depth throughout this thread and it's just an opinion. We have dissenting views and experience here and that's fine. I appreciate the discussion. 

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35 minutes ago, shakes said:

These negotiations are always complicated and I don't really buy the family factor as big as it's being played, but it's been discussed in depth throughout this thread and it's just an opinion. We have dissenting views and experience here and that's fine. I appreciate the discussion. 

Same; always appreciate different view points and I agree with you regarding wealth management accounts and etc. Bottom lines drive a lot more decisions in the financial sector than it may in the massive contract/entertainment world. Ego's are much more involved when it comes to numbers for individuals, and the Unions goal is not individualized - it's typically a broad goal.

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2 hours ago, Look at Ray Ray Run said:

How is that obvious at all? The driving force according to actual reports was family and not money. The higher up in the market you go the more neccessary and the more pressure you feel to take the highest guaranteed offer.

As I mentioned tax calculations 5 years out on a MLB contract is difficult to forecast exactly as it's tied directly to scheduling and tax laws change with relative frequency. You pay taxes based on the city you are in for that game, not based on your home teams locations. 

Youd need a schedule 5 years out and youd need to factor every city and how many games and etc. Its certainly possible though. If you can point me to a case of tax reasons driving a player to take a lesser offer I'd love to read about it.

Gross salaries are how wages grow in baseball. Net take home is not the driving force behind salary growth. If I come taxes were a driving force in negotiations then teams in California would consistently have to pay more for the same quality of player vs Texas and Florida and that simply does not happen and "good agents" would charge California teams more than Florida teams.

Luis Robert, and his waiting one year to start his career stateside had major tax implications (with how the contract and signing bonus was accounted for) and was one of the reasons they chose the lower offer over StL.

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7 hours ago, steveno89 said:

I'm really happy we at least managed to land Grandal, a legitimate quality free agent. We tried our best for Wheeler, but family does play a factor on decision day. 

 

It's understandable to be disappointed but not mad at the FO imo.

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6 hours ago, shakes said:

These negotiations are always complicated and I don't really buy the family factor as big as it's being played, but it's been discussed in depth throughout this thread and it's just an opinion. We have dissenting views and experience here and that's fine. I appreciate the discussion. 

I like you.

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