What I am saying is that if they deferred 3.2 million. In 9 years it will still be 3.2 million. They cant put it in some investment account so that it accrues interest and is worth more in 9 years. (I hope I am explaining myself right)
- MBFlyerfan

Right, that certainly makes sense. But my point is this would be against the interests of Jarvis. If he gets that 3.2 million now, for example, he can very likely make that say 6 million merely by passive investment.

I just don't see how this happens. The only path would be for him to beat out Zamula.
- MBFlyerfan

Or if Risto isn’t ready to go

Right, that certainly makes sense. But my point is this would be against the interests of Jarvis. If he gets that 3.2 million now, for example, he can very likely make that say 6 million merely by passive investment.
- PT21

Oh yes, most definitely against his interests. Which is most likely reason #1 why it doesn't happen often or at all. The player would be against it. Jarvis definitely did the hometown discount thing as you said.

Or if Risto isn’t ready to go
- anti-lame

True, but I would rather have Attard or Ginning make the team in that case.

Oh yes, most definitely against his interests. Which is most likely reason #1 why it doesn't happen often or at all. The player would be against it. Jarvis definitely did the hometown discount thing as you said.
- MBFlyerfan

Yup. I don't see ANY situation where it could economically favor the player. Including taxes.

One more thing about the interesting Ohtani case. Lets say that guy does go back to Japan. And avoids both Federal and CA tax.

Here is the thing. Japanese tax rates at that level are effing high. And there is a high local tax rate (equivalent to state taxes), and in the wash, I don't see how the guy can possibly come out ahead when you factor in capital gains foregone.

Apparently, Jacob Slavin's new contract also has a deferred salary year in it.

Yup. I don't see ANY situation where it could economically favor the player. Including taxes.

One more thing about the interesting Ohtani case. Lets say that guy does go back to Japan. And avoids both Federal and CA tax.

Here is the thing. Japanese tax rates at that level are effing high. And there is a high local tax rate (equivalent to state taxes), and in the wash, I don't see how the guy can possibly come out ahead when you factor in capital gains foregone.
- PT21

If you can read it.

https://www.nytimes.com/a...deferrals-silicon-valley/


https://apnews.com/articl...2bac2c454d4ef814d7fea0291

Ohtani’s Dodgers contract has $680 million deferred, lowering tax value to $46 million annually

Apparently, Jacob Slavin's new contract also has a deferred salary year in it.
- MJL

Carolina must really treat its players well for the players to do these team friendly deals.

Carolina must really treat its players well for the players to do these team friendly deals.
- MBFlyerfan

I agree it's team friendly but there has to be something in it for the players also. If not, I think the NHLPA would be involved.

I agree it's team friendly but there has to be something in it for the players also. If not, I think the NHLPA would be involved.
- MJL

Yeah, maybe they just love playing there and want to win.

The biggest threat to Trump after the Swifties and the NFL are the Republicans themselves. Many are simply sick of his sorry ass. He is considered an embarrassment to the Republican party by many republicans. Thanks!
- Phillywhiteout

they are not a threat

What I am saying is that if they deferred 3.2 million. In 9 years it will still be 3.2 million. They cant put it in some investment account so that it accrues interest and is worth more in 9 years. (I hope I am explaining myself right)
- MBFlyerfan

cant imagine any player deferring money if it wasn't advantageous to them

cant imagine any player deferring money if it wasn't advantageous to them
- hello it's me 2050

Which is probably why we have never heard of it until now.

Or if Risto isn’t ready to go
- anti-lame

Did we ever find out what was wrong with him?

Did we ever find out what was wrong with him?
- roenick97

The injury they told us about was the ruptured tricep tendon that he had surgery for. But they’ve been pretty tight lipped about him so I wouldn’t be surprised if he caught that contagious core muscle injury that’s been going around lol

They say he’s around the rink and will be ready but we’ve heard that before

If you can read it.

https://www.nytimes.com/a...deferrals-silicon-valley/


https://apnews.com/articl...2bac2c454d4ef814d7fea0291

Ohtani’s Dodgers contract has $680 million deferred, lowering tax value to $46 million annually
- MJL

Those arguments only work if:

1. CA tax is avoided by establishing residence elsewhere.
2. That residence is far lower tax
3. The difference between 1 and 2 < capital gains foregone.

In the extreme case, say he moves to Florida for the duration of deferred payouts ( unlikely, as the Japanese usually always go back to Japan for cultural reasons). And he only gets the average rate of return from stocks: about 8.6% (Also very unlikely at his income level).

Then, at the very best, he has saved $6 for every $100 by deferring income 10 years. Nobody would do something like that.

As such, it seems likely his stated motivation, of keeping his team competitive, and taking the mother of all home team discounts, is the most likely one.

Hats off to the dude.

Those arguments only work if:

1. CA tax is avoided by establishing residence elsewhere.
2. That residence is far lower tax
3. The difference between 1 and 2 < capital gains foregone.

In the extreme case, say he moves to Florida for the duration of deferred payouts ( unlikely, as the Japanese usually always go back to Japan for cultural reasons). And he only gets the average rate of return from stocks: about 8.6% (Also very unlikely at his income level).

Then, at the very best, he has saved $6 for every $100 by deferring income 10 years. Nobody would do something like that.

As such, it seems likely his stated motivation, of keeping his team competitive, and taking the mother of all home team discounts, is the most likely one.

Hats off to the dude.
- PT21

He is not taking that much deferred money to give the team the mother of all home team discounts. He's taken the deferred payments for the reasons given in the article. It is giving him a significant tax break.

The injury they told us about was the ruptured tricep tendon that he had surgery for. But they’ve been pretty tight lipped about him so I wouldn’t be surprised if he caught that contagious core muscle injury that’s been going around lol

They say he’s around the rink and will be ready but we’ve heard that before
- anti-lame

What’s funny about Risto is, he’s been a pretty healthy player in his career but now that he’s been hurt a little but the past season he’s had a serious injury, he’s been deeper as hurt all the time.

What’s funny about Risto is, he’s been a pretty healthy player in his career but now that he’s been hurt a little but the past season he’s had a serious injury, he’s been deeper as hurt all the time.
- roenick97

Has anybody in the Flyers returned earlier than expexted or better than expected from an injury/surgery in the past 10-15 years? Giroux maybe?

Has anybody in the Flyers returned earlier than expexted or better than expected from an injury/surgery in the past 10-15 years? Giroux maybe?
- PT21

A return timetable from an injury is always an estimate that is difficult to pin down. With the final decider being the players judgement. Which is why you always see qualifiers such as day to day, week to week or time frames with leeway such as 6-8 weeks. 8 weeks can easily become 9-10 weeks

Doesn't this strenthen my point? You get access to those investment vehicles by getting the money now.

The top marginal tax rate is 36%. Carolina has a rate of 4.5% income tax.

If you receive 1 m in Carolina today, and pay a tax of 400k approx. You get 600k. Just invest it in an index fund. You need only a 4.5% roi yearly for 8 years to recover the 1 million back in year 9 AND you have already paid your taxes.

I don't see how there could be tax savings except for the change of domicile issue relevant to the Ohtani case maybe.
- PT21

You're assuming that the compensation was available to him now or if it was offered as a way to increase the total value of the deal by deferring. For someone who doesn't need the money now, it can often be attractive to take a larger bite down the line. I really doubt (but don't know) it wasn't a choice between X dollars now or same X dollars later.

Deferred compensation is taxed on the year it is realized. So sometimes it is advantageous to push it to a particular year.

For high net worth individuals, there are options to unlock that future contractual compensation through financing that will pull some of the future earnings forward.

And again, most people just default to "have the money now" because they can't imagine what it means to really not need the money now. A fiduciary financial advisor walks through scenarios so someone in that position can make the best decision for them and not simply defaulting to the biggest potential payout.

A counterintuitive example I hear sometimes when we all dream about winning the lottery is that people would pay off their mortgage. That is not a good financial decision at all. Mortgage rates are lower than the long-term appreciation of real estate and paying off a note on a secured asset is a neutral balance sheet transaction; you're not gaining anything by doing it. You're just moving the money from one column to another. But we're trained to think "owing money = bad" and we should do it.

The one thing I'm pretty sure of is Jarvis probably had really good financial planners who advised him this was an option he should consider. And it surely was a negotiation that ended up being a compromise for both sides; he likely increased the total comp and the team was able to spread the comp out to more years.

You're assuming that the compensation was available to him now or if it was offered as a way to increase the total value of the deal by deferring. For someone who doesn't need the money now, it can often be attractive to take a larger bite down the line. I really doubt (but don't know) it wasn't a choice between X dollars now or same X dollars later.

Deferred compensation is taxed on the year it is realized. So sometimes it is advantageous to push it to a particular year.

For high net worth individuals, there are options to unlock that future contractual compensation through financing that will pull some of the future earnings forward.

And again, most people just default to "have the money now" because they can't imagine what it means to really not need the money now. A fiduciary financial advisor walks through scenarios so someone in that position can make the best decision for them and not simply defaulting to the biggest potential payout.

A counterintuitive example I hear sometimes when we all dream about winning the lottery is that people would pay off their mortgage. That is not a good financial decision at all. Mortgage rates are lower than the long-term appreciation of real estate and paying off a note on a secured asset is a neutral balance sheet transaction; you're not gaining anything by doing it. You're just moving the money from one column to another. But we're trained to think "owing money = bad" and we should do it.

The one thing I'm pretty sure of is Jarvis probably had really good financial planners who advised him this was an option he should consider. And it surely was a negotiation that ended up being a compromise for both sides; he likely increased the total comp and the team was able to spread the comp out to more years.
- atibus

No doubt and it definitely isn't just about giving a home town discount to the team as PT is trying to imply. We also have to remember, not likely the case with Jarvis but with a player like Ohtani. He is taking a relative paltry sum yearly during the non deferred years but he is making a boatload of cash through endorsements. That is part of what aids him in doing what he is doing.

You're assuming that the compensation was available to him now or if it was offered as a way to increase the total value of the deal by deferring. For someone who doesn't need the money now, it can often be attractive to take a larger bite down the line. I really doubt (but don't know) it wasn't a choice between X dollars now or same X dollars later.

Deferred compensation is taxed on the year it is realized. So sometimes it is advantageous to push it to a particular year.

For high net worth individuals, there are options to unlock that future contractual compensation through financing that will pull some of the future earnings forward.

And again, most people just default to "have the money now" because they can't imagine what it means to really not need the money now. A fiduciary financial advisor walks through scenarios so someone in that position can make the best decision for them and not simply defaulting to the biggest potential payout.

A counterintuitive example I hear sometimes when we all dream about winning the lottery is that people would pay off their mortgage. That is not a good financial decision at all. Mortgage rates are lower than the long-term appreciation of real estate and paying off a note on a secured asset is a neutral balance sheet transaction; you're not gaining anything by doing it. You're just moving the money from one column to another. But we're trained to think "owing money = bad" and we should do it.

The one thing I'm pretty sure of is Jarvis probably had really good financial planners who advised him this was an option he should consider. And it surely was a negotiation that ended up being a compromise for both sides; he likely increased the total comp and the team was able to spread the comp out to more years.
- atibus

Good point. An extra (implicitly) chunk could have been added to the earnings to sweeten incentives for deferral.

This seems to me to be a loophole in the salary cap. Say that market value of a player is 56 million over 8 (7 AAV). In the 9th year, say his projected market value is also 7m in 9th year $.

Instead of giving him 63 over the 9 years that is his market value, give him 65, but with 11 in the last year, leading to an AAV of 6.75 instead of 7.

And yes, I can certainly envision situations where he could borrow money at a low interest rate against guaranteed future earnings and get the usage of money earlier than the salary

Regarding deferred comp, I can see the tax in the year of realization being relevant, not year of earning. No different than a traditional IRA. Strike my earlier objection to this.

But what about place of earning versus realization? Anyone could just defer conpensation to the extent they can, relocate to FL/TX and avoid paying state taxes

Oh yes, most definitely against his interests. Which is most likely reason #1 why it doesn't happen often or at all. The player would be against it. Jarvis definitely did the hometown discount thing as you said.
- MBFlyerfan

Maybe not. We were both assuming total salary is constant whether paid out iver 8 or 9. But what if latter deal was more, and the more "swamps out" interest/,capital gains lost?

Good point. An extra (implicitly) chunk could have been added to the earnings to sweeten incentives for deferral.

This seems to me to be a loophole in the salary cap. Say that market value of a player is 56 million over 8 (7 AAV). In the 9th year, say his projected market value is also 7m in 9th year $.

Instead of giving him 63 over the 9 years that is his market value, give him 65, but with 11 in the last year, leading to an AAV of 6.75 instead of 7.

And yes, I can certainly envision situations where he could borrow money at a low interest rate against guaranteed future earnings and get the usage of money earlier than the salary

Regarding deferred comp, I can see the tax in the year of realization being relevant, not year of earning. No different than a traditional IRA. Strike my earlier objection to this.

But what about place of earning versus realization? Anyone could just defer conpensation to the extent they can, relocate to FL/TX and avoid paying state taxes
- PT21

The NHL uses a time value of money discount calculation to determine the cap hit.

Information was given to you previously with links about it being a tax break due to tax in the year of realization. You ignored it.

As far as your last comment. I guess that's you self correcting and admitting that you were wrong when you stated on the previous page that "There is nothing in it for the player monetarily to defer $."