Sons of Bill Simmons

Rumors involving Boston Sports, Celebrity Gossip, and Humor

MLB Agents Want Players To Get Bonuses Before Jan. 1

Posted by Mike on November 5, 2008

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After last night’s historic election with Barack Obama becoming President, many agents that represent Major League Baseball players want to get their client’s bonuses before January 1st. The reason for this according to ESPN, is because “President-elect Barack Obama has proposed increasing the top federal income tax rate from 35 percent to 39.6 percent, where it was under president Bill Clinton. If signing bonuses are paid before Jan. 1, they likely would be taxed at the current rate and would not be subject to any increase”. We have also seen this in the NFL were Miami Dolphins majority owner Wayne Huizenga wanted his teams sale finalized before Jan 1st due to the capital gains tax. Unlike the NFL were players bonuses are a large part of their contracts due to them not being guaranteed, in MLB bonuses aren’t as significant due to the fact that all contracts are guaranteed. This could be a sign that contracts in baseball maybe changing. There has been speculation due to the current economy that teams in MLB might not spend has richly as they have in the past. This wouldn’t effect the Manny Ramirez and CC Sabathia’s of the world, they’ll get their money, but it would effect the middle of the pack MLB players. More from ESPN

Next year’s major league minimum is $400,000. Agent Scott Boras, negotiating eight- and possibly nine-figure deals for free agents Manny Ramirez and Mark Teixeira, already has thought about the possibility of asking for larger signing bonuses payable this year in some of his contracts.

“There’s some consideration to be had with the impact of the election,” he said.

Free agents can’t start negotiating money with all teams until Nov. 14. Only a relatively small percentage of contracts are finalized before Jan. 1.

Still, for a big-money free agent earning $10 million in 2009, Obama’s plan could increase his federal tax by more than $400,000.

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