Sharp observation by ESPN’s Jorge Arangure, Jr.: If Aroldis Chapman doesn’t sign a deal and receive his bonus by Thursday at midnight, he’s going to get a multi-million dollar tax bill that he could have totally avoided.
Why? Because, Arangure reports, signing bonuses that are received outside the U.S., by a non-U.S.
resident, and in a tax year in which the person did not work in the
U.S., are not subject to U.S. taxation. Chapman currently lives in tax-free Andorra. He hasn’t pitched in the U.S. Thus, any money he makes in 2009 can’t be taxed in the U.S. He will, however, work in the U.S. in 2010, so he will be subject to U.S. taxation on all earnings after the first of the year regardless of where he lives. If, as expected, he gets tens of millions of dollars, that’s going to be a several million-dollar tax bill.
Arangure’s source on this, agent Joe Kehoskie, says “As far as I’m aware, neither the Hendricks brothers nor Rodney
Fernandez (who represent Chapman) have ever completed a contract for a
foreign free agent, so I bet this issue flew right under their radar.”
Maybe. But it may simply be that the market just hasn’t developed for Chapman like everyone thinks it eventually will, and that rushing to save a couple million in taxes now could cost him several more million in the value of the contract he ultimately signs.
Still, somewhere, the agent that Chapman fired to sign with the Hendricks brothers is smiling. And amending his lawsuit to claim that if he were still representing Chapman, he would have imposed a December 31st deadline to all interested clubs in an effort to avoid the bill.
There is literally nothing you could tell me that the incoming administration is considering which would shock me anymore. As such, I saw this story when I woke up this morning, blinked once, took a sip of coffee, closed the browser window and just went on with my morning, as desensitized as a wisdom tooth about to be yanked.
Rob Bradford of WEEI reports that Former Red Sox, Mets and Rangers manager Bobby Valentine is on a short-list of candidates for the job of United States Ambassador to Japan:
The 66-year-old, who currently serves as Sacred Heart University’s athletics director, has engaged in preliminary discussions with President-elect Donald Trump’s transition team regarding the position.
When contacted Thursday night, Valentine refused comment.
Huh. Given his history, I’d have assumed Valentine would be a better choice for the CIA, but what do I know?
Valentine managed the Chiba Lotte Marines of Japan’s Pacific League for six seasons, leading the team to a championship in 2005. He also knows the current prime minister of Japan, Shinzo Abe, as both went to USC. Assuming championship teams meet the country’s leader in Japan like they do in the United States, Valentine has at least twice the amount of experience with top political leaders than does, say, Ned Yost, so that’s something.
The former manager, more importantly, is friends with Donald Trump’s brother, with the two of them going way back. Which, given how this transition is going, seems like a far more important set of qualifications than anything else on this list.
Update (8:51 PM EST): The deal is in place, according to Heyman.
Update (8:27 PM EST): Derrick Goold of the St. Louis Post-Dispatch reports that the Cardinals made an “over-the-top offer” to Fowler to ensure he’d sign.
Frank Cusumano of KSDK Sports reports that free agent outfielder will take a physical in St. Louis on Friday. Presumably, that means that Fowler and the Cardinals have gotten pretty far along in negotiations.
Jon Heyman of FanRag Sports recently reported that Fowler was looking for $18 million per year. The Blue Jays reportedly made an offer to Fowler in the four-year, $16 million range several days ago. The Cardinals’ offer to Fowler, if there is indeed one, is likely somewhere between the two figures.
Fowler, 30, is coming off of a fantastic year in which he helped the Cubs win their first World Series since 1908. During the regular season, he hit .276/.393/.447 with 13 home runs, 48 RBI, 84 runs scored, and 13 stolen bases in 551 plate appearances.
Fowler rejected the Cubs’ $17.2 million qualifying offer last month. While the QO compensation negatively affected Fowler’s experience in free agency last offseason — he didn’t sign until late February with the Cubs — his strong season is expected to make QO compensation much less of an issue.