Aroldis Chapman about to incur multi-million dollar tax liability

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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.

Free agents who sign with new teams are not disloyal

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Most mornings my local newspaper is pretty predictable.

I know, when I navigate to its home page, that I’ll find about eleventeen stories about Ohio State football, even if it is not football season (especially if it’s not football season, actually), part 6 of an amazingly detailed 8-part investigation into a thing that is super important but which no one reads because it has nothing to do with Ohio State football and, perhaps, a handful of write-ups of stories that went viral online six days previously and have nothing to do with anything that matters.

Local print news is doing great, everyone.

I did, however, get a surprise this morning. A story about baseball! A baseball story that was not buried seven clicks into the sports section, but one that was surfaced onto the front page of the website!  The story was about Michael Brantley signing with the Astros.

Normally I’d be dead chuffed! But then I saw something which kinda irked me. Check out the headline:

Is Michael Brantley “leaving” the Indians? I don’t think so. He’s a free agent signing with a baseball team. He’s no more “leaving” the Indians than you are “leaving” an employer who laid you off to take a job at one of its competitors. This is especially true given that the Indians made no effort whatsoever to sign him. Indeed, they didn’t even give him a qualifying offer, making it very clear as of November 2 that they had no intention of bringing him back. Yet, there’s the headline: “Michael Brantley leaves Indians.”

To be clear, apart from the headline, the article is unobjectionable in any way. It merely recounts Ken Rosenthal’s report about Brantley signing with the Astros and does not make any claim or implication that Brantley was somehow disloyal or that Indians fans should be upset at him.

I do wish, though, that editors would not use this kind of construction, even in headlines, because even in today’s far more savvy and enlightened age, it encourages some bad and outmoded views of how players are expected to interact with teams.

Since the advent of free agency players have often been criticized as greedy or self-centered for signing contracts with new teams. Indeed, they are often cast as disloyal in some way for leaving the team which drafted or developed them. It’s less the case now than it used to be, but there are still a lot of fans who view a player leaving via free agency as some kind of a slap in the face, especially if he joins a rival. Meanwhile, when a team decides to move on from a player, either releasing him or, as was the case with the Indians and Brantley, making no effort to bring him back, it’s viewed as a perfectly defensible business decision. There was no comparable headline, back in early November, that said “Indians dump Brantley.”

Make no mistake: it may very well turn out to be a quite reasonable business decision for Cleveland to move on from Brantley. Maybe they know things about him we don’t. Maybe they simply know better about how he’ll do over the next year than the Astros do. I in no way intend for this little rant to imply that the Indians owed Brantley any more than he owed the Indians once their business arrangement came to an end. They don’t.

But I do suspect that there are still a decent number fans out there who view a free agent leaving his former team as some sort of betrayal. Maybe not Brantley, but what if Bryce Harper signs with the Phillies? What if Kris Bryant walks and joins the Cardinals when he reaches free agency? Fans may, in general, be more enlightened now than they used to be, but even a little time on talk radio or in comments sections reveals that a number of them view ballplayers exercising their bargained-for rights as “traitors.” Or, as it’s often written, “traders.” I don’t care for that whole dynamic.

Maybe this little Michael Brantley headline in a local paper that doesn’t cover all that much baseball is unimportant in the grand scheme of things, but it’s an example of how pervasive that unfortunate dynamic is. It gives fans, however tacitly, license to continue to think of players as bad people for exercising their rights. I don’t think that belief will ever completely disappear — sports and irrationality go hand-in-hand — but I’d prefer it if, like teams, athletes are likewise given an understanding nod when they make a business decision. The best way to ensure that is to make sure that such decisions are not misrepresented.