David Price’s $217 Million contract with the Red Sox surpasses other starting pitcher’s recently signed contracts however, where does the contract’s net present value place it in comparison? INTRODUCTION This week David Price signed a seven year $217 million contract with the Boston Red Sox, while Zack Greinke, who optioned out of his contract with the Los Angeles Dodgers, signed a six year deal with the Arizona Diamond Backs for $206 million.  Price and Greike’s contracts ha

Max Scherzer’s new seven year $210 million contract is a good example of how proper tax planning in a negotiation can increase its’ overall net (after tax) value. Much has been made of the resident and non-resident tax liability that professional athletes face in the multiple states and cities in which they preform services.  Often referred to as the “Jock Tax” this liability is unique to each professional team and is determined by each team’s home and away schedule as well a

The Oakland A’s have another disadvantage when pursuing free agents on the open market The plight of Billy Bean and the small market Oakland Athletics was highlighted in Michael Lewis’ 2004 book Money Ball. The stakes are different today and Bean’s biggest challenge comes from the state of CA rather than the large market teams in the League. California’s income tax structure has created a burden for its home teams: the state’s maximum income tax rate for 2013 is 12.3% with an

Earlier this year, Federal Reserve Chairman Ben Bernanke stated, “Under current law, on January 1, 2013, there’s going to be a massive fiscal cliff of large spending cuts and tax increases.” The tax increases include cancelling the Bush era tax cuts of 2001 and 2003 which would increase the individual tax rate for those in the highest tax bracket from 35% to 39.5% and eliminate the payroll tax holiday, which would increase the payroll tax withholding from 4.2% to 6.2%. What d

Alex Rodriguez made headlines this past post season because of his ill-timed slump. However, the irony is: this slump may actually improve his financial situation by more than three million dollars. Over the last three post seasons, Rodriguez hit only 10 singles and two doubles in his 75 official at bats for a .160 batting average. To make matters worse, this past post season he totaled just three singles and 12 strikeouts in 25 at bats. This slump and consequential benching

Steve Nash’s recent signing revives international income tax debate Steve Nash is a two time league MVP who has played in the NBA since being drafted by the Phoenix Suns in the 1996 entry draft. Nash, from Johannesburg, South Africa, was raised in British Columbia and with his recent free agent status had many Canadians wishing he would return to Canada to sign with the Toronto Raptures. The potential of Nash signing in Toronto has renewed the debate over the tax liability of

Curt Schilling’s Investment Failure Represents the Latest Example of the Unique Financial and Tax Implications Facing Professional Athletes Curt Shilling pitched 20 years in the major leagues and recorded 216 wins, two World Series titles, and millions of dollars in total earnings.  Earlier this month, it was announced Schilling lost a majority of his savings. Turns out he owned 83% of 38 Studio, a video game company that filed for Chapter 7 bankruptcy protection in Delaware,

State income tax on non-residents incorrectly labeled a jock tax Author: Alan Pogroszewski The term “jock tax” first appeared in an article by Elizabeth Ekmekjian, “The Jock Tax: State and Local Income Taxation of Professional Athletes” published in the Seton Hall Law Journal in 1994. Since then, the jock tax has been highly publicized—but with little understanding of the difference between income taxes that specifically target professional athletes and the basic constitution

The Cautionary tale of Darryl Strawberry’s Battle with the IRS Darryl Strawberry’s tax and financial troubles tell a cautionary tale about how professional athletes can become prime targets for the IRS. Strawberry, whose career ran from 1983 to 1999, is still battling the IRS, according to a Notice of Levy reportedly sent to HarperCollins Publishing for $405,522 in back taxes, penalties and interest. These tax issues came to light when Tracy Strawberry, Darryl’s third wife,