Vlad Guerrero Jr. contract: Explaining what $325M signing bonus means for Blue Jays, a possible work stoppage

This week’s great news in baseball’s chief baseball this week, a 500 million dollar extension of Vladimir Guerrado Jr. has been signed with blue Jay. On Wednesday, the transaction was officially announced by Jiam, that is, each obstacle has been cleared, and Vlad Jr. is closed, presumably the rest of his career.

The details of the Guerrero’s contract were also left on Wednesday, and the jaw department is that it includes a $ 325 million signature bonus, which is 65% of the total value of the contract. According to the sportsThere is no deferred money, no output provisions and full trade provision. This bonus is paid $ 20 million this season, then the rest of the bonus applies from 2026-39.

The bonus still counts on the average annual value of the contract. This means that in 2026-39 the guerrero’s luxury tax figure will be $ 35.71 million each year.

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So why is such a huge deal of transaction signing a bonus just instead of direct salary?

For a better period of time, it is a working job on business, which seems to benefit Guerrez than the team. The signing of bonuses for tax purposes is a player for permanent residence of the player, which is in Florida, a state without income tax. In other words, Guerrero should be taxed in Toronto with its regular salary, but signatory bonus taxes are depicted in Florida.

The other wrinkle is that the player’s salaries are not paid during any work stop, such as the alleged shutdown in 2020, and if there are future labor disputes (strike or strike). Salaries are paid based on the number of games played. On the other hand, the bonus will be paid independent. Guerrero is guaranteed that amount.

Perhaps this was the blue Jayner, which gave a Guerrero additional stimulus before the free agency’s hit, but the bonus is a great sweetener for Guerrero.