The massive off-field information this week in Main League Baseball was the 14-year, $500 million extension Vladimir Guerrero Jr. has signed with the Blue Jays. The deal was formally introduced by the Jays Wednesday, which means each hurdle has been cleared and Vlad Jr. is locked up for, presumably, the remainder of his profession. 

Particulars on Guerrero’s contract additionally got here out Wednesday and the jaw-dropping portion is that it features a $325 million signing bonus, which is a whopping 65% of the whole worth of the contract, in keeping with Sportsnet. There is not any deferred cash, no opt-out clauses and a full no-trade clause. Of that bonus, $20 million is paid this season after which the remainder of the bonus is unfold from 2026-39.

The bonus nonetheless counts towards the common annual worth of the contract. Because of this from 2026-39, Guerrero’s luxurious tax determine for the Blue Jays can be $35.71 million annually.

Winners and losers of the Vladimir Guerrero Jr. contract extension: How Blue Jays, Kyle Tucker, others fared

R.J. Anderson

So why is such an enormous portion of the deal a signing bonus as a substitute of only a straight wage? 

For lack of a greater time period, it is paperwork on the enterprise finish that appears to profit Guerrero greater than the group. Signing bonuses for tax functions are figured through the participant’s everlasting residence and for Guerrero, that is Florida — a state with no revenue tax. In different phrases, Guerrero can be taxed in Toronto on his common wage, however the signing bonus taxes are figured via his tackle in Florida. 

The opposite wrinkle is that participant salaries should not paid throughout any work stoppage, such because the COVID shutdown in 2020 and if there are future labor disputes (a strike or lockout) that remove video games. Salaries are paid based mostly on the variety of video games performed. The bonus, however, can be paid out regardless. Guerrero is assured that cash.

Maybe this was the Blue Jays giving Guerrero further incentive to signal an extension earlier than hitting free company, however the bonus seems to be a serious sweetener for Guerrero.