BARACK OBAMA’S victory in the general election could be bad news for baseball players. But never fear – Scott Boras is here.
Boras, a man who has brokered more big-money deals than Jerry Maguire, is already thinking of ways that his clients can avoid the near-5 percent rise in the top federal income tax proposed by America’s President-elect.
On a day when Major League Baseball commissioner Bud Selig warned of the effects the recession could have on his sport, the top agents were more concerned by the tax implications of a shift in power.
Obama’s election campaign included a proposal to increase federal income tax from 35 percent to 39.6 percent for households bringing in more than $250,000 annually.
That includes every Major League player as the minimum wage is $400,000. But for a free agent such as Manny Ramirez or Mark Teixeira, who are likely to earn around $20 million in 2009, their taxes could increase by more than $900,000.
Boras, who represents both Ramirez and Teixiera, is reportedly considering counteracting this by asking for a bigger signing bonus.
If the bonus was paid before January 1, it would likely be subject to the current rate of taxation.
New President could hit baseball
“There's some consideration to be had with the impact of the election,” Boras is quoted as saying by the Associated Press.
As I said in yesterday’s column, Boras’s job is to get the best deal for his client…and nobody does it better.
He bases his negotiations on numbers crunched by his 40-strong staff at high-tech offices in Newport Beach, California.
Whether Boras is such good news for the average baseball fan wanting to purchase a season ticket and a Derek Jeter shirt is another matter.
Spiraling salaries are pricing the Average Joe out of the market to watch live games, particularly here in New York.
So are we really going to be concerned that A-Rod and Manny may have to stump up another million in taxes? At $25 million a year, that’s some hardship!
There are those who believe that, thanks to television, baseball and its mega-rich superstars will always be recession-proof.
They may well be right. But just remember the story about the goose that laid the golden eggs.