Toronto Blue Jays give Vladimir Guerrero Jr the largest signing bonus in MLB history
Photo credit: Sportsnet
Vladimir Guerrero Jr. not only secured a record-breaking deal, the highest ever for a Major League Baseball first baseman and for a Canadian professional athlete, but several elements of the contract also seem poised to provide long-term benefits for the Blue Jays star.
Toronto Blue Jays star first baseman Vladimir Guerrero Jr.'s contract extension can save him millions in tax dollars.
Guerrero Jr.'s new 14-year, $500-million contract extension was made official by the Toronto Blue Jays on Wednesday includes a massive $325-million signing bonus.
Rob Longley of MSN writes in a recent report that the remaining $175 million will be paid in the form of salary at varying sums throughout the lengthy term of the deal.
The prime benefit for that structure, a full 65% of the full value as a signing bonus, would appear to be to get a sizeable break from the Canadian tax man. -Longley
Guerrero Jr. owns a home in Florida, where he spends most of his off-season and where his daughter goes to school. This means that on the $325 million portion of his contract, he would likely be exempt from Canada's high tax rates from living in the United States.
It's unclear how much that would benefit him, but it would likely be in millions of dollars as Florida is a popular 'home' state for high-paid professional athletes from several sports for its tax benefits. -Longley
Another advantage of receiving a large signing bonus is that Guerrero Jr. would keep that portion of his contract even if there's a work stoppage during the 14-year term. The current collective bargaining agreement is set to expire after the 2026 season.
Longley also writes that Guerrero Jr. is scheduled to get the first $20 million of his signing bonus in the next month, but since the extension doesn't kick in until the 2026 season, it will not count against the Jays payroll in 2025 for luxury tax purposes.
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