Front load the first three yrs of the contract at say 40 mil per. Give him an opt out after three yrs, which is when Altuve and Bregman are FA. Tucker and Yordan are under team control through '25. One way around all of this is if Crane is willing to go into the luxury tax. It's VERY rare to have a long window of truly being competitive (enough to win a WS). That they were able to have Altuve, Springer, Correa, Bregman (and others) together at the same time again is VERY rare. So Crane says he wants to win? Yes he's been willing to have a high team payroll but right now he's the owner over a team that got busted for cheating. Guys like Hinch and Luhnow were fired but obviously Crane isn't going to fire himself. The phrase "the buck stops here" should make Crane accountable. It took a long time to accumulate the caliber of players they have right now. Personally I see that window being at least three yrs. Find a way to make it work with Correa and being willing to pay the luxury tax during that time frame (next three yrs). Crane and the ownership group can sell the team for over Two Billion $$ and that's when they make their $$. Do you really want to win Crane?? If so do what the LAD have done. Their payroll is up around 275 mil this yr. Yes I know this market isn't L.A. but they could do it if they really wanted to. Only reason you do it is the core of players you have right now and you try to seize the moment. Yes it's not my $$ but I also have a hard time believing that Crane didn't know what was going on (the cheating). They may even offer Correa the front loaded deal with the opt out and he still walks but it would be nice to see him try to find a solution instead of letting these generational players walk and getting nothing in return. I guess we'll see how it plays out.
I'm ready for some baseball. But Correa show awareness of the accounting. It's not the top line that matters. It's the BOTTOM LINE. In that vane, make sure you check out housing prices and other prices to incorporate below the Bottom line financial costs of moving to a city infested with DEMONs & RATS. I assume he lives outside the City Limits like most financially astute athletes do. Richmond/Rosenberg is popular, or at least was.
Should be interesting. I'm sure Crane's son, or whoever is running the business side these days, has to be figuring out what ultimately drives up season ticket sales and attendance in general. In Houston, its winning... along with household names. Winning by itself can help develop household names that otherwise weren't one, but its not automatic. Correa/Altuve/Bregman are already a brand... nearly every jersey in the stadium involves one of those three. Pena could be a brand in 2-3 years, but that may also be at a time where the team's best years are likely already behind them. Crane wants to win big with this core... but also wants the stadium to be full doing it. Correa as a brand does feed into the business side of things for the next 3 years.
I think Correa is smarter than a lot of ball players and I'm impressed with his takes in these interviews. He wants to maximize his earnings over he long term and the structure of the contract is going to be just as important as the big reported numbers. He's approaching it in a rational and thoughtful way. While no state income tax is nothing to dismiss, I am under the impression that if he stays a Texas resident contracts from other teams can still be structured in ways that lessen state tax impacts. It sounds to me like the "disrespect" was about him having a clear sense of what he thinks he's worth (and that being more than what he was offered) and not something that's going to influence his decision beyond whatever the next offer is. I don't think Carlos was going to take a discount last year and the Astros were not going to make a non-discounted offer prior to seeing him healthy for a full year. I think both sides understood that and there wasn't really any negotiation to be had at the time. Ultimately, the question is how much are other teams to going to offer and will the Astros be willing to match it. Personally, I don't see him getting a Tatis Jr or Lindor level contract, but if he does there is no way I could see the Astros will matching that.
I'm not a tax accountant nor do I have a CPA....but how did he go from 37% Federal tax in California to 10% Federal tax in Texas? Aside from that weird 10% number (which could just have been a number he threw out there to illustrate how much he would save here)... Playing for the Dodgers or any California team @$35 million: Federal Tax (37%): $12.950 million California State Tax (12.3%): 4.305 million $35 million - $12.95 - $4.305 = $17.745 left Playing in New York @ $35 million: Federal Tax (37%): $12.950 million New York State Tax (10.9%): $3.815 million $35 million - $12.950 - $3.815 = $18.235 million Say he gets creative and lives in Jersey and commutes to New York @$35 million: Federal Tax (37%): $12.950 million New Jersey State Tax (8.97%): $3.1395 million $35 million - $12.950 - $3.1395 = $18.910 million Effectively, that 10 year, $350 million contract would be reduced down to (assuming he plays out the entire contract and plays it out in the same state he signed in): CA: $177,450,000 million after taxes NY: $182,350,000 million after taxes NJ: $189,100,000 million after taxes So how disrespectful was an offer of 5 years, $125 million in Texas? Staying in Houston at $25 million: Federal Tax (37%): $9.25 million $25 million - $9.25 million = $15.75 million So in five years, in Houston, after taxes his contract net value would be worth $78.75 million. Definitely lower than the other three scenarios but not THAT far off in terms of average take home pay compared to the California total. Also, it would have give him a chance to sign another contract at age 32. Of course his production could slow down by then, thereby decreasing his next contract. So what kind of contract would be comparable if we bring him in at 10 years? Using the high value from living in NJ, he would need to have an average salary of $18.910 million a year * 1.37 (factoring in income tax) = $25,906,700 or a 10 year $260,000,000 contract just to have a nice round number. This, of course, don't factor in other variables like cost of living, potential endorsement deals, etc. So his comment about taking a $270 deal being better than a $350 deal in Cali is correct (never disputed Correa's intelligence) but I think he is wanting another $30 million on top as a "disrespect fee". I'm sure his agent and/or accountant has done the math but, just like any great athlete, you have an ego to satisfy but also you need to feel that you're wanted and loved and appreciated by the team you're signing with. What better way to do that than to give him more money, from $260-270 to $300? For ***** and giggles: $30 million in Houston: Federal Tax (37%): $11.1 $30 million - $11.1 = $18.9 million In order for him to make $18.9 million after taxes in California, Correa would need a contract that would pay him about $37 million a year. Now you're talking about a 10 year $370 million contract...that's more than Lindor's contract and entering in Mike Trout territory ($426,500,000) in terms of total dollars. Imo, 10 years $275 would be the ceiling or 8 years $220 (same average salary). That $2.25 million difference between $30 million and $27.5 might not sound much but it all adds up towards the total team salary and could help add to funds to acquire other needs.
It doesn't quite work that easily because profession players have to pay a jock tax as in they have to pay the California taxes when they play in California. The same goes for New York. So Correa would only be saving tax dollars on the games he plays in Texas. But you also failed to include the NY city income tax that is 3.876%. Detroit has a city tax of 2.4%. The Marlins though can offer everything we can offer in terms of tax benefit.
IIRC jock tax applies to non-residents. So if Correa signs and lives in California, the jock tax for California wouldn't apply to him. As for NYC, I wasn't aware of the city tax so thanks for pointing that out. But, like my scenarios, he could just live in Jersey and commute into town to work. As for the difficulty (or lack there of) of my math I didn't say it was gospel...it's just a estimate. Again, not a tax accountant nor a CPA.
Carlos us going where he gets the most take home pay. Taxes helps make an Astros offer slightly more attractive than a NY one, but likely not to the point it will matter if another team is doing a 10 year 300 million contract. The best scenario for retaining him is the CBA situation and other SS on the market keep offers in the 7 year / 250 million range. Even then I don’t know if the Astros would do it. Next best is if he would be willing to take a shorter front loaded contract with an opt-out, but if someone is offering 10 at 300, the Astros offer would have to be really front loaded for him to pass on the 10 year one.
Carlos Correa isn’t coming back. Look for Astros to bring up Pedro Leon next year. Astros will spend for a quality starting pitcher Will resign yuli. Will give a qualifying offer to Verlander We will still have a solid offense while introducing new team controlled talent to the mix like Myers and Leon. Astros are going to still be a great team next year without Correa. He is awesome but the 10 year 400 million contract is not.
I've never bought into the long time argument about state taxes making a difference with regards to offers a player will or will not accept. In fact the next time I hear about a player taking less from a team due to state taxes will be the first time.
Correa is the one that brought it up in his Spanish language interview. He's going to do the math on any contract offer and see which city he'd have the most take home pay.
It rarely happens because some team will cough up the money to the point where the state tax wouldn’t even matter. If we want a “sorta” example it would be Dwight Howard signing here instead of staying in LA. Of course there were other factors that came into play but he did take “less” to play here.
Exactly, it does have an effect but it is not so big a difference it usually makes a difference. I think there are ways to structure things so it matters even less than just looking at tax rates would make you think.
I swear to god if we win it all, Crane just needs to set up a Venmo account and tip jars across downtown. Label it the CorreaTuckerYordanFramberUrquidy Find and Houstonians would donate half of the required sum to keep em all.
Good stuff. One thing you left out. In NY there's also a city tax he'd have to pay. At least there was when I lived there.
I think 2021 Carlos Correa and 2019 Anthony Rendon should be valued similarly (maybe even an edge to Rendon). Rendon signed a 7 year, $245 million contract with the Angels after winning the 2019 World Series and being the best position player on his team. Rendon is the better hitter, while Correa plays a more premium position and is 2 years younger than Rendon was when he signed the contract. Both have outstanding postseason credentials. Rendon's hip surgery and bad 2021 have made his contract not look very good for the Angels. They are likely regretting the signing at this point in time.
Uhh age is a huge difference. Rendon's first season with the Angels he was more or less at 30. Next year Correa will be 27 through most of the season. If the Angels got Rendon's production from 27-30 in the first three years of the contract, then that $245M contract looks like a great deal.
My point is that current Astro players have to play local taxes when they play away games. So they do play state and city income taxes on half of their games, so the tax benefit only applies to half of their games. Since he works in NYC, he has to pay NYC income tax regardless of where he lives.
