/r/baseballcirclejerk
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Then there could be deep drives to the back wall and we could call them backshots. “Bryce Harper gives the angels back to back backshots!”
My daughter and I made an offering to Rocky Colavito and Chief Knockahoma
Happy Thanksgiving
I won't rest until r/Nationals is freed
Shohei Ohtani’s $700 million contract over 10 years pays him $2 million per year, meaning the bulk of his earnings are deferred. If he decided to approach JG Wentworth to cash out his deferred payments, here’s what the process and payout might look like.
Contract Breakdown
• Total contract value: $700 million
• Annual salary (upfront): $2 million/year
• Deferred payments: $680 million spread across 10 years, starting after the contract ends.
For simplicity, we’ll assume equal deferred payments over the 10 years following the contract:
• Deferred payment schedule: $68 million/year for 10 years.
What JG Wentworth Offers
1. Calculate Present Value of Deferred Payments
To determine how much Ohtani would get today, JG Wentworth applies a discount rate, reflecting the time value of money (inflation) and their profit margin. This rate is typically 7-10%, and we’ll use 8% as an example. Deferred payments spread over 10 years at 8% would have a present value of about $460 million.
2. Subtract JG Wentworth’s Fees
Companies like JG Wentworth often charge 20-30% in fees for their services. Let’s assume 25% here:
• Fees: $460 million × 25% = $115 million
• Lump Sum Payout: $460 million - $115 million = $345 million
Final Lump Sum
If Ohtani cashed in his deferred payments with JG Wentworth:
• He would receive $345 million immediately.
• This is 49% of the original $700 million contract value, highlighting the steep costs of early cash-out options.
Key Considerations
• Time Value of Money: While $345 million today is less than $680 million over 10 years, having immediate access to the money could enable investments or other ventures that generate additional income.
• Taxes: Depending on the structure, lump sums might push him into higher tax brackets, reducing net earnings further.
Based on his hit by pitch numbers we can only assume he’s always down to take one for the team
Literally any team can do it, it's not against the rules.