The big news off scope this week in the major baseball league was the extension of $ 500 million dollars that Vladimir Guerrero Jr. signed with the Blue Jays. The agreement was officially announced by the Jays on Wednesday, which means that each obstacle has been erased and that Vlad Jr. is locked up for, probably, the rest of his career.
The details on the Guerrero contract also released on Wednesday and the breathtaking part is that it includes a signature bonus of $ 325 million, which represents 65% of the total value of the contract, according to Sportsnet. There is no delayed money, no withdrawal clauses and a complete non-exchange clause. From this bonus, $ 20 million is paid this season, then the rest of the bonus is distributed from 2026-39.
The bonus always has for the average annual value of the contract. This means that from 2026-39, the luxury tax figure in Guerrero for Blue Jays will be $ 35.71 million each year.
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RJ Anderson
So why is such a large part of the agreement a signature bonus instead of a simple salary?
For the lack of a better term, these are documents on the company that seems to benefit more in Guerrero than the team. The signature bonuses for tax purposes are represented via the player’s permanent residence and for Guerrero, that is to say Florida-a state without income tax. In other words, Guerrero will be taxed in Toronto on his regular salary, but the signature bonus taxes resulted from his address in Florida.
The other wrinkle is that players’ salaries are not paid during a work stoppage, such as the closure coded in 2020 and if there are future labor disputes (a strike or a locking) which eliminate the games. Salaries are paid according to the number of games played. The bonus, on the other hand, will be paid despite everything. Guerrero is guaranteed this money.
It was perhaps the Blue Jays giving Guerrero an additional incitement to sign an extension before hitting the free agency, but the bonus seems to be a major sweetener for Guerrero.
