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Thread: 2014 Rotation

  1. #81
    Super Moderator MVP ashburyjohn's Avatar
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    Quote Originally Posted by Oldgoat_MN View Post
    Thank you glunn. That was very kind of you to find and post that.

    Please don't be offended if we don't all run off and read exactly what the IRS has to say on the matter.

    Peace
    Fair enough, and I guess your post is at least somewhat tongue-in-cheek. But the linked article is IMO pretty readable. "Amortize" was the hardest word in it that I couldn't just skip over, and anyone who's ever signed for a mortgage probably has an inkling about that.

  2. #82
    Super Moderator MVP ashburyjohn's Avatar
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    Quote Originally Posted by glunn View Post
    There is a recent IRS Field Advisory Memorandum that states the IRS position -- here is a link to a discussion of the IRS position.
    That treatment pertains to bonuses, which go to the player. (Well, minus the agent's fee, and so forth.) I think the intent is to cut down on financial game playing in how the player is compensated - to make it all the same under tax law, whether lump sums are paid or not.

    Since a posting fee goes to a third party, I'm not certain that the same logic applies - it's not financial gamesmanship, and it could be treated as a cost of doing business that year. There's no option (to my knowledge) to spread out the actual cash payment of the posting fee to the same number of years as the player contract. IANAL but if I were I'd probably want to pursue that a bit further with the IRS.
    Last edited by ashburyjohn; 10-23-2013 at 12:25 PM.

  3. #83
    Quote Originally Posted by ashburyjohn View Post
    That treatment pertains to bonuses, which go to the player. (Well, minus the agent's fee, and so forth.) I think the intent is to cut down on financial game playing in how the player is compensated - to make it all the same under tax law, whether lump sums are paid or not.

    Since a posting fee goes to a third party, I'm not certain that the same logic applies - it's not financial gamesmanship, and it could be treated as a cost of doing business that year. There's no option (to my knowledge) to spread out the actual cash payment of the posting fee to the same number of years as the player contract. IANAL but if I were I'd probably want to pursue that a bit further with the IRS.
    The primary guidelines for how assets are treated is the matching principle I posted earlier. Clearly, the benefit of a posting fee is realized over the course of the contract. I doubt the fact that the posting fee goes to a 3rd party matters. If the Twins purchased a piece of equipment for maintaining target field from one company, and the attachments from another company, the expenditures would be treated the same.

    Of course, the posting fee is not going to show up as part of the salary and a team would not be obligated to pay it if they traded for the player. However, the organization would be required to amortize the cost over the course of the contract.
    Last edited by Major Leauge Ready; 10-23-2013 at 03:05 PM.

  4. #84
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    Do we think the Pohlad's primary concern is whether the posting fee is part of the 2013 or other years' tax calculations? I don't.
    Lighten up Francis....

  5. #85
    Junior Member Rookie PSzalapski's Avatar
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    I like the original post's vague idea (I had a similar one), but they need to improve their lineup as well. Too many holes, and Ryan and Pohlad, I'm afraid, aren't committed to do anything drastic to make enough of a difference.
    Last edited by PSzalapski; 10-23-2013 at 03:41 PM.

  6. #86
    Quote Originally Posted by jokin View Post
    I think it's within the Twins wherewith-all to sign Haren, Hughes and Tanaka. If all 3 were signed at the numbers you propose, you're looking at $8.5/yr for Haren, $6.5/yr for Hughes and let's say $10M/yr for Tanaka. That's only $25M per year and seems entirely do-able.

    I just don't like the thinking that Tanaka should be considered automatically out of our price range, Target Field was built for just such an acquisition. Season Ticket sales and International marketing revenues would skyrocket for Terry Ryan for taking Jim Pohlad at his word...and finally firing the Shot Heard Around the World. Both Haren and Hughes, and an impact FA target like Ellsbury might be immediately more inclined to consider the Twins and Jim Pohlad's sincerity in "spending money" to avoid future embarrassment as rock-solid-sentiment.

    Heck, you could also trade Correia for prospects or combined in a package deal for a First Baseman.....and now you've knocked down your annual cost for the SP acquisitions to $20M and helped fill a hole at another spot. Throw in Ellsbury and the payroll still comes in well under $100m.
    Yeah, but you're forgetting that Tanaka will also require at least a $40M posting fee, in addition to $10-$12M a year. Lets say that Tanaka gets a $50M posting fee and a 5/$50M contract. Technically that's $20M per year, which, in theory, leaves the twins with $20M left to spend. It would be great, but it won't happen.

  7. #87
    Head Moderator All-Star glunn's Avatar
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    Quote Originally Posted by Oldgoat_MN View Post
    Thank you glunn. That was very kind of you to find and post that.

    Please don't be offended if we don't all run off and read exactly what the IRS has to say on the matter.

    Peace
    I am not offended. The link was intended mainly for those who were talking about the tax issue.

  8. #88
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    Quote Originally Posted by ChuckPaine View Post
    Yeah, but you're forgetting that Tanaka will also require at least a $40M posting fee, in addition to $10-$12M a year. Lets say that Tanaka gets a $50M posting fee and a 5/$50M contract. Technically that's $20M per year, which, in theory, leaves the twins with $20M left to spend. It would be great, but it won't happen.
    Agreed. I didn't forget that and I understand that that is the case. But the posting fee doesn't count towards the payroll, and all the advantages that it entails. Pohlad is on public record that the embarrassment must stop, and that he will open the checkbook- and the last 2 years of cost-cutting, the various windfalls of revenue streams from Target Field, coupled with the "found money" from the new media deal makes paying out a one-time posting fee go from feasible to very do-able....but of course, we resume our in-kind agreement.....

    it won't happen/
    Last edited by jokin; 10-24-2013 at 03:16 AM.

  9. #89
    Quote Originally Posted by jokin View Post
    Agreed. I didn't forget that and I understand that that is the case. But the posting fee doesn't count towards the payroll, and all the advantages that it entails. Pohlad is on public record that the embarrassment must stop, and that he will open the checkbook- and the last 2 years of cost-cutting, the various windfalls of revenue streams from Target Field, coupled with the "found money" from the new media deal makes paying out a one-time posting fee go from feasible to very do-able....but of course, we resume our in-kind agreement.....

    it won't happen/
    So what does it count toward? It won't show up it whatever source might list "payroll" but it is part of cost associated with that player. The Twins are going to recognize it as payroll expense. You are confusing how MLB views this expense for luxury tax vs how it has to be accounted for as a business. The short version is that the Twins are not going to pretend a posting fee is not part of the cost of a given player. They are going to include any posting fees and/or bonus expenditures in their 52% budget for payroll expense.

  10. #90
    I'm guessing the Twins end up with none of the pitchers speculated on in this thread (with the possible exception of Narveson). Some posted the Giants wouldn't give Lincecum the $14 mil qualifying offer, but he ended up getting more than that. The prices are going to be high this off-season, and the Twins just don't seem to want to win bidding wars. Especially when it comes to long contracts for pitchers on the downside of their career. And I think this is pretty astute.

    Look for them to sign someone like Jake Westbrook to a one or maybe a 2 year contract. I believe the Cardinals will decline his option. He'd provide a veteran to help bridge the gap to the Twins prospects, but there will not be a bidding war for him. No one will be excited by the signing, but the Twins aren't making the playoffs next year. I'm not saying this is a great move, but it matches the Twins philosophy more than going out a signing guys from the top of the market.

  11. #91
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    I could see Westbrook coming here, on a Correia type deal. Might be a few years too late, though -- Westbrook somehow managed to issue more walks than strikeouts last year.

    Interesting note on Westbrook -- Cleveland extended him 3 years into free agency at $10 million per, and he was injured for the first two of those seasons. Looked like the kind of contract the Twins fear and avoid. But in the third season, he was healthy but below average, and was flipped at the deadline for a high K minor league starter in Corey Kluber who looked pretty decent in 2013.

  12. #92
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    Quote Originally Posted by jokin View Post
    I think it's within the Twins wherewith-all to sign Haren, Hughes and Tanaka. If all 3 were signed at the numbers you propose, you're looking at $8.5/yr for Haren, $6.5/yr for Hughes and let's say $10M/yr for Tanaka. That's only $25M per year and seems entirely do-able.
    I've got to think that Hughes and Haren will cost more than that... Maybe not Haren given the injury risk. I'd be all over Hughes for a little more than KC money. Something tells me though that he's going to get a 3-4 year deal north of 10M/year. I hope you are right, because if that's what the numbers are, we should see one or two of them in a Twins uni next season.

  13. #93
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    Darren Wolfson tweeted:

    Terry Ryan confirmed to me the he would sacrifice his 2nd rd pick to sign a FA. Still seems like a long shot. Maybe Ervin Santana.

  14. #94
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    Either go all in on Masahiro Tanaka 70+ million posting fee and 12 million per over 6 years.
    or
    J.Johnson 1+1 (9 million and a 1million buy out and the option year at 15 million)
    Kazmir 2 year+1 (8.5 per .1 million buy out or 12 million for his option year)
    Phil Hughes 3 years 8 million per
    Erick Chavez 4.5 million 1 year To platoon with Trevor
    R.Fucal 2.5 million middle infield mentor

    Now most important , no catcher playing in the outfield....and
    Only Willingham or Arcia in the outfield at 1 time , we need speed and more speed in the outfield, so Ham and waldo can never be in the outfield at the same time...

    There you go improved rotation and infield help all for around 2012 payroll prices

  15. #95
    I had this great dream that the Twins posted $70 mil and got Tanaka. TR came out in the press conference and explained how much he appreciated all of us fans for dealing with the disgusting slop of players the last few years, and that the ownership felt it was important to spend the money they had been saving.... Wouldn't that be something??? :-)

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