The Blue Jays finalized their five-year free agent deal with Anthony Santander this week. The deal came with a $92.5MM guarantee but was known to include heavy deferrals. Sportsnet’s Ben Nicholson-Smith first reported on Monday that MLB calculated the contract’s net present closer to $70MM.
Shi Davidi of Sportsnet reported more specifics on the contract structure this afternoon. The NPV landed just under $68.6MM, which comes with an approximate $13.7MM annual competitive balance tax hit. The deal includes $61.75MM in deferred money. The specific layout is as follows:
- $13.5MM signing bonus ($6.75MM deferred)
- $13.5MM salary in 2025 ($10MM deferred)
- $16.5MM salary in 2026 ($10MM deferred)
- $16.5MM salary in 2027 ($10MM deferred)
- $14.75MM salary in 2028 ($10MM deferred)
- $12.75MM salary in 2029 ($10MM deferred)
- $15MM club option for 2030; guaranteed a $5MM buyout, which would be completely deferred
Santander has an opt-out after the ’27 season. He’s owed $60MM over the first three years, so he’d be weighing whether to leave two years and $32.5MM ($25MM of which would be deferred) on the table. If he opts out, Toronto can override that by guaranteeing his 2030 salary at $17.5MM. That would also escalate Santander’s salaries for the 2028 and ’29 seasons to $17.25MM and $15.25MM, respectively. The maximum value is $110MM over six years — which would only be reached if Santander opts out and the Jays override it.
At the start of the offseason, the slugger was reportedly seeking five years and a nine-figure guarantee. He got the five years but came up well shy of $100MM from an NPV perspective. MLBTR predicted Santander for four years and $80MM at the beginning of the offseason. He beat that on raw money but did not get there in terms of net present value.
The Jays are into luxury tax territory. They’re taxed at a 20% rate on spending between $241MM and $261MM. They’re close to the $261MM cutoff. Adding Santander likely comes with around a $3MM tax hit for the upcoming season. Toronto would be taxed at a 32% clip for spending between $261MM and $281MM.
Well, well, well, how the turntables something something.
How the worm has turned
@war who the hell even knows that phrase anymore, let alone what it means? Shakespeare?
Yet it just sarcastically came out of my mouth as I read the article just now…… Back to my coffee.
It actually is Shakespeare indeed. Basically even the lowliest creature (a worm) will turn on someone if treated badly enough. From the Taming of the Shrew I think but I may be wrong on that. Doesn’t really apply here but it’s always fun to literally picture a worm slowly changing direction.
Yeah, but everyone knows that Canadian deferrals are different than their American counterparts.
Probably call them Johnnies or something silly like that.
Yup there are tariffs on Canadian ones.
Bigly!
Bart – I’d like to hear from O’s fans now about the swap of O’Neill for Santander.
O’Neill at $16.5M annually vs Santander at $13.7M annually ….. the sad O’s offseason continues.
I believe oneil is younger, guaranteed fewer years. Albeit injury prone. Remember at the beginning of the offseason all signs pointed to santander looking for a mega payday. Hes obviously lowered his expectations since then but the orioles had already moved on. I dont think the difference between the 2 is that great when you look at it. Santander had a great year, but it was an outlier.
Porcupine – Let’s do the usual 3-year lookback ….
Santander = 460 Games, 8.3 WAR, 125 OPS+, .795 OPS
O’Neill = 281 Games, 4.1 WAR, 111 OPS+, .765 OPS
And just imagine if the O’s hadn’t moved the walls farther and higher before the 2022 season.
I’m sure Jays fans would rather have O’Neill
O’s fan here. I don’t like it. But I could be wrong in a couple years.
If O’Neill plays well enough, He opts out and makes room for another FA or one of our prospects to come up and flourish – this is assuming Elias knows what he is doing.
With Elias, I think he has done a hell of a job drafting and developing. But the big boy moves like FA signings, hot stove trades and trade deadlines leave a lot to be desired.
Tib – That’s a fair assessment. Everyone thought before last year it was the old ownership that was tying his hands on big moves, but it’s the same old same old even with the new ownership. Has to be frustrating with the Gunnar-Adley-Colton etc window and yet they are not making the moves to truly contend for a championship.
bucs – I think production and playing at least 115 games is more important to Jays fans than where they are from.
What deferrals this is an outrage!
When Gen Z become GMs. “Just pay them all later! That way it’s someone else’s problem when the time comes” lol
Sounds like boomer philosophy to me if I’ve ever heard it.
It’s exactly the boomer philosophy. ‘I got mine’ should be their official slogan.
Dodgers fans smh….these referrals reflect how the rest of the league can’t compete with the spending power of 4/5 large market teams. Once they all pass on a guy – for him to get a salary he desires – he has to take 2/3 of it on deferrals.
The system is beyond broken and the dodgers ruined it ! Stop trying to validate far play – every single thumbs up you get will only come from other dodger fans lol
If they’d bring back the thumbs down – possibly the most disliked comment in mlbtr history
Many other comments I’ve seen are more worthy of being the “most-disliked” compared to that one. Like a big whiffa, that was definitely a swing-and-a-miss
Back the in the old trailer swamps where I’m from it is a SIN to use finances in an intelligent way in order to build a winning sports team. Deferrals are wrong because we decided last winter they were and that’s that. AND they are extra double wrong if those low down dirty Dodgers do it because they are trying to WIN and I don’t like them and I don’t like that they are tryin to win so hard.
This is what you all sound like.
Damned Dodgers and their deferrals.
Who even knows if this current salary structure will still be in place after the current labor agreement expires in 2027. Deferred money now might not even be considered after 2027. Anything is possible
@Lawrence
They have contracts. They can’t be negated. No way world or be retroactive to contracts issued already.
@Lawrence
The only people who care about deferred money are in the comments section of MLBTR. It’s not going to be as big of a deal in the next CBA as a lot of fans like to believe.
If they decide to count the deferred money in a different way towards the payroll then the teams will rectify that by offering less deferred money over the long run to where they can keep their payroll in smaller luxury tax brackets.
There is a reason why teams hire intelligent people
to run their front office. They will find a way to make it work.
I suggest you check out a few baseball subs on Reddit, deferrals in baseball are a hot topic. Also, take a peek at social media like FB and X – many, many people are discussing deferrals, and not just on MLBTR.
GB, all the fans in the world could complain about deferrals and it would change absolutely nothing. If the owners don’t care then they’re not going anywhere. Complaining about them is a waste of time and makes fans look like whiny losers.
GB – Yeah it’s kinda hysterical how people suddenly realize deferrals are a thing even though they’ve been around for many decades. Love the manufactured outrage.
The issue with deferrals is really good players will gladly do it for LAD knowing its TV deal will allow them to keep signing other fantastic players/guaranteed playoffs every year even if that person underperforms.
Those same players will not defer much or anything for 80% of the other clubs who aren’t in the position to keep stockpiling high end salary guys via FA or trade. They’ll say give me my money now.
The NY teams could go deferral crazy moving forward (and Cubs/Boston if they choose when timing is right).
It’s a nothing-burger. If the owners and the players like it, then it stays.
The federal and state IRS might have some issues, but no way this becomes a labor issue.
It’s an issue because teams can add players at a lower cost to their annual budget. National and local sports writers have written about it, so It will be a talking point no doubt. I don’t think it’s going away, but I think the obvious resolution would be limiting deferred money to a small set percentage.
cws – It’s happening now with LAD only because they are offering more money overall.
It’s been going on for decades with OTHER teams.
Look at the Red Sox, they are still paying Manny Ramirez and Dustin Pedroia! And Devers will have his deferral payments from 2034-2043! And Sale had huge deferrals with his Red Sox extension!
Sal – It’s not a lower cost.
Ohtani would NOT have gotten $70M annually if he didn’t have any deferrals, he would have gotten the same $46M annually.
Deferrals quite often benefit both player (lower taxes) and team (2 years cash flow before escrow funding begins) so why would MLB or the union have a problem with it?
Right. It is more of a competitive issue that league or players will not prioritize. Another leverage play a handful of large market teams can utilize with greater ease.
Attendance and interest outside the largest cities would have to really crater for status quo not to continue. Might take couple decades as the loyal older fans of game are no longer around……and whether youth will replace them.
cws – That’s the real issue, large market teams can and often do outspend the small market teams. But it has nothing to do with deferrals.
Big revenue teams are gonna spend big with our without deferrals, they always have.
Fever, because until now, it wasn’t a prevalent thing. It happened, of course, no one is saying the Dodgers started this, well maybe some folks, but they are exploiting it on the largest possible stage. Whenever something like that happens there’s a shift in perspective, and whenever there’s a shift the lenses magnifies. It absolutely is a lower hit to the yearly roster allowing LAD to continually add on at the highest end. Not every owner likes operating this way so of course it’s going to be a talking point in the next CBA. It’s too loud by too many people for it not to be.
@ghost @fever
Guys…ppl joke about the Mets and Bobby Bonilla day. His deferred deal was for preexisting money on a contract that they wanted to get out of and was for $5.9 million over 25 years with 8% interest. He was washed. and the team wanted to part ways. The Dodgers ate signing the best of the best and immediately deferring over $ 1 billion. These things are not the same and let’s not act like this isn’t an industry game changer. My Yanks would get blasted for their spending but at lest they were willing to immediately deal with the consequences when it babe to the luxury tax. I’m not going to complain about the Dodgers but this will become standard practice as other teams will partner with legate equity firms to match what the Dodgers/Guggenheim Baseball Management has done. However, they’ll be about 8 teams that have zero chance to duplicate that strategy just because the earning ability and ROU just wouldn’t be enough to attract those PE firms interest.
Sal – Without doing an analysis, I agree it’s probably more prevalent now because contracts are so much bigger now.
Think about it, just a few years ago in 2022 Scherzer had the biggest annual salary at $43.3M and now Soto has $51M. That’s a 20% increase in just 3 years!
I don’t think fans complaining about deferrals will make a difference. As I wrote earlier, deferrals benefit BOTH the players and the teams ….. so why would either side fight against it in the next CBA?
The only one who has a reason to be against it is the gov but they don’t have a say in CBA negotations. LOL
FPG – Bingo.. what the deferral army don’t realize is that Ohtani’s deal would have been 10 years 460 million without the deferrals not the $700 million number. They refuse to believe it so they obsess over it.
I started a hell thread. Achievement unlocked.
K maybe just a mini one. I’ll still take it.
Let’s all get our torches and pitchforks and go down to the mayors office to complain about how everything is ruined!
I’ll gladly pay you Tuesday for a hamburger today.
Wimpie
Big time deferrals. Let the crying begin.
That’s a heck of a deal for the Jays at $13.7MM annual NPV. Well done!
Santander will be a great fit for the BlueJays. I have no problem with the term or price tag here
The Toronto Deferrals at it again eh?
Actually they are a team that don’t generally do it and only recently had opt outs in contracts and no-trade clauses were rare.
whoosh
There was no whoosh, just facts. I forgot they don’t exist down there.
There was definitely a whoosh and another just happened lol
“So is this ruining baseball now? Oh, it’s not the Dodgers? I guess it isn’t.”
Definitely wins most complicating contract of the offseason.
People can hate on the Blue Jays all they want this is a good contract.
We’ve come a long way from Bobby Bonilla.
Bonilla should ask Cohen to further defer $100 to be paid out $1 annually. Gotta keep Bobby Bo Day alive. The Wilpons will disapprove.
Even further from Bruce Sutter!
The only way a player like him would hit 10 years service time. Smart move on both sides. Contract wise only, Santander is a stupid signing because he will be dump going forward.
Do you have any stats on that or just your expert opinion?
62 million in deferrals!!!! So 24% of their 262 million projected payroll to be deferred over what a 5 year period after contract ends? I don’t see when the deferrals kick in.
So essentially blue jays deferred 1 year of Ohtani over 5 years give or take.
Whats this article suppose to accomplish exactly? People are fine with deferrals within reason. But when you’re deferring say 50-100% of your payroll salary every year reducing your cbt tax hit in the process not exactly an even paying field. I’m sure plenty of teams can defer 25% of their salary over a 5 year period into the future. Not many can defer 50%-100% every season into the future.
You aren’t good at math, are you? You are taking the total deferral and comparing against a yearly payroll.
You aren’t good at reading.
The article doesn’t say what years the deferrals will kick in.
All we know now is how much is being deferred (62 million) compared to how much their projected payroll is at the time of the signing of the contact (262 mill) which does impact how much the jays are willing to defer. That represents 24% of their payroll this year when they signed the contract. Now will that be spread out over 3 years 5 years 9 years 10 years into the future? Idk article doesn’t say just says how much is deferred each year and we don’t know final payroll numbers for 2026 2027 2028 2029.
Payroll at the time of the contract makes it okay to use as a reference point for future payroll without accounting for other contacts and departures?
Payroll at time of contract reflects how much money jays were likely willing to kick into the future via deferrals, 62 mill. Which is why 2025 has the lowest deferred amount at 6.25 compared to other years at 10.
And? That doesn’t reflect a 24% of their salary like you said.
I never said it reflected 24% of their salary. Reading is hard for you I understand
“ 24% of their 262 million projected payroll to be deferred over what a 5 year period after contract ends?”
“ I’m sure plenty of teams can defer 25% of their salary over a 5 year period into the future.”
I did say jays deferred 62 million. Currently the payroll is 262 million. That represents 24% of their current payroll the blue jays felt comfortable enough deferring into the future say over the course of 5 years at the time of signing the contract with Santander.
You sure you know math. Cause twice I said 24% spread across say 5 years into the future. That means 24 divided by 5 in case you were confused
“…much is being deferred (62 million) compared to how much their projected payroll is at the time of the signing of the contact (262 mill)”. 5 years of deferred funds can’t be compared against a single years payroll.
You misquoted yourself. If you misstated then it was a misunderstanding.
You two, get a room
The single years payroll is a reference point to show how much money the jays felt comfortable deferring with their current projected payroll. 24%
Already being over the luxury tax line prior to the Santander signing it makes sense to offer deferrals to bring down the cbt tax implications as to not get closer to the next tax line
If their payroll was significantly less blue jays probably offer less or no deferrals. So payroll at time of signing the contract does play an important part in the amount of deferrals agreed to.
It’s disingenuous. Comparing multi-year deferrals as a comparison against a single year of payroll. Especially not considering the present value.
@badfinger. I’ve tried to negotiate it, but he keeps trying to defer the room cost over 5 years and saying it’s 20% of his monthly salary.
No it’s important to point out that jays felt comfortable deferring 24% of their payroll given their current payroll situation against the cbt tax thresholds
Had the jays had a lower cbt number or weren’t in the tax penalty at all they offer probably significantly less or no deferrals at all.
So it’s definitely important to note how much each team is willing to differ based on their current payroll.
All we know now is how much is being deferred (62 million)
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Saying that 5 years of deferrals should count against this year’s payroll is a bit like saying, no, exactly like saying that $680M of Ohtani’s deferrals should count against LA’s current year payroll of $374, giving them a negative $306M payroll this year.
Well done Dodgers.
Why can’t other teams defer larger amounts of their payroll?
Theyd rather not have to explain to their fans who the heck Anthony Santander was in fifteen years.
Last place team
Can’t wait for the first guy to be paid minimum wage with 95% of his salary deferred.
So…ohtani?
$2 million a year is minimum wage in Cali now? I mean I heard they increased it, but dang.
There is a minimum wage in MLB ($760,000), so pretty close.
That’s 2 million before taxes, he’s probably closer to league minimum once you subtract taxes.
Already happened. He’s called Roki Sasaki.
No one should care about deferrals!!!!! It is all about the time value of money and lessening taxes for the player. Stop harping about it. Nothing special about Bonilla, yet we hear about that endlessly year after year. Simple business strategy that benefits all involved.
@BaseballGuy1 – can you defer some of those exclamation points? 😀
I agree. (With a TBD on the taxes, because I have no idea how deferred comp is treated under Canadian tax law.)
And, in this case, my best guess is that it was a compromise solution to a large difference in the bid/ask.
Blue Jays got the deferrals to reduce the contract NPV to a number with which they were comfortable.
Santander and his agent (who, to be clear, *do* understand the NPV) got to save face with a nice-looking headline number.
BG1 do deferrals “count” towards the thresholds in the year they are paid out? If so, eventually there is a day of reckoning – even at a lower number assuming inflation continues to be positive- and if not, it just appears to be a method for richer owners to avoid an intended salary cap that other sports impose in attempts to somewhat level the playing fields. Otherwise it will just be Bezos against Musk one day.
You think the people commenting in here know what the time value of money is? Hahahaha. Hilarious. Happy Friday my man. Beers on me!
Bet he doesn’t opt out
For Him, it’s a good contract. I hope he hits a lot of homers for them.
dodgers should’ve got in on that
Dodgers finished second this time…lol
Diversify your bonds…just not Barry
But, but that’s not how you spell dodgers. Every team does this to some extent. Let it go.
The only people crying about deferrals are small market fans even though they never had a chance at signing top free agents to begin with.
Yanks should join the freigh and offer Bregman a heavily deferred contract. Something like 5/$160 with an annual of $5 mil per and $135 mil deferred over 10 years.
The Blue Jays are ruining baseball with these deferrals.
Deferals will become a major problem and this will be a ugly battle for MLB. The players union is really strong and will argue it goes against players ability to earn yet to owners the contracts of course keep growing and growing. I remember back in the day sports illustrated had everyone’s salary posted and I think eddie murray had baseballs highest salary at 2.25 million. I know it’s a business but at some point it needs to stop and I think there will be a work stoppage and strike with referrals being a major topic. You may even see some contracts become null and void. Like anything over 10 years
The players union is really strong and will argue it goes against players ability to earn
======================
How so? Deferrals are just a financing mechanism that basically says, I will owe you $x for this season, but will pay you those $x next year plus 4.5% interest.
If anything, it might expand a players’ market since he can appeal to teams that expect more revenue in future years than they currently have.
I understand that and I’m speaking in sort of past tense. Owners and players will clash with referrals being a major topic tho. I do feel a work stoppage is brewing
@Dmac
The player has to agree to the deferral. It’s a really long and lengthy explanation, but the Dodgers have effectively created an in-house investment division within a baseball team. That money has to be funded into an escrow, but it doesn’t have to just sit there and gain annual interest, which will likely be outpaced by inflation. It can be used as capital for investments, and who better to investing your money than the Guggenheim Partners? They owe $1 bil in deferred money and in just a modest 5% return that can be flipped into $1.6 bil in 10 years, and that’s being conservative. It’s amazing what’s going to happen when other teams incorporate thar strategy. Unfortunately, teams like the Pirates and Reds are going to suffer because the ROI wouldn’t be high enough for most of these private equity firms to consider.
I get that the money is deferred but when are the deferrals paid?
@fun
it must be a minimum of 10 years after the deal was signed. it could be more than 10 years, but 10 is the minimum.
It’s not the deferrals but the amount of deferrals that people complain about. It’s a luxury tax dodge and everyone knows it, even Robby the robot as he looks the other way. No “best interests of baseball” with this bought and paid for commissioner. Dodgers fans can try to dismiss the fact their team is the biggest offender all they want, but it doesn’t change the facts.
And you’re one of the biggest offenders of being a big crybaby over the deferrals since Ohtani
Reds, who cares if it’s a luxury tax dodge? We have a president who was elected by people who knew he loved taking advantage of tax loopholes. None of the owners are going to want to get rid of deferrals if there’s even a slight chance they’ll want to use them someday. Only whiny fans care.
@this
This was negotiated by the MLBPA and owners. He has no power over it.
For a quick second, I forgot the Dodgers and the apparent “evil” of deferments…….
Exactly how much money does one need? MLB is a finite job for a player. Sure you can coach stay involved until death, but the salary is a small fraction.
Looking around at what players do and sometimes fail at post career, the evil D’s would be something I’d strongly consider, even want.. At best you hit that 10yr threshold to become fully vested. But again, how much do you need per season to live like a proverbial king?
For me, NO DOUBT I’d have blown through a decent chunk of that money just being stupid. The rainy day deferments would be a guard against me having to manage a batting cage in my 50’s…
Just one man’s opinion.
Now back to the regularly scheduled agita…..
The deferral money will be like royalties musicians receive. Not forever, but very close comp I think.
Good. We need more all-star teams playing in the league. Kind of tired of seeing Joe-AAA fielding the whole team and going 1-4 with a single and 3ks. It’s a big reason I’d like to see a drop in teams in the league to around 16.
Hopefully for him it’s a Bobby Bo type deferral with some annual interest on those deferrals instead of these knuckleheads today doing it to help the owners save a few nickels.
I think we all agree that the deferral loophole will now be closed since a non-blue blood team did it.
Deferrals ? Jay’s are single handedly ruining baseball. What kinda exotic voodoo is this ? Next thing u know it’ll be legal n all the teams would be able to defer compensation … write your congressperson now before it becomes the norm. Oh the blasphemy.
It’s ok for governments and businesses to have an agreement to defer money accumulating interest for your retirement but teams are evil if they do that for their players.