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View Full Version : Pujols: $35,000,000 a season?



RedsBaron
11-30-2010, 07:52 AM
In the 11/29/10 issue of The Wall Street Journal, page A19, former MLB Commissioner Fay Vincent speculated that Albert Pujols will probably negotiate a salary of around $35 million annually in a four or five year agreement. In addition to being interesting in and of itself, I also found his speculation to be noteworthy for the ongoing debate about how much it will take to sign Joey Votto to a long term deal. No, Votto hasn't put together ten straight Pujols type seasons, but he just put one together and at his age he is probable to put together several more, so anyone thinking Votto can be had for $10 million a year is probably optimistic.
Anyway, the amount of Pujols's annual salary was not the thrust of Vincent's article ( I do not believe it is available online). Vincent argued that Pujols should to convert a portion of his compensation from ordinary income to capital gains income, which is taxed at a lower rate. He could do that by getting an ownership interest in the Cardinals as part of his compensation. Highly paid business executives and movie stars get part of their compensation by getting a piece of the action with shares in the corporation they work for or with an ownership interest in their films. Vincent mentions the riches William Holden gained from having a share in "The Bridge on the River Kwai."
Vincent wrote that while someone such as Pujols could be required to sell any ownership interest if he later left the team, but even then the gain could be substantial. He speculated on how rich Mickey Mantle would have been at the end of his life had he been able to acquire even a tiny share in the Yankees in 1961.

Chip R
11-30-2010, 10:36 AM
I'm fairly sure players can't own shares in their club.

Red Leader
11-30-2010, 10:38 AM
I'm thinking this article was written just to drive the price tag up on Derek Jeter. ;)

Chip R
11-30-2010, 10:44 AM
Boy, if the Cards did pay Pujols anywhere near $30M, it would be tough for them to afford him and other expensive players. No knock on Pujols, who is a tremendous player, but am I the only person who thinks his body is going to break down within the next 5 years? He's had several injuries over the past few seasons and injuries usually increase when you get older, not decline.

GoReds
11-30-2010, 11:59 AM
Boy, if the Cards did pay Pujols anywhere near $30M, it would be tough for them to afford him and other expensive players. No knock on Pujols, who is a tremendous player, but am I the only person who thinks his body is going to break down within the next 5 years? He's had several injuries over the past few seasons and injuries usually increase when you get older, not decline.

And what effect is a contract like that going to have on the Reds?

30+M is to St. Louis' payroll as X is to Cincinnati's?

I'm guessing X is significantly less than 30+M. I'm sure Votto's agent figures they are about to win the lottery.

Chip R
11-30-2010, 12:47 PM
And what effect is a contract like that going to have on the Reds?

30+M is to St. Louis' payroll as X is to Cincinnati's?

I'm guessing X is significantly less than 30+M. I'm sure Votto's agent figures they are about to win the lottery.


It's a good question. StL is not the only team with big decisions to make. I think Pujols is going to stay in StL for somewhere between $25-$30M for 5-6 years. While that's not $35M, that's still a big chunk of change for any team that's not the Yankees.

Reds4Life
11-30-2010, 12:55 PM
Nobody except the Yankees will be able to afford to pay that kind of money to one player. And now with the sons in charge, I'm not so sure the Yanks are going to be willing to spend that kind of money either.

Hank & Hal don't seem to have the 'win at any cost' mentality their father had. If the Yankees start pulling back on salary, there could be a moderate to large correction in the market for player salaries.

RedsBaron
11-30-2010, 02:01 PM
I'm fairly sure players can't own shares in their club.

Vincent acknowledged that in his article but suggested that this may be a new way for players and their agents to seek to increase their income. Whether it could ever be approved as part of a new collective bargaining agreement would appear to be unlikely to me, as only a very few players are of the stature of a Pujols who could benefit by the possibility.
I just thought the article was interesting.

Blimpie
11-30-2010, 03:06 PM
Pujols might get a "Lifetime Achievement" deal with the Cards, but, personally, I would be more troubled by the Troy Tulowitzki deal.

It has been reported to be a seven year deal in which he would average about $19 million per season.

BrooklynRedz
11-30-2010, 03:11 PM
Vincent acknowledged that in his article but suggested that this may be a new way for players and their agents to seek to increase their income. Whether it could ever be approved as part of a new collective bargaining agreement would appear to be unlikely to me, as only a very few players are of the stature of a Pujols who could benefit by the possibility.
I just thought the article was interesting.

Thanks for passing along RB. Unfortunately there is absolutely zero chance of the owners ever approving this. And even if they did, I can't imagine how it would work. Would the existing owners take a reduced ownership position?

RedsBaron
11-30-2010, 03:19 PM
Pujols might get a "Lifetime Achievement" deal with the Cards, but, personally, I would be more troubled by the Troy Tulowitzki deal.

It has been reported to be a seven year deal in which he would average about $19 million per season.

Wow! Some posters here still think the Reds can sign Votto to a five year deal for a total of between $40 and $50 million, or about $8 to $10 million a season. Won't happen.

WVRed
11-30-2010, 10:55 PM
Nobody except the Yankees will be able to afford to pay that kind of money to one player. And now with the sons in charge, I'm not so sure the Yanks are going to be willing to spend that kind of money either.

Hank & Hal don't seem to have the 'win at any cost' mentality their father had. If the Yankees start pulling back on salary, there could be a moderate to large correction in the market for player salaries.

http://www.orbitcast.com/archives/Derek_Jeter1.jpg

Hoosier Red
12-01-2010, 11:53 AM
Wow! Some posters here still think the Reds can sign Votto to a five year deal for a total of between $40 and $50 million, or about $8 to $10 million a season. Won't happen.

I think any long term deal with Votto will be more for cost certainty than for true savings. $20 mill/season may or may not be worth it, but it's easier to build around if you know 5 years ahead of time what the price tag is.

Yachtzee
12-02-2010, 01:13 AM
Ownership interests in teams for players while they're still playing would be problematic for more reasons than just dealing with what happens when a player gets dealt. Could you imagine how hard it would be for a manager to deal with a star player who has an ownership interest in the club your trying to run.

GoReds
12-02-2010, 09:11 AM
Ownership as part of a player contract could be done, but only in very rare cases and with a bunch of stipulations. Players such as Albert Pujols, who define a ballclub and are likely to serve their entire career with one team would qualify.

Let's say that the Cards figure Albert is worth 30Mper year. How much would an ownership stake be worth? For this example, let's say 100M. So, the Cards sign him to a 10-year deal worth $300M. $200M is straight salary, the rest is part of an ownership option, valued at $100M. That means that St. Louis would realistically pay Pujols "only" $20M per year with the remainder going towards the ownership option.

The ownership option would have the following stipulations:

1- If traded, the ownership option is converted to contract money. Therefore, any team getting Pujols in trade would have to pay him $30M per year. Whatever time St. Louis had Albert would result in a conversion to bonus money. So, if they trade Albert after 5 years, they would have to pay him a bonus of $50M at the time of the trade. Realistically, it makes Albert absolutely untradeable.

2- At the end of the contract life, Albert is offered the option of "purchasing" the ownership option OR receiving the $100M as a bonus. This means that the ownership stake that Albert would have in the team really wouldn't start until the contract is over. He would have absolutely no say in any manner until his ownership stake is realized, after the contract is through.

This isn't the type of contract I would like to see anyone offered, except for the rarest of players such as Pujols. I really can't think of any other player on any current roster that should be considered for such a deal.

Unassisted
12-02-2010, 10:23 AM
I imagine Fay Vincent still resents the circumstances that removed him from the commissioner's job, so his motivation for making a statement like this might be less than pure. He probably gets some fiendish pleasure out of tweaking the owners (who sacked him) by suggesting they need to raise the bar for salaries - the polar opposite of the current commissioner's rhetoric.

Chip R
12-02-2010, 10:32 AM
Ownership as part of a player contract could be done, but only in very rare cases and with a bunch of stipulations. Players such as Albert Pujols, who define a ballclub and are likely to serve their entire career with one team would qualify.

Let's say that the Cards figure Albert is worth 30Mper year. How much would an ownership stake be worth? For this example, let's say 100M. So, the Cards sign him to a 10-year deal worth $300M. $200M is straight salary, the rest is part of an ownership option, valued at $100M. That means that St. Louis would realistically pay Pujols "only" $20M per year with the remainder going towards the ownership option.

The ownership option would have the following stipulations:

1- If traded, the ownership option is converted to contract money. Therefore, any team getting Pujols in trade would have to pay him $30M per year. Whatever time St. Louis had Albert would result in a conversion to bonus money. So, if they trade Albert after 5 years, they would have to pay him a bonus of $50M at the time of the trade. Realistically, it makes Albert absolutely untradeable.

2- At the end of the contract life, Albert is offered the option of "purchasing" the ownership option OR receiving the $100M as a bonus. This means that the ownership stake that Albert would have in the team really wouldn't start until the contract is over. He would have absolutely no say in any manner until his ownership stake is realized, after the contract is through.

This isn't the type of contract I would like to see anyone offered, except for the rarest of players such as Pujols. I really can't think of any other player on any current roster that should be considered for such a deal.


It's actually part of the uniform player contract that a player cannot own stock in any team.




Interest in Club

4.(c) The Player represents that he does not, directly or indirectly, own
stock or have any financial interest in the ownership or earnings of any
Major League Club, except as hereinafter expressly set forth, and
covenants that he will not hereafter, while connected with any Major
League Club, acquire or hold any such stock or interest except in
accordance with Major League Rule 20(e).

Rule 20(e) states "No player or manager of a club may have an ownership interest in that club except under an agreement approved by the Commissioner, which shall provide for the immediate sale of such interest upon that playerís or managerís transfer from that team."

So even if this were to happen, if Pujols were to be traded, he would have to sell his interest in the team.

GoReds
12-02-2010, 11:17 AM
It's actually part of the uniform player contract that a player cannot own stock in any team.

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Rule 20(e) states "No player or manager of a club may have an ownership interest in that club except under an agreement approved by the Commissioner, which shall provide for the immediate sale of such interest upon that playerís or managerís transfer from that team."

So even if this were to happen, if Pujols were to be traded, he would have to sell his interest in the team.
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Not stock, per se, but an option to buy stock in the team at the end of the contract, whenever that occurs. That's all semantics and stuff for the lawyers to work out, but I could see it happening.

Chip R
12-02-2010, 11:40 AM
Not stock, per se, but an option to buy stock in the team at the end of the contract, whenever that occurs. That's all semantics and stuff for the lawyers to work out, but I could see it happening.

That's possible but you never know what's going to happen down the road. Ownership may change and might not be real fond of something like this happening. Or it could be some kind of situation similar to what happened with Ozzie Smith where he was kind of pushed out at the end of his career which left a bitter taste in his mouth in regards to his team.

It's a bad idea overall to have a player have partial owbership of the team. Especially on player-management issues. Let's say, for example, Pujols has partial ownership in StL and is still an active player. As an owner, it would be in his best interests to be in favor of a salary cap. But as a player, it would not since he's trying to make as much money as he can. And that's just one issue. There could be many more potential problems with players owning part of their team.

Marc D
12-02-2010, 12:17 PM
The only way it could even possibly work is as, GoReds mentioned, an option. The problem there is assuming owners were willing the MLBPA isn't going to let them start counting an option as compensation.

Sooner rather than later some player would forgo millions of dollars worth of current income for a future option deal he then couldn't exercise for whatever reason.

I'm with Unassisted, Vincent was just tweaking the owners with this article he knows none of this could ever happen.

On the other note, if that 35MM figure were close to the mark then the Cards would be crippled. I remember a thread where we were discussing their future payroll issues this summer and that was estimating something like 20-25MM a year for Pujols.

The Cards payroll is 90MMish, so you'd be talking essentially 1/3 tied up in one aging superstar. Pujols on the wrong side of 30 and 8 Skip Schumakers aren't going to win anything.

Yachtzee
12-02-2010, 06:16 PM
That's possible but you never know what's going to happen down the road. Ownership may change and might not be real fond of something like this happening. Or it could be some kind of situation similar to what happened with Ozzie Smith where he was kind of pushed out at the end of his career which left a bitter taste in his mouth in regards to his team.

It's a bad idea overall to have a player have partial owbership of the team. Especially on player-management issues. Let's say, for example, Pujols has partial ownership in StL and is still an active player. As an owner, it would be in his best interests to be in favor of a salary cap. But as a player, it would not since he's trying to make as much money as he can. And that's just one issue. There could be many more potential problems with players owning part of their team.

To go one step further, I could see a star player with an ownership interest working against the union in favor of a salary cap. While his salary may be capped, the value of his ownership interest is not. Therefore, he could very well be happy with a cap if it increases the value of his ownership share. Then when he cashes out later, either by being traded or doing so of his own accord after retirement, he would have the increased value of his ownership interest taxed at a capital gains rate instead of at the regular income rate.