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Tax increases could factor in MLB negotiations

Tax increases could factor in MLB negotiations

Team executives and agents wandered into the Agave Sunset lounge at the resort where the general managers' meetings were held in Indian Wells, Calif. Four of the six flat-screen televisions were showing election coverage, with the other two turned to sports.

President Barack Obama's victory over Mitt Romney was of as much interest to baseball's money men as the game scores, given the millions of dollars routinely guaranteed in player contracts these days.

As free agents negotiate deals this offseason, tax policy is an area that comes up along with the usual issues. Some players are wrangling for as much money as they can get before the end of the year to avoid a take hike in 2013.

``Front-loading would make sense if at all possible as tax rates will definitely go up on January 1st on all high-income taxpayers,'' agent Greg Genske said in an email. ``The only question is HOW MUCH will the rates increase????''

This much is known for now: Starting Jan. 1, there is an additional 0.9 percent Medicare tax on wages above $200,000 for individuals and $250,000 for married couples filing jointly under the federal Affordable Care Act, a rise to 2.35 percent.

In addition, the Bush tax cuts are scheduled to expire at the end of the year, which could raise the highest marginal federal tax rate from 35 percent to 39.6 percent - although a deal between Obama and Congress could change that.

Oakland Athletics general manager Billy Beane figures agents will be on top of the changes - but the results of negotiations about the so-called fiscal cliff are unpredictable.

``I think if you're hopping around the potential of tax reform, you're probably chasing your tail,'' Beane said. ``If they can predict when something's going to happen, then they're much further ahead than the lawmakers.''

With baseball contracts worth as much as $275 million (Alex Rodriguez) and the major league minimum $480,000, tax policy affects every player who spends most of the season in the big leagues.

All-Star shortstop Jose Reyes, who has a $10 million salary next year, was traded from the Miami Marlins to the Toronto Blue Jays. While Florida has no state income tax, Reyes remains a New York resident from his days with the Mets and had high taxes to begin with. Ontario's provincial tax rises to 11.16 percent - on top of a Canadian federal level as high as 29 percent.

Among states with big league teams, income tax rates go as high as 10.3 percent in California and 8.82 percent in New York. At the other end, Florida, Texas and Washington have no state income tax. The top rate in the District of Columbia is 8.95 percent.

``I like ours; we're a no-tax state,'' Seattle Mariners general manager Jack Zdurienck said. ``When we sit down with players, that's a huge benefit. I think any player out there that has an opportunity to play in a no-tax state gets benefits, enormous benefits. We hope that weighs in our favor.''

According to an analysis done by a tax lawyer on the staff of agent Scott Boras, a player with a $10 million salary and average deductions who plays in Florida and is a resident of that state will see his taxes rise from $3.45 million this year to $4.09 million next year under current law. If traded to the Blue Jays, that player's 2013 tax would rise to $4.27 million. And if dealt to a California team, the tax would go up to $4.4 million.

By moving money from salary into signing bonuses, players can sometimes lower their state tax bills. Shifting money into December this year could reduce federal taxes.

``Tax measures are going to be discussed, but change most likely carries compromise on both sides,'' Boras said. ``One thing is clear based on the nation's ballot totals: Many Americans are split on this subject.''

In the end, most free agents choose teams based on where they want to play, not on lowering the tax cut on their income.

``It's a factor, maybe even a small factor,'' agent Craig Landis said. ``If there's 50 variables, you can now make it a 51st. It's not usually going to be the drive, but it's something to consider.''

And for teams, only the big spenders need worry.

Beane's Athletics, for instance, had the lowest payroll in the majors last season.

``It's probably not a situation I'll have to face in Oakland too much,'' he said.

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How Nicklas Backstrom saved the Capitals 3 different times in Game 5

How Nicklas Backstrom saved the Capitals 3 different times in Game 5

The Capitals found themselves in deep trouble on Saturday.

Game 5 at Capital One Arena provided Washington a golden opportunity to take a 3-2 lead in their 2018 Stanley Cup Playoff first-round series against the Columbus Blue Jackets. A loss -- another home loss -- would have been a devastating blow.

After battling back from a 2-0 series deficit, to lose in Washington would mean facing elimination in Columbus. Game 5 was the game the Caps needed and it would have slipped away from them if not for Nicklas Backstrom.

The Caps’ most underrated superstar -- the one who is constantly overshadowed by the likes of Alex Ovechkin and Braden Holtby -- took center stage on Saturday as he tipped a Dmitry Orlov shot past Sergei Bobrovsky at 11:53 of overtime to seal the victory for Washington.

“It was just a good shot from [Orlov],” Backstrom said after the game. “I thought before he had a chance to block it, and I got a tip on it, and it’s usually what happens in the playoffs. Tip goals or rebound goals. That’s the way it is. It was nice.”

Backstrom’s overtime goal capped off a three-point night for the veteran center, who also scored in the first period and assisted on a goal from T.J. Oshie.

The team ended up needing every one of his points.

From the start, Columbus outplayed Washington. With the series tied 2-2, a best-of-three mentality took over and the Blue Jackets pushed hard for the pivotal Game 5 win.

It is in those very moments that team needs its superstar players to step up. In Game 3, it was Holtby who stole the show to help Washington steal a win in Columbus.

On Saturday, it was Backstrom.

Columbus converted a shorthanded goal to seize a 1-0 lead in what was shaping up to be a dominant first period. A fluke goal from Backstrom, however, made sure the score was knotted up, 1-1, after the opening frame.

With the puck behind the goal line, Backstrom tried to slip a pass through the crease. Bobrovsky got a piece of the puck with his stick, but the amount of spin on the pass forced the puck to carom off the stick, off the back of Bobrovsky himself, and into the net.

“I was trying to make a pass,” Backstrom said. “Honestly, got lucky. I don’t know who came back-door there but I was trying for him. I’ll take it.”

After a back and forth game, the Blue Jackets came out swinging to start the third. Down 3-2, Columbus tied the game just 2:30 in and made a real push to win the game in regulation. Washington was outshot 16-1 in the third and looked like they had no push at all.

But the Caps looked like a different team when they took the ice for the extra frame. What happened in between periods?

“As I was leaving the room after the period, I could hear guys, the right guys, all saying the right things,” head coach Barry Trotz said.

When later asked if one of those guys was Backstrom, Trotz said, “Absolutely. He's one of the leaders on our team. They were all talking about let's make sure we're doing the right things. There's a lot of pride, lot of good leadership in that room.”

Whatever Backstrom and the other leaders said did the trick. Washington made a strong push in overtime leading to Backstrom’s game-winning goal.

This isn’t the first time Backstrom has delivered. Saturday’s overtime tally is the fourth of his career. That’s the most in franchise history and tied for fifth in NHL history.

Through his efforts on the ice, the Caps were able to erase a bad first period and steal the win in overtime. But it also took a big effort off the ice to get the job done.

“If you just look at the scoresheet, that doesn't say enough of about Nick Backstrom, his contribution from in the dressing room to on the ice to key moments to key faceoffs,” Trotz said.

“I've been on his soapbox about how complete a player he is and I never really worry about Nick Backstrom. He's got enough games under his belt, he's got enough stats to back it up and he's played huge minutes and he's one of our leaders. He's a tremendous hockey player.”

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John Tortorella guarantees series will return to Washington for Game 7

John Tortorella guarantees series will return to Washington for Game 7

After losing Game 1 and Game 2 at home, Alex Ovechkin declared "It’s going to be fun when we bounce back and going to tie the series and come back here and play Game 5 at home.”

Columbus Blue Jackets head coach John Tortorella seems to be taking a similar tactic.

The Capitals won Game 5 in overtime on Saturday in a game that could prove to be emotionally draining for the Blue Jackets in a number of ways.

  • It was Washington's third straight win
  • Columbus was the better team for the majority of the game, but still took the loss
  • The Blue Jackets now face elimination despite holding a 2-0 series lead to start and losing only once in regulation

Tortorella has become famous for his fiery postgame press conferences in the past, including abruptly walking out after Game 4's presser when he declared "We sucked" to the media.

Saturday's was another fun one.

In a presser that lasted less than two minutes, Tortorella twice said, "We'll be back here for Game 7."

After such a draining game, Tortorella was asked how he would get them ready for what is sure to be an emotionally charged Game 6.

"I won't have to say a damn word to them," Tortorella said. "No. We'll be back here for Game 7."

The Blue Jackets will have to win Game 6 in Columbus to make that happen.

Barry Trotz was asked for his reaction after Tortorella's comments.

"What else are you going to say? That's good. He wants to get it out there, he believes in his team just as I believe in my team. It's our job for that not to happen."

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