|
In response to
"Dodgers' deferred payments top $1 billion to 7 players (from 2028 to 2046) - do they have to put this in escrow/trust? -- (link)"
by
Beaker 🍺
|
Partial: "must be fully funded by the Club, in an amount equal to the present value of the total deferred compensation obligation"
Posted by
JD (aka Jason Dean)
Dec 4 '24, 10:31
|
Deferred compensation obligations incurred in a Contract executed on or after September 30, 2002 must be fully funded by the Club, in an amount equal to the present value of the total deferred compensation obligation, on or before the second July 1 following the championship season in which the deferred compensation is earned.
So a club has to have an escrow account for the differed amount owned but with a two year grace period. That actually kind of sucks as an explanation of the above ;-)
"on or before the second July 1 following the championship season in which the deferred compensation is earned. " That's two year part. IMO, That's some really high end lawyer shit with the second July 1 wording.
"amount equal to the present value of the total deferred compensation obligation" So not the whole amount but the current amount that would've been earned. So for the Dodgers, by July 1 2026, they have to have an account for $68 million (the deferred part of the $70 he would've earned this year)
But in what I'm guessing was a concession to the club lawyers, it's actually $68 million less 5%
"For purposes of this Article XVI, full funding of the present value of deferred compensation obligations shall mean that the Club must have funded, for the duration of and without interruption in each year, the current present value of the then outstanding deferred payments, discounted by 5% annually."
I guess cost of money and all that. Similar to taking the one time payout for a lottery vs payments
|