Read on Twitter
Without knowing the deferral payment terms.....we cant know 100% what the impact of the option would be....but here is how this deal works for the #WhiteSox assuming a 10 year deferral at 3.25% discount rate. https://twitter.com/JeffPassan/status/1348838400921640960
Option A
White Sox layer the $15M option into their 2021-2023 payroll figures and end up NOT exercising Hendricks option in 2024.
By doing this they can credit their 2023 payroll figures by the value of the tax savings generated by the option payment deferral.
White Sox layer the $15M option into their 2021-2023 payroll figures and end up NOT exercising Hendricks option in 2024.
By doing this they can credit their 2023 payroll figures by the value of the tax savings generated by the option payment deferral.
Option B
White Sox layer the $15M option into their 2021-2023 payroll figures and exercise Hendricks option in 2024.
By doing this they can credit their 2024 payroll figures by the $15M they already baked into their 2021-2023 numbers and essentially have Hendricks for "free"
White Sox layer the $15M option into their 2021-2023 payroll figures and exercise Hendricks option in 2024.
By doing this they can credit their 2024 payroll figures by the $15M they already baked into their 2021-2023 numbers and essentially have Hendricks for "free"
Option C
White Sox DONT layer the option in and don't exercise his 2024 option.
If they did this.....White Sox would have to take a luxury tax hit for the Net Present Value of the deferral amount
White Sox DONT layer the option in and don't exercise his 2024 option.
If they did this.....White Sox would have to take a luxury tax hit for the Net Present Value of the deferral amount
and lastly Option D
White Sox DONT layer the option in and Exercise the option for 2024.
This is the simplest option as its just a straight line AAV the entire way.
White Sox DONT layer the option in and Exercise the option for 2024.
This is the simplest option as its just a straight line AAV the entire way.
IMO its very likely that the White Sox are layering in the option into their 2021-2023 numbers as a way to take advantage of the numerous very team friendly contracts they have right now for numerous players.
Eloy Jimenez, Yoan Moncada, Tim Anderson, Lucas Giolito (via Arb1), and Luis Robert are all under contract for only $36.9M+ right now for luxury tax purposes. So why not take advantage of this?
