Burrow's Contract With Taxes And Other Fees......

[BFritz21]

Mods, sorry if this should be in the thread about his extension, but I thought it deserved its own thread because it's not talking about negotiations and whatever. Sorry if it takes any effort to move it (if you need to).

We talk about Burrow's contract and everybody mentions how it's going to be so much money and other people have talked about who will be the NFL's first billionaire, but I was thinking about the taxes, dues, agent's cut, insurance, and whatever else he needs to pay out of his contract.

You realize that, after state and income taxes, a player only takes home about 50% of his pay? Even if that's a low estimate (not by much, maybe off by 5% or so), and that's not even considering paying his agent, NFLPA fees, and whatever else?

Again, I'm not saying that we should feel bad for him, but I'm just saying he's probably only getting 50% of what he signs for, if that.

I know he also has endorsements and whatever, but let's just remember how big of a business the NFL is and think of it in relative terms.

[Brownshoe]

You don't say? I always thought athletes got a religious tax exception because they cause a religious following, especially the good ones. I guess I should donate to Burrows charity foundation so he can have a bigger tax write off

[WeezyBengal]

As someone who sees about 40% of his paycheck go to taxes twice a month...yes, I did know this lol

[CJD]

Yep. If someone is making $100,000 per year, they're really only making about $75,000 per year and that's before you think about the pre- and post-tax deductions like healthcare, dental, vision, 401k, HSA, life insurance, AD&D/Critical illness insurance etc.

Out of curiosity, I checked my earning statements and taxes (federal, state, local, FICA, medicare) take up about 16 to 19%, depending on how much I choose to withhold (I recently adjusted my W4 because my second child was born, which lowers my tax burden due to credits) and my deductions like insurance, HSA, 401k etc are about 18 to 20%, depending on how much I send to 401k and HSA accounts.

So I'm only making about 61 to 66% of my annual salary in dollars hitting my bank account and, as you said, Joe has additional fees like his agent fees (which I think are set at 3% of the total contract in the NFL.)

He will also be in the maximum tax bracket for a single filer, which is 37% for everything he makes above $578,125 per year, which will be the majority.

So yea, I think 50% is a pretty reasonable estimate as to what he will make on any contract he signs.

[*Awful Llama*]

I wouldn't be surprised if Ticketmaster were to somehow figure out a way to get a cut of Joe's money, too.

[Luvnit2]

(08-22-2023, 10:16 AM)Crazyjdawg Wrote: Yep. If someone is making $100,000 per year, they're really only making about $75,000 per year and that's before you think about the pre- and post-tax deductions like healthcare, dental, vision, 401k, HSA, life insurance, AD&D/Critical illness insurance etc.

Out of curiosity, I checked my earning statements and taxes (federal, state, local, FICA, medicare) take up about 16 to 19%, depending on how much I choose to withhold (I recently adjusted my W4 because my second child was born, which lowers my tax burden due to credits) and my deductions like insurance, HSA, 401k etc are about 18 to 20%, depending on how much I send to 401k and HSA accounts.

So I'm only making about 61 to 66% of my annual salary in dollars hitting my bank account and, as you said, Joe has additional fees like his agent fees (which I think are set at 3% of the total contract in the NFL.)

He will also be in the maximum tax bracket for a single filer, which is 37% for everything he makes above $578,125 per year, which will be the majority.

So yea, I think 50% is a pretty reasonable estimate as to what he will make on any contract he signs.

It depends on how they set up the contract. He can defer income of the contract to avoid taxes. Also, just an FYI, the 37% is the maximum tax on income, but 23% is capital gain taxes he can use if he defers income a few years minimum.

He will pay taxes to city of Cincinnati for games weeks in city, he will pay city taxes (if applicable) to city for road games. In some cases, no city taxes, in others taxes are higher.

As for expenses, they come off of his income and reduce his tax liability. Many NFL players defer income to not only reduce current tax liability, but also to build a retirement off ramp. 

Any deferred income, the Bengals would have to place into an account (they can earn interest, not the player) to pay it as the contract dictates.

A player like Joey B. can also get a break from an agent on their fees. It is like negotiating with a real estate agent, the higher the selling ask price, the lower the rate. It is very common to pay 5% to sell a house versus the standard 7% ask by real estate agents.

[XenoMorph]

(08-22-2023, 01:07 AM)BFritz21 Wrote: Mods, sorry if this should be in the thread about his extension, but I thought it deserved its own thread because it's not talking about negotiations and whatever. Sorry if it takes any effort to move it (if you need to).

We talk about Burrow's contract and everybody mentions how it's going to be so much money and other people have talked about who will be the NFL's first billionaire, but I was thinking about the taxes, dues, agent's cut, insurance, and whatever else he needs to pay out of his contract.

You realize that, after state and income taxes, a player only takes home about 50% of his pay? Even if that's a low estimate (not by much, maybe off by 5% or so), and that's not even considering paying his agent, NFLPA fees, and whatever else?

Again, I'm not saying that we should feel bad for him, but I'm just saying he's probably only getting 50% of what he signs for, if that.

I know he also has endorsements and whatever, but let's just remember how big of a business the NFL is and think of it in relative terms.

not really our problem to worry about at all

[*ochocincos*]

This might be helpful to point out for those completely unaware of taxes and paying agents and all that works, but I think for most it's pretty known.

To the point I'm sure you're trying to also make, it's that many of these players don't go on to make a bunch of money after their playing career, so they need (or at least want) to have enough money to live the life they want for 40+ years after being out of the league.

[casear2727]

I may be wrong, but I'm pretty sure that this is the case with every single professional athlete in the US since taxes and agents became a thing......

[Luvnit2]

(08-22-2023, 12:41 PM)casear2727 Wrote: I may be wrong, but I'm pretty sure that this is the case with every single professional athlete in the US since taxes and agents became a thing......

Lamar Jackson saved a ton of money, did not hire an agent.

[casear2727]

(08-22-2023, 12:45 PM)Luvnit2 Wrote: Lamar Jackson saved a ton of money, did not hire an agent.

Does Burrow have an agent?

[HarleyDog]

(08-22-2023, 10:21 AM)Awful Llama Wrote: I wouldn't be surprised if Ticketmaster were to somehow figure out a way to get a cut of Joe's money, too.

Yes. It's called the Taylor Swift Recovery Fee.

[HarleyDog]

(08-22-2023, 12:45 PM)Luvnit2 Wrote: Lamar Jackson saved a ton of money, did not hire an agent.

I think this is smart. Why pay an agent 10% or more if you know what you want and what satisfies you? Heck, all you have to do is read the paper to know what the latest big contract was and then rate yourself accordingly. After all, Lamar is his own brand. All agents do is muddy the waters and in many cases cause disputatiousness between players and their teams. 

[KillerGoose]

(08-22-2023, 01:02 PM)HarleyDog Wrote: I think this is smart. Why pay an agent 10% or more if you know what you want and what satisfies you? Heck, all you have to do is read the paper to know what the latest big contract was and then rate yourself accordingly. After all, Lamar is his own brand. All agents do is muddy the waters and in many cases cause disputatiousness between players and their teams. 

This can't be the answer, or more players would simply opt to not have them. Agents will typically do more than just negotiate contracts. They run lead on marketing opportunities and sponsorships as well. They are also more familiar with the intricacies of how to advantageously set up a contract for the players. They definitely provide a benefit for the players. 

[*Awful Llama*]

(08-22-2023, 01:05 PM)KillerGoose Wrote: This can't be the answer, or more players would simply opt to not have them. Agents will typically do more than just negotiate contracts. They run lead on marketing opportunities and sponsorships as well. They are also more familiar with the intricacies of how to advantageously set up a contract for the players. They definitely provide a benefit for the players. 

Fans see agents as an unnecessary evil, mere impediments to their favorite star playing for their favorite team for cheap.  They're cast as a cartoon devil who owns the player's soul and sits on his shoulder telling him to hold out.  But professional sports are a complicated business and a player needs to have representation looking out for their needs and to maximize their earnings, acting a bit like a bulldozing parent. Now, some may get away with acting on their own behalf, but I'd imagine most would be out of their depth in that regard.  It's like that old adage: a lawyer who represents himself has a fool for a client.  

[George Cantstandya]

(08-22-2023, 01:02 PM)HarleyDog Wrote: I think this is smart. Why pay an agent 10% or more if you know what you want and what satisfies you? Heck, all you have to do is read the paper to know what the latest big contract was and then rate yourself accordingly. After all, Lamar is his own brand. All agents do is muddy the waters and in many cases cause disputatiousness between players and their teams. 

Agent's take for NFL contacts are capped at a max of 3%.  Agent's can get a higher percent for endorsements.  So he saved max about 7.8 million on the contract.  If he actually saved that much is debatable.  Could an agent have gotten him more money than he negotiated to offeset that 7.8 million savings?  Could an agent have gotten the deal done earlier so his money could be invested earlier to increase his earning on investment?  Who knows but it is a possibility.  Also I have seen some discussions that his lack of an agent is possibly costing him endorsement opportunities.  Don't know if that is true or maybe he just isn't that interested in them. 

[BengalsLUFC]

Don’t know if it’s the same over there but over here the club pays the taxes, insurance etc.

So if Burrow earns 320 million over the next 6 years chances are minus agent fees he’s going to earn 320 million.

[*Awful Llama*]

(08-22-2023, 01:37 PM)BengalsLUFC Wrote: Don’t know if it’s the same over there but over here the club pays the taxes, insurance etc.

So if Burrow earns 320 million over the next 6 years chances are minus agent fees he’s going to earn 320 million.

The league has been itching to place a permanent franchise in Europe anyway, so I guess we have to hope Joe doesn't hear about your tax laws and start lobbying Roger to move the team

[BFritz21]

(08-22-2023, 01:05 PM)KillerGoose Wrote: This can't be the answer, or more players would simply opt to not have them. Agents will typically do more than just negotiate contracts. They run lead on marketing opportunities and sponsorships as well. They are also more familiar with the intricacies of how to advantageously set up a contract for the players. They definitely provide a benefit for the players. 

Exactly. There's fine print in the contracts that players might not think about or even completely understand all of the ramifications that come along with it.

Also, they need them for if they hit free agency, look for endorsements, handle issues that might arise with the team, etc. 

(08-22-2023, 01:36 PM)George Cantstandya Wrote: Agent's take for NFL contacts are capped at a max of 3%.  Agent's can get a higher percent for endorsements.  So he saved max about 7.8 million on the contract.  If he actually saved that much is debatable.  Could an agent have gotten him more money than he negotiated to offeset that 7.8 million savings?  Could an agent have gotten the deal done earlier so his money could be invested earlier to increase his earning on investment?  Who knows but it is a possibility.  Also I have seen some discussions that his lack of an agent is possibly costing him endorsement opportunities.  Don't know if that is true or maybe he just isn't that interested in them. 

I think most take 1%, which is a hell of a deal for a player to make sure he's taken care of.

[*Nately120*]

(08-22-2023, 01:05 PM)KillerGoose Wrote: This can't be the answer, or more players would simply opt to not have them. Agents will typically do more than just negotiate contracts. They run lead on marketing opportunities and sponsorships as well. They are also more familiar with the intricacies of how to advantageously set up a contract for the players. They definitely provide a benefit for the players. 

Wasn't the narrative a year ago when Jackson was playing without a contract and he got injured that he should have known better and paid an agent rather than rely on his mom to be his agent?  I don't know if his mom is qualitied for that stuff, I'm just saying that I think he was being laughed at a year ago for this stuff, but managed to "alls well that ends well" his way out of being a long-term laughingstock. 


I personally assume agents are another of those jobs that people just assume anyone can do and they don't do anything but take money.