CowtownAg06 said:
I think CBT is calced in AAV regardless of deferred. Not sure how opt outs factor in. That structure may help the Mets cash flow (as if Cohen cares) but I don't think gives them tax relief.
The 10 yr mark is intentional. Any deferment that is after 10 yrs doesn't count on the CBT.
True it is ACV, but if money is paid beyond 10 years, it isn't included.
You will hear PCV ( I think?!) and that gets calculated by MLBPA, MLB, Agents, etc... Like Ohtani's numbers. The intent is to determine the Present Value which considers depreciation and inflation.
For Cash-Flow... you are right Cohen doesn't care.
Some math.
$12M for 1yr paid in 2024 means NYM pays 110% CBT Tax. $13.2M, so $25.2M.
As structured, he'll pay $4.5M + 110% on that ($4.95M), so $9.45K. and then $7.5 on the backend. $16.95M Total.
Keeping in mind that if Cohen invests that $7.5M and gets 7% over 10 years... that $7.5M will be at $14.8M when he starts to pay out that $1.5M in annual payments.