fridayfrenzy":ii332qvo said:
The Seattle FO has to do what is in their best interest. If they believe that signing him now is advantageous for the cap and in securing a lower long term contract then they should give RW a bump in salary.
If the Seattle FO does not sweeten the pot then there isn't really anything in it for RW to sign at this time.
What is in it for RW to sign at this time?
-signing bonus received 6-8 months sooner and can use that to generate investment income.
What is in for Seattle to sign at this time?
-get to use 2015 salary cap space for the pro-rated bonus
-ability to plan for Wagner and cap space going forward
-do not have the risk of any other big QB contracts signing before that could increase the market value of RW
Let's suppose that RW did sign, and got a signing bonus of $20 million dollars.
Right off the top you need to subtract maybe 40%. . for Federal and State Taxes. Actually, it's more complicated than that. The top Federal rate is 39.6%; Washington has no state income tax, but pro football players have to pay income taxes in the states where they play. For example, in California the top rate is 13.3%; if the Seahawks play in California, and a player receives an average of a million dollars a game. . .he would have to write out a check to California for $133,000 dollars.
But let's ignore that . . .and just assume a combined tax rate of 40%. That means out of the $20 million dollar bonus, he would get to bank $12 million dollars. Let's say he puts it in a high interest CD for a year; According to the rate for today, a year from today he would have accumulated. . . 1.25% of $12 million dollars, or $150,000.
Now consider. . . if holding out for a year would be worth a contract worth $22 million a year instead of $20 million a year over four years. . . that works out to an extra $8 million dollars.
Hmm. . .that would be a tough choice. . . $8 million dollars vs. $150,000. . . .