The San Diego Padres and shortstop Fernando Tatis Jr. have agreed to a 14-year, $340 million contract, a source close to the negotiations who asked to remain anonymous told Sportico Wednesday night. It is the longest player contract in MLB history and one of the most lucrative.
Tatis, 22, has played in only two MLB seasons and a total of 143 games. However, he has dominated during that stretch, belting 39 home runs and amassing an OPS of .956. The Padres clearly believe Tatis will continue to excel, and his contract exceeds the previous San Diego club record pact of 10 years, $300 million that was signed by Manny Machado in 2019. The Angels’ Mike Trout agreed to his mammoth 12-year, $426.5 million deal in 2019 as well. Tatis and Machado are both represented by Dan Lozano of MVP Sports.
The contract will make Tatis among the wealthiest athletes, but much of his pay will be redirected to the federal treasury, and to state governments where he resides and plays games, particularly California.
It is impossible to predict with 100% accuracy how much Tatis will pay in taxes. That amount will depend on, among other factors, tax rates in the state where Tatis resides, potential changes to federal, state and municipal rates over the next decade and a half, and the possibility of relocation should the Padres trade him.
Adding another complication, Tatis signed a deal with investment firm Big League Advance that called for him to receive undisclosed advanced payments as a minor leaguer. In exchange, as Sportico’s Brendan Coffey explained last fall, Tatis relinquished a percentage of his future earnings if he became an MLB player.
With those important caveats acknowledged, we assume for purposes of making a projection that Tatis will reside in California and that tax rates will remain constant. In that scenario, he will pay approximately $191,020,000 in federal and state income taxes. Those taxes include so-called “jock taxes,” which are imposed by states (and/or cities) on visiting teams’ players for games played in their jurisdictions.
So how much will Tatis actually “take home”? He’ll net about $168,980,000 after taxes.
This projection reflects the fact that regardless of which state Tatis resides, he’ll pay the highest federal income tax rate (37%) on the portion of his income that exceeds $518,401 (or, if married filing jointly, income that exceeds $622,051.) He will also pay substantial state taxes to California—which imposes a 13.3% tax on those who earn more than $1 million a year—based on his wages in the state and the fact that we are assuming he is a resident there.
(This post was edited to reflect the contract value of $340 million.)