It’s official. After agreeing to contract terms just ahead of Opening Day, the New York Mets and star shortstop Francisco Lindor put pen to paper this week to complete the third richest deal in the history of Major League Baseball. The 10-year deal is worth $341 million, including $50 million deferred, which will be paid out $5 million a year starting in 2032.
The news comes on the heels of the Mets’ home opener, a 3-2 win over the Marlins featuring a walk-off hit-by-pitch by Michael Conforto.
Lindor’s contract is not baseball’s biggest deal, but the four-time All-Star will set a pair of MLB records with the pact. He’ll collect $43.3 million from the Amazins in 2021, including his $22.3 million base salary and a $21 million signing bonus paid to be paid after the deal is approved by the league office. It represents the largest lump sum signing bonus payout in the history of the sport, as is the $43.3 million one-year tally.
The salary and bonus total for Lindor tops Los Angeles Dodgers pitcher Trevor Bauer, who is set to earn $38 million in 2021, the previous one-year high. Lindor’s haul is higher than Steph Curry’s record $43 million salary in the NBA this season. The only athletes to ever top it in North American team sports in a calendar year are a handful of NFL quarterbacks.
Signing bonuses are a regular feature in the NFL’s blockbuster deals. They give players upfront cash in a sport where base salaries are rarely guaranteed, and teams use the bonuses to spread out salary cap implications over the life of the contract. QBs have set the standard—Dak Prescott locked up his $66 million bonus last month, a tick ahead of the $65 million Russell Wilson received in 2019, which was paid in two parts.
Large signing bonuses were rare in MLB deals until they popped up in many of the mega-contracts in recent years. The biggest was the $65 million bonus for Mookie Betts for his Los Angeles Dodgers contract, which topped the $50 million bonus Max Scherzer had in his Washington Nationals deal. Both of these payouts were officially tagged as “signing” bonuses, but Betts’ money is paid over 15 years and Scherzer’s over four years. Clayton Kershaw got a $23 million bonus from the Dodgers, but it gets paid over three years.
Lindor’s signing bonus is the biggest paid out in a single year, a tick ahead of the $20 million that Bryce Harper, Mike Trout and Manny Machado each secured in the massive deals they signed within a month of each other, just ahead of the 2019 season. All three of their deals had a much lower first-year base salary when the signing bonus was paid.
The signing bonus has multiple benefits for Lindor. There is the time value of money, and Lindor gets a big chunk of his money now. MLB and its players are also facing a labor showdown as the current collective bargaining agreement expires Dec. 1. Any missed games from a work stoppage will cut player salaries. It does not impact signing bonuses.
The biggest impact is on taxes. Signing bonuses are taxed in the state you reside, instead of the “jock” tax on base salaries that is a function of where games are played. Lindor’s home is in Florida, which has no state income tax. New York state just raised the tax rate on its highest-paid residents this week. It means a 14.8% rate for those earning more than $25 million in New York City, including the city’s 3.88% tax.
The Mets’ new billionaire owner Steve Cohen made a splash when the club traded for Lindor in January. Cohen can afford the $21 million payment. The hedge fund titan’s $16 billion net worth is greater than the next three richest MLB owners combined, according to Forbes.
Lindor and his agent, David Meter, held all the cards in this negotiation. Lindor is a wildly talented player at the plate and in the field. He’s also one of the most charismatic and marketable players in the game with ever-changing hair color. His endorsement partners include New Balance, Oakley, Gatorade and Rawlings. Lindor is one of just three MLB players with a signature shoe, joining Trout and Harper. The Mets have played second fiddle to the Yankees in New York forever and need splashy players to make a dent in that mindset. Lindor set Opening Day as a deadline to complete a contract and was willing to test free agency in the fall if a deal wasn’t complete.
Deadlines spur action.