The Pujols Contract

Do you know what makes me mad (with a small m)? Bad Math.

Last night on my way home from class, I heard Cliff Saunders say something provocative to get reactions, as talk radio hosts usually do.  He said all things being equal, if he were Pujols, he'd take the Miami offer over the Cardinals, then, as though he could feel 10,000 St. Louisans gasping and yelling "How DARE he?!", he followed with "And let me tell you why.  State Taxes.  Albert's $220 Million will be about $165 Million after Missouri taxes, and Florida has NO state income tax."

My BS meter immediately went off before even having to calculate the numbers.  Some quick math and I discovered Mr. Saunders thinks he's paying 25% state tax in Missouri.  I know Missouri basically works out to a flat 6% if you make enough to survive, putting the bill at around $13.2 Million, as opposed to Cliff's $55 Million .  His accountant better be worried, Cliff may be coming for the 19% of his income the cheater pocketed last year.  To his credit, he did come back from break and apologize for the math error (what I think he really meant was, sorry for making up numbers on the spot to be provocative), and state that the right bill would be around $13 million.  So the Cardinals should simply offer $234+ million so that after taxes, it works out the same, right?

Then I started thinking about the funny mental image I get every year I do my state taxes.  At least in Missouri, there's a specific section asking if you are a performer of some sort and if any of your income was earned in other states, making me wistfully think of running off to join the circus.  My understanding is that this applies to professional athletes as well, as I recall Sports Illustrated throwing out the "Fun Fact" of how much California state tax Alex Rodriguez would pay during his 10-year, $252 Million deal.  So, I ran the numbers using next year's schedule as a guide.  I know Houston is leaving the NL Central and interleague play changes from year to year, but all I have to go on is the 2012 schedule for now, so let's assume everything is consistent year to year, and ignore anything but the 162 game schedule for simplicity

Assumptions for simplicity:
Pujols will pay the top marginal tax rate on ALL of his money
Tax rates will stay the same for 10 years.
Each regular season game counts for 1/162 of his pay.
The schedule and states of teams stay the same for the next 10 years.

My source for the state tax rates.

City	State	Rate	Marlins	Income	Tax	Cardinals	Income	Tax
HOU	TX	0.00%	3	4.07	0	9	12.22	0
MIA	FL	0.00%	81	110.00	0	4	5.43	0
SEA	WAS	0.00%	0	0	0	0	0	0
TB	FL	0.00%	3	4.07	0	0	0	0
TEX	TX	0.00%	0	0	0	0	0	0
PHI	PA	3.07%	9	12.22	0.38	3	4.07	0.13
PIT	PA	3.07%	3	4.07	0.13	6	8.15	0.25
DET	MI	4.35%	0	0	0	3	4.07	0.18
ARI	AZ	4.54%	4	5.43	0.25	3	4.07	0.18
COL	CO	4.63%	4	5.43	0.25	3	4.07	0.19
CHC	IL	5%	3	4.07	0.20	9	12.22	0.61
CHW	IL	5%	0	0	0	0	0	0
BOS	MA	5.30%	3	4.07	0.22	0	0	0
BAL	MD	5.50%	0	0	0	0	0	0
CIN	OH	5.93%	3	4.07	0.24	9	12.22	0.72
CLE	OH	5.93%	3	4.07	0.24	0	0	0
ATL	GA	6%	9	12.22	0.73	3	4.07	0.24
KC	MO	6%	0	0	0	3	4.07	0.24
STL	MO	6%	3	4.07	0.24	81	110.00	6.60
MIL	WI	7.75%	4	5.43	0.42	6	8.15	0.63
MIN	MN	7.85%	0	0	0	0	0	0
DC	DC	8.50%	9	12.22	1.04	4	5.43	0.46
NYM	NY	8.97%	9	12.22	1.10	4	5.43	0.49
NYY	NY	8.97%	0	0	0	0	0	0
LAA	CA	9.30%	0	0	0	0	0	0
LAD	CA	9.30%	3	4.07	0.38	7	9.51	0.88
OAK	CA	9.30%	0	0	0	0	0	0
SD	CA	9.30%	3	4.07	0.38	3	4.07	0.38
SF	CA	9.30%	3	4.07	0.38	2	2.72	0.25
TOR	Canada, eh		0	0	0	0	0	0
			162	220	6.57	162	220	12.44
					Extra Cost of STL over MIA			5.87

I'm glad neither team is travelling to Toronto.  I don't know how that works.

So, all things being equal, the total difference over 10 years to Albert is around $5.87 Million, or $587,000 per year.  It will also scale linearly to the actual contract value, so if he signs for $200 million the difference is closer to $533,000 per year.  I suppose it's not an insignificant sum, but it's hard to think he'd leave fans that would likely never turn on him, even when he's a 41 year old base-clogger, and the chance to be a Cardinal for life, someone the kids want to see at opening day ceremonies for the next 40-60 years, the next Stan Musial in this town, for under $6 million.  Of course, the Cardinals are low-balling him, as it'll mean a lot to ticket sales to have him around for the rest of his career and life, so maybe they could throw in another $600k a year.  Add 20 cents to each ticket sold for the next 10 years and they should have it.  Look at me, the Great Compromiser.