vlad-imagn-images.png
Imagn Images

The big off-field news this week in Major League Baseball was the 14-year, $500 million extension Vladimir Guerrero Jr. has signed with the Blue Jays. The deal was officially announced by the Jays Wednesday, meaning every hurdle has been cleared and Vlad Jr. is locked up for, presumably, the rest of his career. 

Details on Guerrero's contract also came out Wednesday and the jaw-dropping portion is that it includes a $325 million signing bonus, which is a whopping 65% of the entire value of the contract, according to Sportsnet. There's no deferred money, no opt-out clauses and a full no-trade clause. Of that bonus, $20 million is paid this season and then the rest of the bonus is spread from 2026-39.

The bonus still counts toward the average annual value of the contract. This means that from 2026-39, Guerrero's luxury tax figure for the Blue Jays will be $35.71 million each year.

Winners and losers of the Vladimir Guerrero Jr. contract extension: How Blue Jays, Kyle Tucker, others fared
R.J. Anderson
Winners and losers of the Vladimir Guerrero Jr. contract extension: How Blue Jays, Kyle Tucker, others fared

So why is such a huge portion of the deal a signing bonus instead of just a straight salary? 

For lack of a better term, it's paperwork on the business end that seems to benefit Guerrero more than the team. Signing bonuses for tax purposes are figured via the player's permanent residence and for Guerrero, that's Florida -- a state with no income tax. In other words, Guerrero will be taxed in Toronto on his regular salary, but the signing bonus taxes are figured through his address in Florida. 

The other wrinkle is that player salaries are not paid during any work stoppage, such as the COVID shutdown in 2020 and if there are future labor disputes (a strike or lockout) that eliminate games. Salaries are paid based on the number of games played. The bonus, on the other hand, will be paid out regardless. Guerrero is guaranteed that money.

Perhaps this was the Blue Jays giving Guerrero extra incentive to sign an extension before hitting free agency, but the bonus appears to be a major sweetener for Guerrero.