I'm not pretending to know all the ins and outs but let's take a look at the decision being made by TC. he is being projected on a good draft day 2nd round but everyone seems comfortable around 3rd -6th. Let's say he is the third RB taken this year. Last year, the first 2 RB taken were in the second round #54 and #55. Our own Cody Latimer went #56.
Let's say the same applies to this draft and TC goes as the third back at #56 in the draft. That is the best case scenario going in the 2nd round. Cody's contract totaled 4-years at $3,708,650 with a $1,017,200 signing bonus. $927,163 is the average annual salary with only $2,025,775 Guaranteed. That looks like the signing bonus and 1 year to me (contract site below).
If this type of contract is a great case scenario, I argue taking an insurance policy and returning. I read that a policy premium cost is about 1% of the amount of the policy. So a $5,000,000 Policy would cost $50,000. So if TC were to get injured his senior year and can't be drafted or has his draft status severly hurt, he gets paid $5,000,000 PLUS it is Tax free. Of the $1,017,200 signing bonus, Cody was lucky if he took home $500,000 after taxes. With those numbers, I'd be hoping to be injured. That is 10 fold the take home in the first year. I'm talking real tax rates fed, state, city, workers comp, med, etc. it's over 50%.
Who pays the Premium? Well the NCAA does or the player does with his first contract in NFL. This is a no brainier to me. I'd do the Teddy Bridgewater and get a $10,000,000 policy and play with reckless abandon. No fear.
Seems like a classic arbitrage scenario. They are insuring you at your peak status today. If you improve it and go higher in the draft great! If you drop severely you are covered and will make more money than you would have with a full career in all likelihood considering taxes.
EDIT
One more thing. Let's say TC takes the $10MM policy and gets injured. His take home of $10MM is greater than Clowney's take home after taxes and he was the #1 pick in 2014.
What am I missing Goose.
This post was edited on 12/27 11:30 AM by Hoosier_Hack
This post was edited on 12/27 11:54 AM by Hoosier_Hack
Contracts
Let's say the same applies to this draft and TC goes as the third back at #56 in the draft. That is the best case scenario going in the 2nd round. Cody's contract totaled 4-years at $3,708,650 with a $1,017,200 signing bonus. $927,163 is the average annual salary with only $2,025,775 Guaranteed. That looks like the signing bonus and 1 year to me (contract site below).
If this type of contract is a great case scenario, I argue taking an insurance policy and returning. I read that a policy premium cost is about 1% of the amount of the policy. So a $5,000,000 Policy would cost $50,000. So if TC were to get injured his senior year and can't be drafted or has his draft status severly hurt, he gets paid $5,000,000 PLUS it is Tax free. Of the $1,017,200 signing bonus, Cody was lucky if he took home $500,000 after taxes. With those numbers, I'd be hoping to be injured. That is 10 fold the take home in the first year. I'm talking real tax rates fed, state, city, workers comp, med, etc. it's over 50%.
Who pays the Premium? Well the NCAA does or the player does with his first contract in NFL. This is a no brainier to me. I'd do the Teddy Bridgewater and get a $10,000,000 policy and play with reckless abandon. No fear.
Seems like a classic arbitrage scenario. They are insuring you at your peak status today. If you improve it and go higher in the draft great! If you drop severely you are covered and will make more money than you would have with a full career in all likelihood considering taxes.
EDIT
One more thing. Let's say TC takes the $10MM policy and gets injured. His take home of $10MM is greater than Clowney's take home after taxes and he was the #1 pick in 2014.
What am I missing Goose.
This post was edited on 12/27 11:30 AM by Hoosier_Hack
This post was edited on 12/27 11:54 AM by Hoosier_Hack
Contracts
