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View Full Version : Andre re-structures contract


djohn2oo8
09-03-2013, 04:12 PM
Mark Berman @MarkBermanFox26

Texans restructure Andre Johnson contract4 2013. Was 2make $10.5M n salary. Now Johnson will make $5 million n salary w/ $5.5 million bonus

Jackie Chiles
09-03-2013, 05:12 PM
Honest question, how is Andre getting screwed? He is gaining in signing bonus the exact amount he loses in base salary. More of his money just got guaranteed.

Carr Bombed
09-03-2013, 05:15 PM
Honest question, how is Andre getting screwed? He is gaining in signing bonus the exact amount he loses in base salary. More of his money just got guaranteed.

Which is why players are happy to do it. The dude just deposited half his base salary into the bank.

Texian
09-03-2013, 05:16 PM
i cant believe the nfl player's union agreed to this.

this is a disgusting immoral act by the nfl. players shouldnt have to do this. I cant believe no nfl player has been smart enough to wake up to these financial fleecing and challenge to change this situation.

players are getting screwed and they dont even know it.

I don't understand? When a player restructures they convert their salary in to a signing bonus which they get immediately up front. In Andre's case he gets a $5.5 mil check today and still gets a salary of $5 million. Because of this the team reduces it's salary cap by the bonus amount and is able to spread the amount of the new signing bonus over the remaining years of the contract. How is this a bad thing for players involved?

TheMatrix31
09-03-2013, 05:21 PM
i cant believe the nfl player's union agreed to this.

this is a disgusting immoral act by the nfl. players shouldnt have to do this. I cant believe no nfl player has been smart enough to wake up to these financial fleecing and challenge to change this situation.

players are getting screwed and they dont even know it.

http://img.pandawhale.com/40276-michael-jordan-laughing-gif-76O3.gif

DX-TEX
09-03-2013, 05:23 PM
I think he was being sarcastic guys.......


Anyways, does anyone, including the Texans FO, even know what Dre's original contract looked like? It has been changed like 4 times.

Brisco_County
09-03-2013, 05:23 PM
It's a win/win, and improves the cap situation for preparing extensions for Cushing next year and Watt the following year.

ESAD2-14
09-03-2013, 05:23 PM
i cant believe the nfl player's union agreed to this.

this is a disgusting immoral act by the nfl. players shouldnt have to do this. I cant believe no nfl player has been smart enough to wake up to these financial fleecing and challenge to change this situation.

players are getting screwed and they dont even know it.

Ahem:

http://cdn.memegenerator.net/instances/400x/30641204.jpg

In the event you were being sarcastic:

http://dynastyfootballwarehouse.com/wp-content/uploads/2012/03/andre-johnson.jpg

Playoffs
09-03-2013, 05:40 PM
i cant believe the nfl player's union agreed to this.

this is a disgusting immoral act by the nfl. players shouldnt have to do this. I cant believe no nfl player has been smart enough to wake up to these financial fleecing and challenge to change this situation.

players are getting screwed and they dont even know it.

http://i2.minus.com/inZi49yUqMO2w.jpg

rustygallier
09-03-2013, 05:40 PM
This just shows how unselfish Andre is by agreeing to this contract. Man we have a bunch of stand up guys on this team. I think our teams character is head and shoulders above the rest of the teams in the nfl.

TheMatrix31
09-03-2013, 05:58 PM
I think he was being sarcastic guys.......




I don't think he was. And if he was, he should maybe build more of a reputation here before doing so, so people get it.

htowntexans1985
09-03-2013, 06:04 PM
I think he was being sarcastic guys.......


Anyways, does anyone, including the Texans FO, even know what Dre's original contract looked like? It has been changed like 4 times.

Unfortunately, I don't think he was sir.:vincepalm:

htowntexans1985
09-03-2013, 06:08 PM
This just shows how unselfish Andre is by agreeing to this contract. Man we have a bunch of stand up guys on this team. I think our teams character is head and shoulders above the rest of the teams in the nfl.

How is he being unselfish taking his 5 million now rather than later? LOL. Would you rather your boss just pay you your yearly salary now or pay your salary in payments? Keep in mind Andre doesn't need the 5 million. Uncle Bob has kept his plate full.

CloakNNNdagger
09-03-2013, 06:16 PM
Not too shabby for Andre.

PDS ‏@PatDStat 1h

Andre Johnson has restructured his contract the past three seasons for $18.2 million in cash as a bonus. 11-$7.5, 12-$5.2, 13-$5.5 #Texans

EllisUnit
09-03-2013, 06:28 PM
i cant believe the nfl player's union agreed to this.

this is a disgusting immoral act by the nfl. players shouldnt have to do this. I cant believe no nfl player has been smart enough to wake up to these financial fleecing and challenge to change this situation.

players are getting screwed and they dont even know it.

5 million a year to play a game, no players have been spoiled is the fact of the matter. The guys who make the cars they drive, homes they live in, food they eat are barely scrapping by. If not for the little guy like us the nfl couldnt pay their players a dime.

You have guys who work 100 hours a week to feed their family thats barely getting by, pretty sure AJ will be just fine

76Texan
09-03-2013, 06:36 PM
5 million a year to play a game, no players have been spoiled is the fact of the matter. The guys who make the cars they drive, homes they live in, food they eat are barely scrapping by. If not for the little guy like us the nfl couldnt pay their players a dime.

You have guys who work 100 hours a week to feed their family thats barely getting by, pretty sure AJ will be just fine

You, a little guy?
Hahaha; that's funny. :peek:

EllisUnit
09-03-2013, 06:38 PM
You, a little guy?
Hahaha; that's funny. :peek:

HAHA you know what i mean :handshake:

rustygallier
09-03-2013, 06:47 PM
How is he being unselfish taking his 5 million now rather than later? LOL. Would you rather your boss just pay you your yearly salary now or pay your salary in payments? Keep in mind Andre doesn't need the 5 million. Uncle Bob has kept his plate full.

He is being unselfish by allowing the Texans to lower the salary cap for next year . This will allow a little wiggle room for Cush and Watt when they get their salaries.

ObsiWan
09-04-2013, 02:54 AM
How is he being unselfish taking his 5 million now rather than later? LOL. Would you rather your boss just pay you your yearly salary now or pay your salary in payments? Keep in mind Andre doesn't need the 5 million. Uncle Bob has kept his plate full.
I dunno about unselfish but there are financial advantages (and probably some disadvantages that are beyond me) to having a cool $5 mil to invest in one chunk rather than having it distributed over the whole season.

I'd love the chance to "wrestle" with that little problem.
:D

Lucky
09-04-2013, 06:47 AM
this is a disgusting immoral act by the nfl. players shouldnt have to do this. I cant believe no nfl player has been smart enough to wake up to these financial fleecing and challenge to change this situation.
I hate to say it. But I smell a troll. Maybe someone who is completely clueless to the business side of the NFL? More likely, a troll. Those are the 2 possibilities.

HJam72
09-04-2013, 07:34 AM
OK, call me clueless, but my first thought was: why doesn't everybody just take a 0 amount for their salary and move 100% of what it was to bonus money in order to help the team deal with the salary cap?

I guess the answer is taxes. Take a bunch of your money up front and you pay more in taxes--probably a lot more.

I guess this is why they, IIRC, gave him the extra .5 million when they changed it to signing bonus.

Am I right (at least in general terms), or am I still clueless?

infantrycak
09-04-2013, 07:43 AM
OK, call me clueless, but my first thought was: why doesn't everybody just take a 0 amount for their salary and move 100% of what it was to bonus money in order to help the team deal with the salary cap?

I guess the answer is taxes. Take a bunch of your money up front and you pay more in taxes--probably a lot more.

I guess this is why they, IIRC, gave him the extra .5 million when they changed it to signing bonus.

Am I right (at least in general terms), or am I still clueless?

Not in this instance. He is making the same money this year so not sure where you get the "extra $5 mil." He was set to make the same amount as salary this year. Now some of it is signing bonus and the remainder is still salary. Since it is all in the same tax year except maybe one game (haven't checked the calender on that) the tax ramifications should be little or none.

PapaL
09-04-2013, 08:01 AM
Not in this instance. He is making the same money this year so not sure where you get the "extra $5 mil." He was set to make the same amount as salary this year. Now some of it is signing bonus and the remainder is still salary. Since it is all in the same tax year except maybe one game (haven't checked the calender on that) the tax ramifications should be little or none.

Bonuses are taxed different than regular income.

On the bright side, he'll save money if he gets suspended for a game since his game check is now roughly half. Finnagen should tread carefully.

infantrycak
09-04-2013, 08:16 AM
Bonuses are taxed different than regular income.

Different doesn't necessarily mean more - Link (http://blog.turbotax.intuit.com/2011/12/09/bonus-time-how-bonuses-are-taxed-and-treated-by-the-irs/)

The top marginal rate is 39.6%. AJ's bonus (supplemental income) will most likely be taxed at 25% on the 1st mil and 35% on the remainder, i.e. taxed less.

TEXANRED
09-04-2013, 08:39 AM
I think he was being sarcastic guys.......




I hope not cus I agree with him. AJ only making $5 million this year is a tragedy. Don't the Texans know AJ has a family to feed? I mean he has a child that he has to pay $1600 a month in child support to.

I should contact AJ and let him know I have a room over my garage that he can stay in if times start to get to tough for him.

badboy
09-04-2013, 08:52 AM
Hey, is this the thread where I can get excellent financial advice?

ChampionTexan
09-04-2013, 08:56 AM
OK, call me clueless, but my first thought was: why doesn't everybody just take a 0 amount for their salary and move 100% of what it was to bonus money in order to help the team deal with the salary cap?

I guess the answer is taxes. Take a bunch of your money up front and you pay more in taxes--probably a lot more.

I guess this is why they, IIRC, gave him the extra .5 million when they changed it to signing bonus.

Am I right (at least in general terms), or am I still clueless?

Taxes aside, there's an NFL minimum salary in the CBA that would preclude the base (paragraph 5) salary from ever going to zero. While AJ's remaining 2013 base salary is still well above the minimum, it's not uncommon at all to see these type of restructures re-set that base salary to the minimum.

NCTexan
09-04-2013, 08:59 AM
Taxes aside, there's an NFL minimum salary in the CBA that would preclude the base (paragraph 5) salary from ever going to zero. While AJ's remaining 2013 base salary is still well above the minimum, it's not uncommon at all to see these type of restructures re-set that base salary to the minimum.

Not to mention the cap implications of having every one on bonus. Bonus's are spread over the life of the contract, giving you dead cap in later years if you part ways.

steelbtexan
09-04-2013, 09:09 AM
This just shows how unselfish Andre is by agreeing to this contract. Man we have a bunch of stand up guys on this team. I think our teams character is head and shoulders above the rest of the teams in the nfl.

Not saying this isn't true but,

If getting to put 5.5 mil in the bank immediately shows you are unselfish, then call me unselfish every day of the week and twice on Sunday.

Just to be clear, AJ is one of the most unselfish guys in the NFL. How many yrs are remaining on AJ's contract?

PapaL
09-04-2013, 09:41 AM
Hey, is this the thread where I can get excellent financial advice?

"Excellent" muahahaha :evil:

2012Champs
09-04-2013, 09:52 AM
That is completely wrong, bonus are Supplemental Wages not regular income. The link infantrycak posted explains how it's different (not necessarily more); especially bonuses over $1M. None of these guys are going to HR Block to have their taxes done. 1%'er problems.



Since my bonus is a large part of my total comp for the year why isnt it broken out on my w2, why does turbo tax never ask what my supplemental wages are?


7. Supplemental Wages
Supplemental wages are wage payments to an employee that are not regular wages. They include, but are not limited to, bonuses, commissions, overtime pay, payments for accumulated sick leave, severance pay, awards, prizes, back pay, retroactive pay increases, and payments for nondeductible moving expenses. Other payments subject to the supplemental wage rules include taxable fringe benefits and expense allowances paid under a nonaccountable plan. How you withhold on supplemental wages depends on whether the supplemental payment is identified as a separate payment from regular wages. See Regulations section 31.3402(g)-1 for additional guidance for wages paid after January 1, 2007. Also see Revenue Ruling 2008-29, 2008-24 I.R.B. 1149, available at www.irs.gov/irb/2008-24_IRB/ar08.html.

Withholding on supplemental wages when an employee receives more than $1 million of supplemental wages from you during the calendar year. Special rules apply to the extent supplemental wages paid to any one employee during the calendar year exceed $1 million. If a supplemental wage payment, together with other supplemental wage payments made to the employee during the calendar year, exceeds $1 million, the excess is subject to withholding at 39.6% (or the highest rate of income tax for the year). Withhold using the 39.6% rate without regard to the employee's Form W-4. In determining supplemental wages paid to the employee during the year, include payments from all businesses under common control. For more information, see Treasury Decision 9276, 2006-37 I.R.B. 423, available at www.irs.gov/irb/2006-37_IRB/ar09.html.

Withholding on supplemental wage payments to an employee who does not receive $1 million of supplemental wages during the calendar year. If the supplemental wages paid to the employee during the calendar year are less than or equal to $1 million, the following rules apply in determining the amount of income tax to be withheld.

Supplemental wages combined with regular wages. If you pay supplemental wages with regular wages but do not specify the amount of each, withhold federal income tax as if the total were a single payment for a regular payroll period.

Supplemental wages identified separately from regular wages. If you pay supplemental wages separately (or combine them in a single payment and specify the amount of each), the federal income tax withholding method depends partly on whether you withhold income tax from your employee's regular wages.
1.If you withheld income tax from an employee's regular wages in the current or immediately preceding calendar year, you can use one of the following methods for the supplemental wages.

a.Withhold a flat 25% (no other percentage allowed).

b.If the supplemental wages are paid concurrently with regular wages, add the supplemental wages to the concurrently paid regular wages. If there are no concurrently paid regular wages, add the supplemental wages to alternatively, either the regular wages paid or to be paid for the current payroll period or the regular wages paid for the preceding payroll period. Figure the income tax withholding as if the total of the regular wages and supplemental wages is a single payment. Subtract the tax withheld from the regular wages. Withhold the remaining tax from the supplemental wages. If there were other payments of supplemental wages paid during the payroll period made before the current payment of supplemental wages, aggregate all the payments of supplemental wages paid during the payroll period with the regular wages paid during the payroll period, calculate the tax on the total, subtract the tax already withheld from the regular wages and the previous supplemental wage payments, and withhold the remaining tax.

2.If you did not withhold income tax from the employee's regular wages in the current or immediately preceding calendar year, use method 1-b above. This would occur, for example, when the value of the employee's withholding allowances claimed on Form W-4 is more than the wages.

Regardless of the method you use to withhold income tax on supplemental wages, they are subject to social security, Medicare, and FUTA taxes.



We need TD in on this one because I am now really curious if I am misunderstanding what I thought was a common misunderstanding

IDEXAN
09-04-2013, 09:56 AM
I would think there would be provisions to somehow "gross-up" the additional
salary this year because of the greater tax liabilities incurred thru progressitivity. This would also likely include the considerations for the alternative minimum tax. And isn't a players income taxed where the game is played, so isn't there also state income tax considerations for road games even if the player is based
in somewhere like Texas ?

PapaL
09-04-2013, 09:58 AM
I would think there would be provisions to somehow "gross-up" the additional
salary this year because of the greater tax liabilities incurred thru progressitivity. This would also likely include the considerations for the alternative minimum tax. And isn't a players income taxed where the game is played, so isn't there also state income tax considerations for road games even if the player is based
in somewhere like Texas ?

Yeah I read that somewhere too. They pay state taxes for each state they play again; further complicating things.

But I'm sure TurboTax will take care of that in a jiffy. /sarcasm

disaacks3
09-04-2013, 12:08 PM
Pertinent to the argument on the bonus payouts:

Players and agents would also try to use their residence in those states toward better treatment on signing bonus payments. I dealt with countless players and agents from Texas and Florida who wanted language in the bonus riders of their contracts indicating they were residents of those states and therefore had no state tax on the earnings. We would not agree to such language, as our own tax advice was that a Wisconsin company executed the contracts and bonus checks and Wisconsin law governed them. The players and agents could deal with their own accountants and advisers in trying to curry favorable state tax treatment of their bonus checks. That was out of our hands.

Another tax issue that came up in December and was discussed in this space was Federal Tax Code 409A. It was designed to target bloated executive-compensation packages and called for a full tax on signing bonuses and future guaranteed money in the year of the contract negotiation, even if the money was deferred over several years.

Since almost every NFL signing bonus of any significance is paid out over a period of at least a couple of years, 409A could have had dramatic consequences if the full value of these deferred payments could be taxed in the year negotiated, not earned, potentially affecting tens of thousands of dollars, even hundreds of thousands, depending on the size of the contracts.

Those affected contracts were brought into compliance through language vetted by the NFL Management Council and the NFLPA to allow for the taxation of deferred guaranteed money in the year of receipt rather than in the year of negotiation of the contract. So the problem was solved, although not without additional headaches for players’ tax advisers. Link (http://www.nationalfootballpost.com/a-taxing-day-for-nfl-players.html)

Lucky
09-04-2013, 12:37 PM
That's enough on taxes in this thread.

steelbtexan
09-04-2013, 12:42 PM
Just cant get enough tax talk.

badboy
09-04-2013, 01:23 PM
Look Andre Johnson! You messed up the entire thread.

2012Champs
09-04-2013, 01:34 PM
Look Andre Johnson! You messed up the entire thread.



Thanks a lot Dre

drs23
09-04-2013, 04:11 PM
That's enough on taxes in this thread.

Thank you. :smooch:

Just cant get enough tax talk.

I CAN! :foottap:

thunderkyss
09-04-2013, 04:38 PM
That's enough on taxes in this thread.

But we're so close....

Playoffs
09-04-2013, 05:19 PM
That's enough on taxes in this thread.

Yep, let's get back to the disgusting immoral act (http://www.texanstalk.com/forums/showthread.php?p=2202110#post2202110). http://emoticoner.com/files/emoticons/smiley_faces/disgust1-smiley-face.gif

EllisUnit
09-04-2013, 05:31 PM
Just cant get enough tax talk.

No dont stop this is so much fun, damn i cant wait until tax time so i can talk to those exciting people at H&R block about this exciting subject, where uncle sam often makes me bend over and take his size 12. Tons of fun, let me tell ya