Details have emerged on the makeup of the 14-year, $500 million extension that Vladimir Guerrero Jr. and the Toronto Blue Jays agreed to earlier this week. And those details are surprising, for a number of reasons.
Per Ken Rosenthal and The Athletic, of the $500 million the Jays will pay Guerrero Jr. between now and 2039, a whopping $325 million of it will be paid as a signing bonus instead of as salary. The first $20 million signing bonus is set to be paid within 30 days, even though the contract doesn’t actually begin until 2026.
As Rosenthal detailed, there are two reasons why Guerrero would prefer to have $325 million of his deal paid out in a signing bonus rather than as salary. The first is that he lives in Florida, a state without income tax, and signing bonuses are paid to an athlete’s state of residence instead of where they perform their work. Professional athletes’ taxes, if you were not aware, basically require an accountant because of how many states they end up working in over the course of a year — the signing bonus allows Guerrero Jr. to be paid the actual value of the deal sans income tax for the vast majority of its $500 million total.
[Related: With Vladimir Guerrero Jr. extended, who’s left in 2026’s free agent class?]
The second reason has to do with the potential for any kind of work stoppage, be it via a lockout when the current collective bargaining agreement ends after the 2026 season, or due to some kind of league-wide disaster, like the pandemic-shortened 2020 season. Unlike a salary, a signing bonus is paid without being “contingent on the performance of services.” Meaning, games don’t need to actually be scheduled for Guerrero Jr. to receive these payments, whereas his salary payments are contingent on there being baseball.
While Rosenthal says it is “unclear” what benefit the Blue Jays receive from agreeing to this hefty stipulation, it might be as simple as it’s how the deal ended up getting done. Guerrero Jr. and the Jays had broken off negotiations back when spring training began, which was the first baseman’s deadline. The two sides kept working at it in the following months, however, and it’s entirely possible that Guerrero’s asking price dropped a bit in exchange for this guaranteed bit of security via signing bonus.
What remains unknown is how Canada itself feels about this news. As Sportsnet detailed in 2024, the Canada Revenue Agency has an ongoing court case against the Toronto Maple Leafs’ John Tavares, over a revised tax bill and a dispute about whether his signing bonus actually constitutes a signing bonus. That case was brought to court over a $15.25 million payment that was part of a nearly $71 million signing bonus. Guerrero Jr.’s signing bonus is considerably larger, but whether that will attract the attention of the Canadian government is unknown at this time.
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