Did the sunshine tax cost the San Francisco Giants their shot at Bryce Harper?
The 26-year-old former prized free agent agreed to a 13-year, $330 million deal with the Philadelphia Phillies on Thursday. It’s a record MLB deal in terms of overall money that’s also noteworthy in that it includes no opt-outs and has a full no-trade clause.
The Phillies were presumably the highest bidder among several teams reportedly interested in Harper’s services including the Chicago White Sox, Los Angeles Dodgers, San Diego Padres, San Francisco Giants and his former Washington Nationals.
What role did California taxes play in Harper’s decision?
A report from NBC Bay Area’s Alex Pavlocic suggests that there was indeed a bidding war for Harper’s services and that California state taxes may have played a role in the outcome.
I’m told Giants made a 12-year, $310 million offer to Bryce Harper. They were willing to go higher but would have had to go well over $330 million to get it done because of California taxes.
— Alex Pavlovic (@PavlovicNBCS) February 28, 2019
If Harper indeed made his decision based on the highest offer, the Giants were on the cusp of besting the Phillies in terms of up-front value. The average value of their reported 12-year offer ($25.83 million) is slightly more than what Harper got in Philadelphia ($25.38 million).
Offer in San Fran not what it is in Philly
The report that they were willing to go higher suggests that they would have been prepared to do better than 13 years, $330 million. But as the report notes, state taxes in California would have required the Giants to offer significantly more to compete in terms of money that actually ends up in Harper’s bank account.
A problem for Dodgers, Padres too
If this was an issue for the Giants, then it was obviously an issue as well for the Dodgers and the Padres, who were competing under the same constraints of the relatively high state tax in California.
For Harper, it appears that money truly was the bottom line in his free agency decision — far from a surprise considering he’s a Scott Boras client.
Even if he preferred California as a destination, cost of living proved to be prohibitive to reach his goal of maximum value. Though on a much larger scale, it’s a compromise that many of those who live in California or have considered moving there have had to consider.
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