The contract will carry through 2021, which will be Scherzer’s age-36 season for more than $180 million. This is less than the original $200 million demand for the former Tiger starter.
The Nationals were not thought to be a team with an interest in Scherzer. The team was trying to sign their young starter, Jordan Zimmerman, who now looks to become a free agent after this season.
Scherzer, 30, went 18-5, 3.15 ERA, 1.175 WHIP, 6.7 WAR in 2014, after a stellar 2013 campaign of 21-3, 2.90 ERA, 0.970 WHIP, 6.0 WAR. In his seven seasons, he has a career 24.0 WAR (3.43 average WAR/year).
The Nationals now have the strongest starting rotation in baseball. Stephen Strasburg, Zimmerman, Gio Gonzalez, Doug Fister and Scherzer are quite a powerhouse of #1 and #2 starters. The signing also bumps promising youngster Tanner Roark from the rotation.
Perhaps the move was signaled by last week's trade of Tyler Clippard (and his large salary for a relief pitcher).
There is some thoughts out of D.C. that the Nationals will now trade Zimmerman, who is in his walk year, for prospects.
UPDATE:
$210 million is the new figure for the contract that has provisions that take
advantage of District tax laws to save Scherzer money and keep the
team’s present-day payments down via historic deferrals, according to Yahoo Sports.
Scherzer will get $15 million a year for the
next 14 years, sources said, deferring half the money until after the
contract expires. It is by far the largest sum ever deferred in a deal,
not quite matching Bobby Bonilla’s 25-year deferral from the Mets in
length but more than tripling it in value.
To make up for the loss with the deferrals – because of inflation and lost interest-earning opportunity, future money is worth less than present – Scherzer will receive $50 million in the form of a signing bonus spread over multiple years, the source said. The benefit to structuring the contract as such is that because his permanent residence is outside the District, Scherzer will not be subject to a state income tax on money earned in Washington, D.C.
The Home Rule Act, established
in 1973, exempts nonresidents from paying state income taxes at the
capital’s 8.5 percent rate. In practice, it means Scherzer would save
more than $4.25 million of the $50 million bonus he’ll receive in
Washington, D.C. – though just how much of that would be subject to tax
elsewhere depends on the state in which he earns the money and where he
resides.
Additionally, none of the $105 million in deferred money would
be subject to state taxes, potentially saving Scherzer another $8.92
million. All told, the lack of state income tax in D.C., when compared
to playing in tax-heavy states, could save Scherzer eight figures. One
source said the tax advantages could end up at more than $20 million,
offsetting much of the money lost via deferrals.
