Expand mobile version menu
  Skip to main content

Real-Life Activities

Real-Life Math -- Solution

You realize figuring out how many goals and assists your player will score is a bit of a guess, not to mention estimating how the Rangers will do in the playoffs. Still, you need some figures to go on. You know you negotiated a good contract, but your client wants to hear it in more concrete terms. In other words:

"How much money am I going to make?"

Because of your sharp negotiating skills, you're starting with a base salary and signing bonus totaling $525,000.

The rest, you feel, is up to your client. The better he plays, the better you both do. Based on how he played last year, he should be able to earn some bonus cash for his performance.

Goals:

10 x $1,000 = $10,000
10 x $2,000 = $20,000
3 x $6,000 = $18,000

Total is $48,000 in bonuses for goals.

Assists:

33 x $1,000 = $33,000

Total is $33,000 in bonuses for assists.

Playoffs:

Round one = $5,000
Round two = $10,000

Total is $15,000 for playoff bonuses.

Total:

$525,000 in base salary and signing bonus
$48,000 in goal scoring bonuses
$33,000 in assist scoring bonuses
$15,000 in playoffs

Total $621,000 in gross earnings.

It looks great right now, but there's still that matter of the tax. You make a note to yourself to help him come up with a better tax strategy.

Tax:

$621,000 x 0.07 = $43,470
$621,000 - $43,470 = $577,530

Your player will have a net salary of $577,530 his first year. You just hope he comes through with those goals!

You need a head for figures in this business.

"You don't need really advanced math skills but what you have, you have to be able to deal with quickly," says sports agent Brendan Neil. "For instance, if you're in the middle of a negotiation, you can't take the time to pull out a calculator and figure out what a 5 percent bonus is on $1.8 million from a player. You have to be able to think that through real quick."


Contact

  • Email Support

  • 1-800-GO-TO-XAP (1-800-468-6927)
    From outside the U.S., please call +1 (424) 750-3900

Support


Powered by XAP

OCAP believes that financial literacy and understanding the financial aid process are critical aspects of college planning and student success. OCAP staff who work with students, parents, educators and community partners in the areas of personal finance education, state and federal financial aid, and student loan management do not provide financial, investment, legal, and/or tax advice. This website and all information provided is for general educational purposes only, and is not intended to be construed as financial, investment, legal, and/or tax advice.