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."