JULY 19: Despite the efforts from Williams’ camp to land a precedent-setting pact, Florio confirms the deal falls firmly in line with the standard rookie-scale structure. Even the matter of offset language is as expected based on typical rookie contracts. Moving on from Williams with term left on the deal would indeed leave the Bears in line for offsets, though team and player will of course hope such a situation does not arise.
This is a bit of a surprise as Joel Corry of CBS Sports notes that the Bears made such concessions on offsets for Mitchell Trubisky, whom the team drafted No. 2 overall in 2017, and Justin Fields, No. 11 overall in 2021. It’s not even like either of those situations came back to bite them as Trubisky played out the entirety of his rookie contract in Chicago and Fields, while no longer with the team, had his contract taken over by the Steelers when they acquired him via trade.
JULY 17: The Bears signed No. 1 overall draft pick Caleb Williams to his rookie contract today, and we’ve already reported on a number of intriguing negotiation tactics utilized by Williams throughout this process. These include the lack of an NFLPA-certified agent, opting instead for a “board of directors” approach, and the quarterback’s aim to secure a no-franchise tag clause in the deal. 
According to Mike Florio of NBC Sports, though, these weren’t the only tactics Williams pursued. After already trying to set new precedents with the no-franchise tag clause, Williams reportedly also attempted to break new ground on how his rookie salary will be taxed. Williams’ father has experience working in commercial real estate, providing his camp with unique insight into tax law.
One of the attempts employed by Williams’ camp reportedly tried to get Williams paid as an LLC. As a corporation, Williams would face different tax laws than those of an individual. While the league’s Collective Bargaining Agreement doesn’t appear to have any stipulations limiting this approach, the NFL ultimately made the overarching call to deny Williams, telling the Bears that a player’s money can’t go to a business entity other than the individual.
A second approach saw Williams attempt to model his rookie contract payments after a forgivable loan. In this scenario, Williams could have received the money tax-free until the loan was forgiven in as many as 10 years. Once again, through the league’s advice, Chicago ultimately turned down this option, as well.
Other rumors suggest a situation in which the contract would’ve included “language that will void future guarantees,” bringing up questions of whether or not the Bears would be entitled to receive an offset should they release Williams with guaranteed money remaining and he signs with a new team.
Credit where credit is due, Williams and his crew were extremely creative in their attempts to maximize the value of Williams’ new source of income. The Bears appeared to be willing to play ball but were time and again blocked by the league. While unsuccessful in these attempts, Williams may have opened the door for future first-round picks to have more grounds for negotiation in their rookie contracts.
Dude is gonna be a bust, good for him for trying
Seriously, I can’t remember the last time there was someone this hyped, not a chance he lives up to it
wait till you guys hear about Deion’s kid
I think he has been raised to understand what he needs to do.
doesn’t mean he can lol
doesn’t mean he can
So you don’t watch college football.
He’s almost at the point where so many people are saying he’ll be a bust that I don’t think he will be. We’ll see. I like the Bears as a franchise so I’m hoping they can find success
Well, I‘m sure that many would understand why Williams doesn’t want to pay his taxes. I’m sure that they and others who are making less would appreciate that opportunity.
Tell your boss you’re an LLC apparently. Can’t knock it til you try it
Apparently these days you can identify as whatever you want. That being said, if this guy wants to be an LLC, then I guess that’s what he is. Tomorrow I’m going to identify as a billionaire and go make a substantial withdrawal at the bank. Then the next day I’m going to identify as the owner of the car dealership down the road and give everyone a new car. I like this new system of identity!!!!
In all seriousness, the shadiness stemming from his fathers advice from the business world makes me wonder what they’d find if the went back through his business transactions. Sounds like somebody has already been walking a fine line on tax laws. Also curious if Junior paid his fair share on his NIL earnings to date.
It really doesn’t make any sense. How does a career in commercial real estate teach you about taxes? I’m in residential real estate myself, and I can tell you I use a CPA company to handle my taxes.
Sounds like you are making huge assumptions.
Not shady at all. Just thinking outside the box and using the tax laws that are legally available. Just because you didn’t know or think of doing it or make such an income where it would advantageous doesn’t make it shady. Calling something shady that you don’t understand is shady.
Today you absolutely identify as a douchebag.
Please don’t reproduce
Should have been drafted by a team in California. You can put off the taxes there by deferring most of the money, say take a quarter of what you’re owed and defer the rest, then move out of California before you get the bulk of the money and you don’t pay California taxes on the deferred money. I believe with California and Federal taxes it adds up to 53% of your paycheck in his tax bracket. That’s why Ohtani only took 2 million a year when he’s making 50 million ( I think). Cali will never see the taxes on that 48 million in deferred money
Look, I don’t know where this guy gets the idea that NFL quarterbacks and high-draft pick legends in the making have a different set of rules for themselves than everyone else… wait…
Look I don’t know where you come off judging a kid trying to set his own precedent.
The NFL is an entertainment entity. Entertainers are public figures and as such are legitimately opening themselves up for judgement. Judgement is the source of their income.
If he had all this business acumen, he should’ve known to choose a career in an industry without a monopoly. Oh wait, he could’ve always tried his hand with the USXFL or w/e they’re calling it these days
Ridiculous comment
Aaron Rodgers 2.0
Good Luck
Aaron Rodgers is a Superbowl champion. So I’m fairly certain that the Bears would love that type of return on their investment.
You misspelled Ryan Leaf
Idiotic comparison to bring AR into this.
Rodgers ego maybe without any of the accolades. Otherwise the Bears would kill for him to be 1/10th the player Rodgers has been.
I’m certain Rodgers doesn’t sit to piss so not really a good comp
You’re an idiot. Don’t reproduce. World needs less of you.
I’m sure your mom is proud of you
I assume that a loan would require interest. So Williams would be paying 6% interest on the “loan” and still have to pay income tax when the loan was forgiven, even assuming that the IRS didn’t disqualify the transaction from the beginning?
Sounds like amateur hour.
Closer to 14% right now, but it’s still less than 37% tax. This is similar to how Bezos skirts paying tax. He converts assets to stock holdings, then leverages those for loans. He spends the cash, writes off the loan expenses, and pays off old loans with new loans and spends more cash. Dude legally has almost no income (or tax obligations) but can afford to build rockets to fly into space and sail on his 400′ mega yacht that’s bigger than some cruise ships.
Sounds like a pro move to me.
Of all of the posts that I’ve read on here, this may be the most informative. Thanks for the insight, and in the other post you made below.
and Bezos donates billions to politicians who will keep that system in place.
That “system” is the same system that most of us use.
Closer to 14% right now, but it’s still less than 37% tax.
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14% is indeed less than 37%, but it doesn’t replace the 37%. If it was possible, all you would be doing is deferring the $10M for four years, accruing $1.4M in interest every year, and then paying the 37% as soon as the loan is forgiven. I’m straight-lining this for discussion purposes, but you’d pay $1.4M * 4, plus 37% of $10M, and be left with $700,000 after four years.
IRT Bezos, his biggest tax advantage is that most of his wealth is in stock, and just like with us, the capital gains are not due until the stock is sold. And interest on personal loans are not deductible unless it is for a mortgage. Again, just like us.
Thanks for the additional.
I simplified his process in my comment because it’s quite convoluted. Bezos’ loans are lower prime-rates that we don’t qualify for, and instead of actually paying the loans back with cash, he defaults by design (written into the loan agreement) and essentially pays them back with the un-taxed assets that were used as collateral (more than the value of the loan, but less than the cost of just paying tax) and since loans aren’t taxed, he has little if any tax liabilities.
Then on top of this the bank or financier who provided the loan has the option of holding the surrendered assets and claiming the principal of the “unpaid” loan as a loss, all the way up until it’s eventually converted to cash or other assets.
Unfortunately this is all completely legal.
I again question some of this.
1-He gets better rates than us because he is a better credit risk.
2-“pays them back with the un-taxed assets”. Not sure what that means. If it means company stock, I presume the IRS would consider that capital gains based on the difference between his basis and the FMV at the time of the transaction.
3-I see no way that the lender claims any loss. If you owe me $10M, and you give me $10M in stock, we’re even.
If any of this was accurate, everyone in the country would be doing this.
1: True but also because these are massive loans and the collateral is like 110% (as an example) of the value of the loan, the rate doesn’t even really matter for this, I’ll explain why below.
2: It basically means any investment that is subject to capital gains tax is what he uses as collateral. Because he does not sell or liquidate his collateral asset (which exceeds the value of the loan), he does not pay tax on it at any point. He is defaulting on the loan (i.e. he doesn’t pay any of it back), the balance becomes due (these are short term cash loans), and the asset is then forfeited to or “seized” by the lender at a profit for them (example above is 110% of the value of the cash loan).
These loans are specifically designed to default in order to avoid taxation. They’re not like any type of loan any FDA bank offers to their customers; they’re only available to the mega wealthy, and from what I understand many of Bezos’ loans may even come from Amazon Corporation LLC subsidiaries (a private holdings company owned by Bezos and other early Amazon investors, NOT Amazon.com Inc. (AMZN), a publicly traded company that is subject to public disclosure requirements). But that is a whole other can of worms entirely.
Because the LLC is a private holdings company, all of this goes on behind closed doors, and none of it ever gets publicly disclosed because it’s not a requirement for private equity companies to disclose much of anything.
3: The long and the short of it is, the financier or bank that issued the cash loan is 100% eligible to claim the loan principal as a debt which is 100% deductible for them. Because it is cash it has a defined value (whatever the cash amount was is the deductible amount). So if the cash loan doesn’t get repaid in cash, it’s now a debt that they can deduct from other taxes owed.
Let’s say the loan was for $10MM cash. They obtained/acquired/seized/collected $11MM in assets when the loan defaulted (if the collateral for the loan was 110%). Ok, so the financier or bank made a profit of $1MM that should be taxed as a profit, and they reclaimed their initial $10MM loan principal which should exclude it from being used as a deduction; BUT if they don’t convert the assets they “seized” into cash, they are still not subject to tax.
Essentially the financier has purchased $11MM of stocks (or whatever) but only paid $10MM cash. Now the principal of the $10MM cash loan is deductible because it was the principal of a loan, and because they got $0 CASH returned from the loan, they not only don’t owe tax on the $1MM profit, they get to deduct $10MM from their other tax obligations.
All of this is basically a convoluted in-kind transfer (which is basically the un-taxed transfer of assets from one of your own accounts to another of your accounts) except instead of transferring their assets to another account they own, they do this to transfer the assets un-taxed to other entities, while also having the opportunity to use the transfer as a massive deduction.
And sadly, this is only one of the many ways the mega wealthy continue to kick the tax can down the road, accumulating more wealth without the burden of taxation, year after year after year. So, yea, anyone who can afford the legal teams to do all of this hoop jumping, and has the asset portfolio to make it worthwhile, pretty much is doing it.
BUT if they don’t convert the assets they “seized” into cash, they are still not subject to tax.
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I’d like to see the IRS code on this. So far as I know, if you give me an asset worth $11M, to satisfy a $10M debt, the IRS will consider this to be $1M in income.
If that wasn’t the case, everyone in the world would be paying off debt with appreciated assets. Every house purchase would be made with Apple stock.
Credit where it’s due but he certainly comes off as a tool for all this attempted finagling.
How does trying to maximize his earnings come off as a tool? Genuinely curious.
Because other people, who are making much less, have to pay their taxes or face consequences. Williams will be making more than any average person will see in their lives, and wants to avoid paying taxes that he can certainly afford by using an avenue that normal people will never practically be able to use. It gives the impression that Williams perceives himself as being above other people, many of whom perform much more thankless jobs at higher risk for lower pay. It’s pretty easy to see why people wouldn’t like this.
As to my own opinion, I don’t resent the rich for simply being rich, because I don’t tend to resent people and making money is not sinful or evil. I do not think that Williams is a jerk, because I do not know him and it’s impossible to speak about his character. I do think that it does show some level of exceptionalism in using a definition that is not what it’s meant to apply to, so I do have an issue with his actions here. Well, I don’t blame for disliking losing his income to taxes, but read the room. People across the country are struggling en masse, and you’re trying to avoid taxes on a multi-million dollar income. To me, it seems rather callous at worst and self-centered as best. I won’t knock him for exploring an idea, I’ll give him that, but it sounds like there were a few concerted efforts to simply avoid that responsibility. If people are businesses, that opens a realm of possibilities that certainly are not positive. Williams should be subject to the same obligations as anyone else, and though I don’t consider this an indictment on him as a whole, this individual incident is not something that I enjoy hearing. Just my thoughts.
We might be giving the kid too much credit here. I got the impression his father was behind all of it. Yeah, the younger had NIL deals, but what experience with tax laws, let alone negotiations, does he really have at 22 y.o.?? Definitely BOLD moves, but maybe not that “smart” considering his employer. The NFL makes the rules and the rules are made so they rarely (if ever) lose.
These seem like red flags of the “I’m smarter than you” variety but maybe he (or his father) is just an opportunist when it comes to money. Or has huge balls.
Very well stated, Ak185.
That’s the way the world works in case you weren’t aware. The people with the money typically don’t pay the taxes. They hide assets. They under value them. It’s LIFE. Now, the fact a 20- something year old has his mind set on that? Impressive. And guess what, he IS above other people. He was just selected first of 250 something great athletes. He has a REASON to think that way. People may not like it, but it’s warranted. God may have created all equal, but society has placed some above others. Whether we like it or not.
Isn’t the entire issue at hand whether or not someone “likes it”? Nobody is arguing whether or not the world is or isn’t some certain way, so I’m not sure at whom this lecture is directed. If you like, though, I do have an answer.
If you like to consider a first overall pick some kind of overlord of exclusivity, that is your own personal justification. Most people, I would wager, don’t see it that way. I acknowledge, and I think that any other sand person would as well, that Williams has an exclusive talent at a lucrative activity that a lot of people are highly interested in. However, that talent is not exactly essential. If Williams disappears tomorrow, the overall effect on human society, other than the feelings of his relatives, is nearly zero. If Williams became a janitor tomorrow, there aren’t any peoples’ lives that could be in danger, nor would any food cease becoming available, nor any software that would crash, nor any transportation that would halt. Any service that remotely resembles something essential would go on. Services that aren’t even absolutely essential, but still productive in some sense (most peoples’ jobs fall into this category) would go on.
So, as exclusive as Williams’ talent is at doing something lucrative that we all enjoy watching, it is not essential in any remote way. There is no reason to enable Williams to do it at the expense of others, or in ways that grant him privileges that “lower” citizens don’t have. There are many people that “society has placed” lower than Williams (using “society” as an excuse is rather pedantic-WE are society, after all, it isn’t a conscious malevolent being with its own will; it is made up of us and our opinions, so using it as a conscious entity to blame is a cop out) who most people would argue have a more urgent case to keep their considerably lower amount of money than Williams does. Williams has an exclusive and enviable skillset, yes, and that’s why he is compensated insanely well for it. He doesn’t deserve any extra privileges over the supposedly inferior everyday populace because of it.
The people with the money typically don’t pay the taxes. They hide assets. They under value them.
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That’s pretty much 100% incorrect.
1-The rich pay most of the taxes in this country.
2-How does one hide assets (assuming that you are not a criminal)? The government is either aware, or can find out, almost every nickel and dime you spend. If you’re a street vendor or a contractor, you can hide away a few dollars, but then you are likely not in a high tax bracket. But every salary and every stock transaction is 100% traceable.
3-You can’t under-value assets for the same reason. The government knows exactly what your bank account, and your 401k, and your house and car are worth.
Hide was the wrong word, but they under value them 100%. Unless you missed the whole Trump case they will 100% attempt to prosecute for it (and 99% of the time fail).
Once again they know where OUR value is, but no one knows THEIRS and no one regulates theirs. Which is 100% how they get away with it. Which is how they don’t pay the correct taxes. But hey, believe everything your told….
Unless you missed the whole Trump case they will 100% attempt to prosecute for it (and 99% of the time fail).
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1-Trump is not overvaluing an asset for purposes of tax evasion. He used the property as collateral for a loan.
2-And of course the justice system will fail 99% of the time. That’s because this is a private transaction between two willing and knowledgeable partners. There was no attempt to defraud on either side. The banks have entire departments dedicated to the evaluation of loan collateral. This is not like you loaning your neighbor $20,000 with a car as collateral, only to find out they don’t have title.
3-Which is why these cases are never, ever prosecuted. Do you know how many people apply for loans, mortgages, etc., overstating the value of their assets? It’s probably millions of people.
I mean high seated politicians go into office with 80K job and 300K in loans but are worth 100M after 3-5 years in office.
That I agree with. Too many politicians sell access in exchange for booking fees. Is there even a single person on the entire planet that think Hunter Biden gets on the board of an energy company, with no knowledge of the industry and doesn’t even speak the language. It was done for access to the VP.
He comes off pretty smart in my book and way way ahead of the curve. People who are the first to try something revolutionary are usually pretty smart
The irony of the NFL working against one of its players wanting to pay as little tax as possible is humorous.
Or the audacity of somebody that hasn’t played a snap of professional football to think he and pops have figured out what thousands of paid professionals and their highly paid and experienced agents haven’t.
Or they just were one step ahead of the other thousands of paid professionals who don’t have the mental capacity to attempt this. I mean half of these guys can speak real English let alone negotiate a million dollar deal…
Or, just speculating here, some of what he wanted to do is likely illegal.
Does anyone in here, even one single person, take their salary as a loan?
Illegal? Probably.
Our government officials inside trade every day and that’s illegal.
Does anyone in here, even one single person, become multi-millionaires by just spontaneously cashing in their stocks at the perfect timing right before everything crashes??
The world isn’t fair and Caleb is smart for trying to beat the system. Something we all wish we could do.
Hahahahaha
Polish Hammer- New contractual precedents are set all the time in sports. A new one was just set by an MLB draft pick who hasn’t played an inning of professional ball. MLB fans don’t seem to care.
Why the players constantly get the ire of fans instead of the super rich owners who are unwilling to negotiate– most who only use the business as a way to make passive income and don’t actually care whether their team wins or loses unless it affects them monetarily–will always be baffling to me.
This is how a lot of entertainers get paid. Interesting to try for an athlete. 0% chance it was going to work, but you miss 100% of the shots you don’t take, I guess.
If he would have gotten paid as an LLC, he could have invested a big chunk into real estate development, skirted taxes for several years from expenses offsetting profits, then at the end of that before paying the piper, he could have set aside a portion of the land for “future development”, then used it for a land conservation easement (tax loophole) to wipe out all of the taxes that he kicked down the road for several years during the project development. Plus he could have turned $20-$30MM into significantly more than that depending on what kind of development project it was and where.
PSA look up the land conservation easement billionaire tax loophole, it’s a dirty tactic billionaires use to erase millions in unpaid taxes by just not developing a small section of land they set aside. It’s disgusting but brilliant.
I actually looked it up… gross.
8-Ball • 10 hours ago
If he would have gotten paid as an LLC, he could have invested a big chunk into real estate development,
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Just so I am not misunderstanding this, how does this differ from being a regular employee? If I register as an LLC, which I have considered, would I not be subject to personal income tax using the LLC as a pass-through? And then the remaining funds could then be invested in RE whether as an individual or an LLC.
There could be something I am missing, but aren’t LLC’s generally used to protect one’s personal property from being seized in a lawsuit.
In the scenario described, the LLC would record the paycheck as income, but LLC’s aren’t taxed on income, they are taxed on profits, so after you invest the money and accrue “losses”, you have no income to pay taxes on.
Businesses can carry forward losses to offset future profits, and vice versa, so a lot more flexibility as a business. Can also write off items such as depreciation, which an individual cant do.
And how does one accrue losses, other than by losing money? And if that was the case, then how would losing money profit you?
There is accrual based accounting where you can set aside money for expenses i.e. bad debt. Accounting is a bit of an art not a science in the real world.
Also, depreciation (loss of value of an asset) is a non-cash charge. For instance, if you buy a truck for 100k, you can depreciate the vehicle over 5 years. Each year the truck is worth 20k less (straight line depreciation) so you have a 20k loss, but you didnt spend any money… that is one example of how you can have “losses” without an actual loss.
Bad debts are based on actual losses. If you have $1M due from Apple, you cannot put up a 50% reserve just to lower your taxes.
And the $20k annual loss on your truck is a real loss. Try it for yourself. Buy a $100k truck, drive it 20,000 miles in the first year, and ask the truck dealer how much he will pay you for it, And I am pretty sure it will be about $80,000.
There is an actual science to what I do for a living. As much as I’d like to, I cannot create losses for my employer that do not exist. I have auditors and tax managers to answer to.
The NFL could never allow this LLC thing to happen and it has zero to do with taxes. Once you open that can of worms you have the potential for teams to pay players in indirect ways that circumvent the salary cap. The NFL would need a giant team of accountants and tax attorneys whose only job is to audit players every day.
A for effort, but the rookie contracts are pretty set. Bosa tried to do things different, Marvin Harrison this year, and Williams but it never matters. The days are gone when the rookie contracts could become highest paid or messed around with.
Every time an owner tries to save a dime there’s a legion of fanboys saying how it’s good business but when a player tries to do it they’re a diva or a tool
Except those owners are billionaire businessmen, and usually tools too, and not some kid who thinks he and his dad figured out the secret formula.
Usually the secret formulas are secret because they don’t work. I think Wesley Snipes is still trying to untangle his secret formulas.
Snipes forgot to regularly have the right politicos over for dinner, sit on boards with them and donate regularly to their campaign funds.
Most of the billionaires didn’t forget. Different social world.
Paying less taxes due to loopholes and just ignoring the taxman because you are a “sovereign citizen” are not the same.
Sure, but people are always, always, always thinking they know some secret formulas.
They DON’T!
Lmao bears fans nervous now hahaha
Apparently the “board of directors” approach doesn’t work that well when it includes Curly, Moe and Larry.
This dude has been a diva since the day he got to USC. Cannot wait to watch him bust in this league!
Creating a legion of NFL fans cheering for whoever is playing the Bears that week. They have a lot of pieces (many rookies) but that doesn’t necessarily mean they’ll make it work.
And if he turns out to be great, you’ll have to move on to someone else to hate.
You could even say he’s been a diva since he was at Oklahoma
IRS has found their next victim
Next he’ll want his salary paid in the flavor of the day crypto and we’ll be told to feel sorry for him when it tanks.
I get you’re trying to make a bit of a joke but thats not a great comparison.
It wasn’t exactly a comp nor was it an attempt at a joke. It’s speaking to his thinking outside the box on payments and being smarter than anyone else before him.
Ok. I was giving you the benefit of the doubt. Your whole crypto comment makes no sense.
I get the sentiment but it was a bad example.
I think players have been paid in crypto before. But just like these other ideas, it makes no difference. You will be taxed on the value of the crypto at the time of the payment.
So he doesn’t want to pay his “fair share”?
You’re assuming any of us pay anything, accurately have or wealth taken before it’s even recieved.
Someone should be looking into his NIL deals. Can’t tell me this is the first time they came up with this idea
Honestly, who here blames him?
$39,486,058 fully guaranteed is a lot of money.
A rookie QB asking for a no-franchise tag clause in their contract is laughable. I think RB’s should have a no-franchise tag clause in their contracts but not number 1 overall QB’s.
A forgivable loan so he doesn’t have to pay taxes until he is fully paid the value of the contract seems illegal. I think the term is tax-evasion but I am not in real-estate so I could be wrong about this.
I mean, I hate that he thinks he can come in here and just to F-all, but I love the creativity and trying to set new boundaries.
I also hope he sucks because I hate the Bears.
Red flags abound. This guy is going to be a PITA for the Bears. For their sake, he better produce on the field.
Bust or no bust…thinking outside of the box
Creative? Sounds shady. Can you imagine if we all went to our employers and said we want to be paid as a corporation… for tax purposes.
It only makes sense for people who are making at least about mid six figures, but it’s not that uncommon to have a loan-out corporation in some fields.
Obviously the rookie deal aspects of the player agreement takes some options off the table, but I wonder if he could simply defer some of the actual payments until after he retires and moves to a less tax-happy state, ala Shohei Ohtani and Bobby Bonilla.
The kid has already made millions off of NIL money, at least someone is trying to protect future earnings and avoid unnecessary taxes. I’m amused by the bust comments, considering he just has to throw for 2,500+ yards and 16+ touchdowns to out do Fields. Pretty sure that’s doable.
He should get the IRS to force the NFL to file a W-8BEN. No taxes. 100% legal.
If he pulls this with a boilerplate rookie contract I can’t wait to read how extension talks go in 4 years
Jamarcus Russell 2.0
“Just pay me weekly w/bag o’ cash w/non-consecutive small bills after every game, leave it in my locker.”