James Shields will get less than $40M from his $75M contract after taxes

James Shields was officially introduced by the San Diego Padres on Wednesday, saying he’s happy to join a team that’s ready to win now and be close to his family’s Southern California home. 

California, though, it’s punching him in the pocketbook. Because of high state taxes (13.3 percent for top earners), Shields isn’t making anything near the $75 million contract he signed with the Padres. In fact, it’s almost half that, according to one estimate.

Shields is going to be a rich man for the foreseeable future, so this is no boo-hoo-look-at-the-poor-millionaire post. It’s just a deeper look into the money, a way we don’t always think about it. Fans often see the big number and think of the all cars it can buy, but we don’t necessarily think about things like agent fees and taxes. Fox Sports’ Ken Rosenthal did. He consulted a CPA who often works with athletes to figure out how much money Shields is really making:

Robert Raiola, a CPA with New York firm O’Connor Davies who specializes in helping athletes and entertainers, calculated what offers for Shields would have meant after taxes in the three different states. …

Raiola calculated agent fees as 5 percent of total salary. He assumed that Shields would reside in the state in which he played. And he also accounted for the Jock Tax that athletes pay on the road. In his deal with the Padres, Shields’ final net wages after taxes will be approximately $38.97 million.

Rosenthal’s piece also dissected what Shields could have made with the Miami Marlins and Chicago Cubs, teams that play in states with lower taxes. It’s safe to say his San Diego money doesn’t match up — and that doesn’t even include the cost of living in one the country’s most scenic areas.

Again, Shields has plenty of money. But he and his agent certainly weren’t as savvy as Max Scherzer, whose $210 million contract with the Washington Nationals is structured in a way that it might save him $20 million in taxes. 

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Mike Oz is an editor for Big League Stew on Yahoo Sports. Have a tip? Email him at [email protected] or follow him on Twitter! Follow @MikeOz