Upon signing a massive contract with the Boston Red Sox, it was reported soon after that a significant portion of Alex Bregman's money would be deferred. The deal, before deferrals, is for three years, $120 million, with opt outs.
Now, we know the amount: Half of Bregman's annual salary will be deferred, according to Bob Nightengale of USA Today. So he'll earn $20 million, with another $20 million deferred each year.
Alex Bregman will have $20 million of his $40 million annual salary deferred each year.
— Bob Nightengale (@BNightengale) February 15, 2025
A few days ago, ESPN's Buster Olney reported that the present value was to be valued at around $90 million over the three years. Using the current MLB luxury tax discount rate of 4.43%, that likely means the deferrals will be paid out over the three years following the end of the contract ($120 million over six years, compounded annually at 4.43%, resulting in a present value of $92.5 million).
So, while the Red Sox are thought to have offered $10 million more per year than any other remaining team, in present value their offer was about $30 million per year.
Deferrals are not new in baseball, but the scale at which teams are utilizing them is growing. Shohei Ohtani's huge contract is famously heavily deferred, which brings it from $700 million to a present value of more like $540 million. Bregman's contract is 50% deferred, Ohtani's is a whopping 97% deferred.
Deferrals allow teams to reduce their luxury tax bill, giving them greater flexibility to build competitive rosters around expensive players. For a team like the Red Sox, it helped them land a huge star, making them more competitive without having to handcuff their desire to keep adding more.
For players, it gives them security of earnings, potentially even securing cash flow beyond their playing years. For title-hungry stars, it also lets them play for teams that can compete from a place of financial leverage without having to give up as much of their own earnings.
Tigers president Scott Harris said the team made a, "competitive offer," to Bregman but did not indicate if it included deferrals or not.
Bregman is set to hold an introductory press conference with the Red Sox Sunday morning.
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This article was originally published on www.si.com as Alex Bregman's Contract Deferral Amount Revealed.
