There are significant California tax benefits to the deferred money, as since it is 10 years later, assuming he moves out of California, he won't have to pay state taxes on it. Otherwise I think your analysis is spot on
the note about ohtani's deferred money being irresponsible is silly. he wouldn't have been choosing between $70M today and $70M a decade from now; he had a choice between $70M a decade from now and the present value of that money. (that the dodgers can field a better team during his contract is also worth something to ohtani.) the point is that the expected value of an index fund or whatever other discount rate you'd want to apply to the ten-year deferral is baked into the $70M figure. the blog doesn't depend on this claim, but IMO it signals that you aren't self-editing (or being edited) critically enough.
Also, Ohtani is TREMENDOUSLY private. Which is his right of course. But we can't act like we know the guy, for better or worse. We assume he's not gambling in large part because he's so talented and pleasant and joyful on the field.
I mean, I guess they are all plausible, but if I had to handicap them, I'd say it's probably 40-50-10 in terms of plausibility. They don't seem equally plausible.
My reason for skepticism on the last one is that it just seems incredibly unlikely that this guy would want to take the fall for him for what's looking like at least a few years in prison. He's got a wife and young kid. I know there's the potential for a lot of money, but if it really was the case, that story is going to get blown up and you aren't going to get that money or it's going to be so convoluted that it's never going to be worth it.
Thanks Nate. Your column reflects my questions and thoughts. What I appreciate about this piece is your lack of advocacy. You provide information and extrapolate to potential different meanings. I am willing to pay for data, expertise, and analysis. If I have access to data, expertise and analysis, if it’s a topic I care about, I can formulate an opinion. Thank you for respecting me enough to not tell me what is truth or what I must believe or think.
"But I have to tell you: the very wealthy people I know are all over the place in terms of their financial hygiene, from having a high level of fastidiousness to being downright sloppy or unconcerned."
I would imagine that rich people who made their money in business or investing would be on the more fastidious end, because the same skills that make you good at running a business would make you careful with your own money. Athletes (and heirs) make money for reasons having nothing to do with their own financial acumen and it would not surprise me if many are toward the sloppy end.
Good points here made on several fronts. In my own piece, I underrated the idea of banks having fewer compliance policies for wealthy individuals and Ohtani turning over his finances to his interpreter. I'm glad, too, you took on the media angle and didn't underrate the possibility of Ohtani gambling himself. Sports journalism has a worse "access" problem than political journalism. In politics, of course, reporters try to protect sources and trade access for softer coverage. But the problem strikes me as much worse in sports because athletes aren't on the taxpayer dole and don't have nearly the same obligation to interact with journalists at all.
I don't think it's an exaggeration to say Ohtani is the *least known* superstar in modern times. It's not a cultural thing - we knew a fair amount about Ichiro and Matsui, two very colorful and quirky big leaguers who interacted with media quite a bit. Baseball reporters don't want to anger their sources in MLB by going too hard on Ohtani and they are also deeply reverent of him because, as MLB's golden goose, he's also their own. Their jobs, in some form, depend on Ohtani's great success and baseball's wealth/relevance. (Not true when covering politics.) You made the point well: we know nothing about Ohtani! He might be a degenerate gambler. He might not be. He is extremely talented, extremely competitive, and extremely rich. That's all we can go on right now.
Am I the only one who sees a level of hypocrisy in sport leagues encouraging betting and partnering with betting companies, but drawing the line at illegal bookies? Yes bookies are against the law but we all know of people who used them. And it’s because for some unfathomable reason California doesn’t permit online sports betting. If bets weren’t placed on baseball games, then I don’t see what the hysteria is. However if the opposite is true then yes, this is the biggest scandal of our generation.
Interesting, well done post. Of course it seems #2 is most likely, as they went out and said it originally, but the Occam argument for #3 is respectable.
My random reaction to all of this - not so much moralizing about gambling, per se - but how ridiculous is it that pro athletes can bet on other pro sports, when they often have unique, close ties to other pro athletes, which gives a built-in unfair advantage (as the line by the great columnist goes “Everything is insider trading.”)
This points to the absurdity of pro sports being heavily, heavily “invested” in gambling and pretending they can keep a lid on it from getting in the way of the integrity of their sports, at least in perception.
As a fan, I have not concluded that various games are fixed or skullduggery is present, but I am dumbfounded by the greed/desire for success (pick your euphemistic level) of sports leagues just jumping on board with gambling with such extreme prejudice.
Maybe the integrity of pro sports is not immediately at risk, but it doesn’t seem like this dynamic will end well.
In regards to how it's being reported. There was zero mention of Michigan actively cheating during the season during the national championship game. Jim Harbaugh becomes an NFL coach with no mention of his cheating during his college tenure.
The sports networks are not interested in stories that make viewers question the authenticity of the sport.
This is how I thought a gambling scandal would happen -- someone in an athlete's (or coach's or offical's) circle got in debt with a gambler, and the athlete got ensared.
Now, in Ohtnani's case, because he is financially solvent, the consequence is that he wired some money to a sportsbook.
But imagine if it was an athlete whose finances weren't quite so secure (and we know that lots of athletes are not in as good financial shape as one might expect for someone making their salaries). Or a first-year umpire. Then this is a huge door to them being pressured to shave points or fix games.
That's why I was unmoved by the Voulgaris take (which I also heard from Bill Simmons this morning) that it's unlikely a bookie would extend Mizuhara that much credit. *Of course*, if someone is that much in an elite athlete's circle, the debt would be paid one way or another, particularly for an illegal bookmaker.
Maybe legalization mitigates this, as big sports book businesses probably won't take positions on outcomes, and wouldn't risk being involved in a scandal.
Enjoyed the conversation and the layout of how all three scenarios are very plausible.
The only discussion that i think is missing that's VERY important concerning Ohtani (regardless of which scenario is true) is whether or not he might have committed wire fraud.
From what I've gathered, even if his wire was to payoff a friend's debt, because it was made to an illegal sports book, it could be a felony crime made by Ohtani. My running theory is that's why his attorneys were so quick to heel turn on their statements and claim the wires were made without his authorization.
I don’t think it’s Ohtani because I don’t want it to be true.
There are significant California tax benefits to the deferred money, as since it is 10 years later, assuming he moves out of California, he won't have to pay state taxes on it. Otherwise I think your analysis is spot on
I think the guy needs to be nicknamed "Shoeless Sho" Ohtani.
This post was more interesting before I learned that a bookmaker does not make books
the note about ohtani's deferred money being irresponsible is silly. he wouldn't have been choosing between $70M today and $70M a decade from now; he had a choice between $70M a decade from now and the present value of that money. (that the dodgers can field a better team during his contract is also worth something to ohtani.) the point is that the expected value of an index fund or whatever other discount rate you'd want to apply to the ten-year deferral is baked into the $70M figure. the blog doesn't depend on this claim, but IMO it signals that you aren't self-editing (or being edited) critically enough.
Also, Ohtani is TREMENDOUSLY private. Which is his right of course. But we can't act like we know the guy, for better or worse. We assume he's not gambling in large part because he's so talented and pleasant and joyful on the field.
I mean, I guess they are all plausible, but if I had to handicap them, I'd say it's probably 40-50-10 in terms of plausibility. They don't seem equally plausible.
My reason for skepticism on the last one is that it just seems incredibly unlikely that this guy would want to take the fall for him for what's looking like at least a few years in prison. He's got a wife and young kid. I know there's the potential for a lot of money, but if it really was the case, that story is going to get blown up and you aren't going to get that money or it's going to be so convoluted that it's never going to be worth it.
Thanks Nate. Your column reflects my questions and thoughts. What I appreciate about this piece is your lack of advocacy. You provide information and extrapolate to potential different meanings. I am willing to pay for data, expertise, and analysis. If I have access to data, expertise and analysis, if it’s a topic I care about, I can formulate an opinion. Thank you for respecting me enough to not tell me what is truth or what I must believe or think.
"But I have to tell you: the very wealthy people I know are all over the place in terms of their financial hygiene, from having a high level of fastidiousness to being downright sloppy or unconcerned."
I would imagine that rich people who made their money in business or investing would be on the more fastidious end, because the same skills that make you good at running a business would make you careful with your own money. Athletes (and heirs) make money for reasons having nothing to do with their own financial acumen and it would not surprise me if many are toward the sloppy end.
Good points here made on several fronts. In my own piece, I underrated the idea of banks having fewer compliance policies for wealthy individuals and Ohtani turning over his finances to his interpreter. I'm glad, too, you took on the media angle and didn't underrate the possibility of Ohtani gambling himself. Sports journalism has a worse "access" problem than political journalism. In politics, of course, reporters try to protect sources and trade access for softer coverage. But the problem strikes me as much worse in sports because athletes aren't on the taxpayer dole and don't have nearly the same obligation to interact with journalists at all.
I don't think it's an exaggeration to say Ohtani is the *least known* superstar in modern times. It's not a cultural thing - we knew a fair amount about Ichiro and Matsui, two very colorful and quirky big leaguers who interacted with media quite a bit. Baseball reporters don't want to anger their sources in MLB by going too hard on Ohtani and they are also deeply reverent of him because, as MLB's golden goose, he's also their own. Their jobs, in some form, depend on Ohtani's great success and baseball's wealth/relevance. (Not true when covering politics.) You made the point well: we know nothing about Ohtani! He might be a degenerate gambler. He might not be. He is extremely talented, extremely competitive, and extremely rich. That's all we can go on right now.
Am I the only one who sees a level of hypocrisy in sport leagues encouraging betting and partnering with betting companies, but drawing the line at illegal bookies? Yes bookies are against the law but we all know of people who used them. And it’s because for some unfathomable reason California doesn’t permit online sports betting. If bets weren’t placed on baseball games, then I don’t see what the hysteria is. However if the opposite is true then yes, this is the biggest scandal of our generation.
Interesting, well done post. Of course it seems #2 is most likely, as they went out and said it originally, but the Occam argument for #3 is respectable.
My random reaction to all of this - not so much moralizing about gambling, per se - but how ridiculous is it that pro athletes can bet on other pro sports, when they often have unique, close ties to other pro athletes, which gives a built-in unfair advantage (as the line by the great columnist goes “Everything is insider trading.”)
This points to the absurdity of pro sports being heavily, heavily “invested” in gambling and pretending they can keep a lid on it from getting in the way of the integrity of their sports, at least in perception.
As a fan, I have not concluded that various games are fixed or skullduggery is present, but I am dumbfounded by the greed/desire for success (pick your euphemistic level) of sports leagues just jumping on board with gambling with such extreme prejudice.
Maybe the integrity of pro sports is not immediately at risk, but it doesn’t seem like this dynamic will end well.
In regards to how it's being reported. There was zero mention of Michigan actively cheating during the season during the national championship game. Jim Harbaugh becomes an NFL coach with no mention of his cheating during his college tenure.
The sports networks are not interested in stories that make viewers question the authenticity of the sport.
Nate- why do other wise legit gamblers use illegal bookies, when they could use legal ones?
This is how I thought a gambling scandal would happen -- someone in an athlete's (or coach's or offical's) circle got in debt with a gambler, and the athlete got ensared.
Now, in Ohtnani's case, because he is financially solvent, the consequence is that he wired some money to a sportsbook.
But imagine if it was an athlete whose finances weren't quite so secure (and we know that lots of athletes are not in as good financial shape as one might expect for someone making their salaries). Or a first-year umpire. Then this is a huge door to them being pressured to shave points or fix games.
That's why I was unmoved by the Voulgaris take (which I also heard from Bill Simmons this morning) that it's unlikely a bookie would extend Mizuhara that much credit. *Of course*, if someone is that much in an elite athlete's circle, the debt would be paid one way or another, particularly for an illegal bookmaker.
Maybe legalization mitigates this, as big sports book businesses probably won't take positions on outcomes, and wouldn't risk being involved in a scandal.
Enjoyed the conversation and the layout of how all three scenarios are very plausible.
The only discussion that i think is missing that's VERY important concerning Ohtani (regardless of which scenario is true) is whether or not he might have committed wire fraud.
From what I've gathered, even if his wire was to payoff a friend's debt, because it was made to an illegal sports book, it could be a felony crime made by Ohtani. My running theory is that's why his attorneys were so quick to heel turn on their statements and claim the wires were made without his authorization.