How much did Colin Kaepernick actually receive from his “opting out” of the contract with the San Francisco Giants following the 2016 season and the recent Collective Bargaining Agreement, (CBA), with the NFL.[1]
In a recent interview between Kaepernick’s attorney, Mark Geragos and CNN’s Ana Cabrera, Geragos clarified that the disagreement was resolved through the CBA with a Confidentiality Agreement for a undisclosed amount with speculation between $20 Million and $100 Million. [2]
However, no one is saying anything about what the final amount was agreed upon. Lets put forth a few scenarios with the possibility that one could be close to the negotiating amount.
Here is what is known, the NFL possibly paid out somewhere between $20M to $100M to reach an agreement with Kaepernick. According to Mark Geragos, Colin Kaepernick was happy with the amount of the payment which suggests that the actual amount was closer to $100M.
Putting his home in San Jose on the market 2016 wasn’t the only move Colin Kaepernick made in 2016,[3] he also bought a $3.21 million condominium in the TriBeCa area of New York City, property records show. The purchase, which closed in July 2016, was made using the same trust that holds the Bay Area property. Kaepernick’s sister, Devon, is listed as the trustee.[4] https://www.latimes.com/business/realestate/hot-property/la-fi-hotprop-colin-kaepernick-ny-condo-20161202-story.html
Assuming that Kaepernick settled for about $80M as the civil damage for a tort, wherein courts can impose a liability of money damages.[5] Assuming further that the payment was made directly to Kaepernick, then the IRS will tax this $80M at its highest rate and possibly California or New York will also tax this $80M for a total tax of probably over 50% for both Federal and State taxes, possibly a bit higher than $40M. Then there are the attorney fees and cost that in a protracted legal context may run between 20% to 35% of the gross settlement. Assuming 25% or $20M., this leaves Kaepernick with $20M to both support himself for the 3 years he was without income from the NFL teams as well as financially promote his social causes which range from social justice to education[6] which may have cost him his quarterback position in San Francisco.
Planning: It may have been worth moving his domicile and tax residence to one of the states that has no income tax on its residents: Nevada, Texas, Florida, South Dakota, Washington, Alaska and Wyoming. Also, Tennessee and New Hampshire only tax its residents on income from investments and dividends! But still, there would be the IRS taxes to pay on this settlement.
Advanced Planning: Instead of Kaepernick receiving monies from the settlement, the NFL may have been inclined to make charitable donation to Kaepernick’s favored charities which would allow for all of the money to go directly to the charities and provide a donation for the NFL in which case all sides win; Kaepernick, the NFL and the charities.
More Advanced Planning: With the possibilities of the NFL making
contributions to charities, possibly the NFL or the charities could influence
the lawmakers at Federal and state levels to enact new legislation that would
benefit the ultimate purpose, people in need of social justice or education and
$80M would go a significant direction to immediately helping people in need.
[1] https://www.cbssports.com/nfl/news/colin-kaepernick-wins-early-battle-against-nfl-in-ongoing-collusion-case/
[2] https://www.cnn.com/videos/sports/2019/02/17/kaepernick-attorney-mark-geragos-predicts-nfl-contract-sot-nr-vpx.cnn
[3] https://www.nbcsports.com/bayarea/49ers/colin-kaepernick-explains-why-he-put-his-san-jose-house-sale
[4] https://www.latimes.com/business/realestate/hot-property/la-fi-hotprop-colin-kaepernick-ny-condo-20161202-story.html
[5] https://www.law.cornell.edu/wex/tort
[6] https://www.businessinsider.com/colin-kaepernick-donations-social-justice-charities-2018-9
