The signing press conference was scheduled for April 2nd, intentionally avoiding April Fools’ Day on the 1st, just in case anyone thought they were joking.
"—but we’re not," John Mara bood over the phone. "We’re dead serious this ti."
Don Quixote, weary from his travels, also rushed back. He had spent the entire month of March diligently handling various procedures for Li Wei and preparing all the necessary docunts for tax sheltering.
Back at their ho in Battery City Park, Don Quixote slapped his briefcase down on the coffee table with a dull thud.
"Where’s Lily?" he asked, his first thought upon returning ho being of his daughter. "I haven’t seen her in a week. Did she miss ?"
Li Wei poured him a glass of water and sat down across from him. "She’s at a friend’s house."
"Oh, alright," Don Quixote said, scratching his head as he opened his briefcase. "Well then, let’s get started. My boy, welco to the big leagues of capitalism."
"Is this what you were doing in Delaware?" Li Wei asked, watching him pull out a thick stack of docunts and lay them out in organized piles before him.
"Correct. First, the matter of your legal identity," Don Quixote said, pointing to the first docunt, which bore a gilt wax seal. "Go ahead and sign, Mr. CEO. As of today, you’re not just a high school student or a future pro athlete. You are the owner of Horizon Holding Company Limited."
"This company is registered in Delaware, sa process as I used with Susan last ti (Chapter 49)," Don Quixote explained. "Their legal system is the most robust, but the main reason is their unique corporate law. It offers maximum protection for shareholder privacy. No one will be able to easily figure out that you’re the one behind it."
Before Li Wei could take a closer look, Don Quixote pulled out a second docunt covered in complex employnt clauses. "This is what I’ve been working on all week. It’s the loan-out company’s certification and your employnt agreent."
"Simply put, the Giants and any future endorsents won’t be signing a contract with you, ’Li Wei’ the individual. They’ll be signing with ’Horizon Holding,’ the company," he explained. "The company then ’loans you out’ as an employee to work for them. The money goes onto the company’s books, and the company covers all your expenses: food, housing, training equipnt... even a private jet, if you decide to buy one later. It all gets counted as a corporate operating cost."
"So this is the famous tax sheltering strategy?" Li Wei blinked. He’d heard about the ways rich people avoided taxes, but now that it was happening to him, he was realizing just how many twists and turns were involved.
"Exactly!" Don Quixote said. "This is how it’s done in the United States of Arica."
"How much tax will this save ?" Li Wei asked. "Can I avoid them completely?"
"Not a chance," Don Quixote said, shaking his head. "Not even if you were God himself."
"In the United States of Arica, only two things in life are certain: death and taxes," he said, holding up two fingers and grinding his teeth. "Even if God himself showed up, the Internal Revenue Service would take a cut of his appearance fee for federal taxes."
He cleared his throat, took out a pen, and on the back of a docunt, wrote down a figure: 50–53%.
"Federal tax, New York state tax, New York City tax, dicare, and Social Security tax..." he listed. "You saw it with the Giants’ signing bonus. That 5 million USD beca just over 2.3 million by the ti it hit your account."
Li Wei nodded. That tax paynt was, without a doubt, the most painful expense of his entire life.
"But now," Don Quixote continued, "once all of these beco corporate expenditures, the nature of the ga changes entirely."
"Companies are taxed on profit, not revenue," he said, pointing to the Cadillac Escalade outside. "Take the car John Mara gave you. If we were to purchase that car under the company’s na and classify it as a business vehicle, it would beco a corporate operating cost—a 200,000 USD expense."
Li Wei was starting to understand the standard tax-sheltering playbook of the wealthy in the United States of Arica.
"So you’re saying that if I buy a house, hire staff, or buy clothes, it can all be counted as a cost?" Li Wei asked. "And as long as the money is spent, it doesn’t count as profit?"
"That’s right," Don Quixote said. "As long as we spend the money on the company’s books through these ’legitimate’ channels before filing taxes at year-end, we can drive the paper profits down, maybe even to zero—"
"So on paper, I’d be a pauper?" Li Wei asked. "Even though I’m the one actually using everything."
"Bingo! That’s the idea," Don Quixote said with a snap of his fingers. "But I need to give you a word of caution. You know that a lot of athletes go bankrupt, right?"
"John Mara told about it. I’ve seen a docuntary on the subject," Li Wei nodded.
"Right. Because so expenses are tax-deductible, but only if they are ’reasonable and necessary’ for the business to make money," Don Quixote explained, giving an example. "For instance, chartering a private jet to get you to away gas quickly. Since you, as an employee, are generating revenue for the company, that counts as a legitimate business expense and is tax-deductible."
"But if you use company money to buy a Ferrari and claim it’s for your commute, the Internal Revenue Service won’t buy it," he said. "You could just as easily take a taxi or your Cadillac Escalade—which, being over 6,000 pounds, qualifies as a work vehicle. Likewise, training gear and equipnt are fine, but designer suits and jewelry are not."
"So that’s why all those celebrities and athletes—" Li Wei said, the realization dawning on him.
"Exactly. Taxes and tax sheltering are incredibly complex subjects," Don Quixote said, tapping his temple. "Very few people can navigate all the intricacies. Fortunately, I’m one of them."
"There you go, showing off again," Li Wei laughed. "Guess it’s true what they say: having an elder around is like having a treasure."
"What’s that nonsense?" Don Quixote asked, not understanding the literal proverb. "A lot of celebrities and athletes get fleeced by their accountants or agents. They spend tens of millions living it up, only to find out at tax ti that they owe the Internal Revenue Service twenty or thirty million USD. They go bankrupt on the spot. After divorce, it’s the second leading cause of bankruptcy for athletes."
"I get it," Li Wei nodded. "So that’s why so many billionaires, who are obviously worth a fortune, always claim to take a salary of just one dollar a year."
"Precisely," Don Quixote nodded. "On another note, I’ve already received a few endorsent offers for you."
"Already?" Li Wei was surprised. "I thought we’d have to wait until after the official announcent to get any endorsent deals."
"So people always have their sources," Don Quixote said. "They must have gotten a tip from soone high up in the Giants’ organization. I’ve already filtered them down. We have three solid offers left."
"Which three?" Li Wei asked, carefully examining the contract Don Quixote handed him. "Is this the first one? Fanatics, for trading cards?"
With Don Quixote’s explanation, Li Wei understood what they were—officially licensed pieces of cardboard printed with his face and na.
"They cost less than five cents to make," Don Quixote explained, gesturing with his hands. "But if one has your autograph, or a small patch of a jersey you wore in a ga, its price on the secondary market can rocket to thousands, tens of thousands, or even a hundred thousand USD."
’Is this what it ans to be famous?’ For the first ti, Li Wei had the tangible sense that he was truly becoming a big deal.
"They want to sign you now—and by the way, it’s a good thing you didn’t sell your na and likeness rights (Chapter 86)," Don Quixote added as an afterthought. "Otherwise, that White Agent would be the one negotiating with their boss, Michael Rubin."
"So, what’s the offer from Fanatics, this company that specializes in trading cards and collectibles?" Li Wei asked, flipping through the contract with interest. "Last ti, White offered 100,000 USD for my na and likeness."
"That was an insult. Not even enough to feed the gulls in Seattle," Don Quixote scoffed. "This is for one year. You sign 1,000 cards, and you get a two-million-dollar signing fee, paid directly."
"One thousand cards," Li Wei said, amazed. "Is my signature really worth that much? No wonder all my classmates were asking for my autograph."
"Bet you’re kicking yourself now, superstar," Don Quixote said with a laugh. "They’ll take those 1,000 autographs and split them into common, rare, collector, and diamond-tier cards. Then they’ll keep milking the fans with various packs and sets. A fan might spend fifty USD on a hundred cards, but if they pull just one autographed card, they could make a hundred tis their money back, or more."
"This is a no-brainer," Li Wei said. After checking the contract and seeing no issues, he signed his na. "Two million USD for just a thousand signatures."
"Since we’re doing this," Li Wei said, looking at the sample card in his hand, "can I keep the 1/1 card for myself?"
"No problem," Don Quixote said. "I’ll negotiate that."
After putting that contract away, Don Quixote’s expression grew a little more serious.
He then pulled two more, even thicker docunts from his briefcase. One was stamped with the red "b" logo, and the other bore the famous Nike swoosh.
"John Mara personally called about these two: Beats headphones and Nike," he said, tapping the table. "I’ve reviewed the basic frawork for both contracts, but they each have performance clauses."
"The Nike contract is for five years and 45 million USD, and it also has performance incentives," he said. "Beats is being stingy, only offering 250,000 USD, but they’re backed by Apple Inc. They’ve given you a ’prove yourself’ clause. It’s up to you if you want to sign it."
"Fifty million USD in exposure and dia resources, but the price is winning Super Bowl MVP?" Li Wei tsked as he read the Beats contract. "Clever of them. They’re not willing to bet until they see a sure thing."
He didn’t have to think twice about it. The so-called "dia resources and exposure" just ant plastering videos and photos of him wearing their headphones online and in stores for a massive promotional campaign. It was clearly a win-win, but Apple Inc. made it sound like they were doing him so huge favor.
Still, Li Wei was full of confidence and signed the contract with a flourish.
The terms for the Nike deal were similar. The five-year, 45-million-dollar contract included a 15-million-dollar signing bonus, paid out at 3 million per year.
The remaining 30 million was tied to incentives: 2 million for starting and playing in at least 10 gas in a season; another 2 million if his personal signature line’s global annual sales surpassed 40 million USD; and a one-ti bonus of 2 million for winning a regular season or Super Bowl MVP award.
"What’s a personal signature line?" Li Wei asked, looking up. "Nike wants to give a collaboration?"
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