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David Price won't pocket a big chunk of that $217M

Uncle Sam may be the winner of Major League Baseball's latest monster deal.

Pitcher David Price reportedly signed a seven-year, $217 million contract with the Boston Red Sox this week. The contract's total value would make him MLB's highest-paid pitcher.

David Price, then with the Toronto Blue Jays, during the ALCS in October.
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David Price, then with the Toronto Blue Jays, during the ALCS in October.

Though the raw figures are eye-popping, the lefty will pocket considerably less cash once the federal government, states and localities get their cut. Using 2015 tax rates, Price will see roughly 56 percent of that sum, or $121.3 million, according to Robert Raiola, a certified public accountant at CPA firm O'Connor Davies, who works with athletes and entertainers.

Price, like most athletes, pays income taxes in most of the states he plays.

As of earlier this year, Price's main residence was in Tennessee. Here is Raiola's rough approximation of how much money Price would pay in taxes assuming he remains a resident of Tennessee, which does not have a personal income tax.

  • Price would receive $217 million under the deal, assuming he does not exercise an opt-out clause after three years. The federal tax on that would total approximately $87.3 million.
  • Price would also pay Massachusetts tax on his income because he plays for the Red Sox. He would owe about $4.6 million over the length of the deal.
  • He would also be subject the so-called "jock tax," an income tax levied by some states and localities on traveling professional athletes. He would pay an estimated $3.8 million over the seven-year deal.

Under those rates, Price would pay about 44 percent of his salary in taxes.

Those totals do not include fees paid to his agent, Bo McKinnis. McKinnis' office did not respond to a request to comment, but agents often take between 3 and 5 percent of a contract, according to multiple reports. CNBC couldn't immediately locate Price directly for comment.

Jeff Beck, co-founder and managing partner of Proformance Baseball agency, charges clients 1.5 percent. He negotiated deals for MLB stars like Jose Bautista and Billy Wagner.

He noted that agents are charging the same rates that they charged in the '90s. Since then player salaries have increased, on average, 600 percent.

"It's an industry that is totally ripe to be disrupted," Beck said, explaining that agency fees need to be normalized to reflect inflation. "That 5 percent fee in 1990 is that same as 1.4 percent today."

While the National Football League Players Association caps agent fees at 3 percent and the National Basketball Players Association limits commissions at 4 percent, the Major League Baseball Players Association does not impose a limit.

"We would have done a deal with Price at 1 percent," Beck told CNBC. "To make a $2 million fee on a negotiation that got done before December? That's incredible."