Comments on: Year-by-year breakdown of C.J. Wilson’s $77.5 million deal

By: paul621

paul621 — Fri, 09 Dec 2011 15:56:07 +0000

I disagree a bit, scapistron. The NHL has rules about how frontloaded a contract can be, so that you can’t pay someone 20 mil for 4 years, then 1 mil for the next 4 with no intention of ever paying those last 4 years. The NHL has a salary cap that’s based on average salary, so frontloading with no intention of completing the contact is gaming the system. MLB teams don’t have a cap to worry about, so no similar incentive.

By: jackkoho

jackkoho — Fri, 09 Dec 2011 00:03:08 +0000

Only 10 million in 2012? How’s he even going to live off of that?

By: paperlions

paperlions — Thu, 08 Dec 2011 23:23:15 +0000

No, back loading contracts is more bang for you buck….you are getting the same bang no matter what…but 2012 dollars are going to be worth more than 2013 dollars or 2014 dollars or any other dollars to come….so it is ALWAYS better to pay as LATE as you can….always.

Inflation be like that, yo. [sorry, re-watching the Wire lately]

By: mirmz

mirmz — Thu, 08 Dec 2011 23:22:38 +0000

Using basic economics as my source, it is cheaper for owners to pay less now than it is for owners to frontload contracts. Inflation makes future dollars worth less than present dollars. Therefore, the money a contract promises in present dollars will be worth less in the future.

The players would love it if owners frontloaded contracts for the reason stated above. However, they’ll take $20M in any way, shape, or form – and be happy about it.

By: camleck

camleck — Thu, 08 Dec 2011 23:21:48 +0000

Heard of the time value of money? At the moment, 20 million in 7 years is the equivalent of around 16.5 million now.

To make a contract worth the same amount annually in real dollars, it has to be nominally backloaded. No doubt agents/owners take this into account when determining contract size and structure. A frontloaded contract for $100 million is worth more than a back loaded contract for $100 million.

By: clydeserra

clydeserra — Thu, 08 Dec 2011 23:12:20 +0000

I think, but am not sure, that it is slightly cheaper for the owners to pay more up front. A few reasons could include, inflation, interest, and luxury tax.

Just thoughts, not specifics.

By: scapistron

scapistron — Thu, 08 Dec 2011 23:04:40 +0000

Precisely. Thats what everyone does these days. See credit card debt, home mortgages, car loans, student loans, government budgets, …

Admittedly guilty of a few of those myself.

By: scapistron

scapistron — Thu, 08 Dec 2011 23:02:44 +0000

This is allowed by the NHL CBA and the CBA encourages this (whether intentional or not) as it allows for a buy-out of the contract by paying 2/3 (IIRC) of the remaining deal.

Teams will regularly sign players to 7, 8, or 9 year deals knowing that come year 5 or 6 that they will be buying the player out.

By: WhenMattStairsIsKing

WhenMattStairsIsKing — Thu, 08 Dec 2011 23:00:43 +0000

I don’t know why the MLBPA would care, or why it would be frowned upon in the CBA. The size of the contract would be the same; it would simply be a much more accurate pay scale for performance.

I guess it’s possible, Gonzo, but that would be a little too foolish, even for them.

By: lyon810

lyon810 — Thu, 08 Dec 2011 22:58:14 +0000

ya, but why pay now when you can pay later!

By: Gonzo

Gonzo — Thu, 08 Dec 2011 22:57:55 +0000

I’ve only seen hockey teams do it. Mainly the Flyers with Briere and Richards (And they got shit for it too). I wonder if it’s legal under the terms of the CBA.

By: WhenMattStairsIsKing

WhenMattStairsIsKing — Thu, 08 Dec 2011 22:47:22 +0000

Dear MLB teams: FRONT-LOAD CONTRACTS. It’s more bang for your buck.

By: lyon810

lyon810 — Thu, 08 Dec 2011 22:39:07 +0000

Yikes.