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Half of Rafael Soriano’s new $28 million contract is deferred

Jan 15, 2013, 6:23 PM EDT

soriano getty Getty Images

Rafael Soriano‘s two-year, $28 million pact with the Nationals has an interesting financial breakdown.

According to Jim Bowden of ESPN and SiriusXM, the right-handed reliever will make just a $7 million salary in 2013 and 2014, and the remaining $14 million will be deferred until after the 2018 season. So agent Scott Boras can boast about landing his client a contract worth $14 million per year when in actuality it’s going to shake out much differently.

It’s still a nice score for Boras and Soriano considering the challenges presented by the new draft pick compensation system. The Nationals will not have a first-round pick in the 2013 MLB Amateur Draft because of the signing.

The Yankees, meanwhile, now possess picks 27, 31 and 32.

  1. tfbuckfutter - Jan 15, 2013 at 6:40 PM

    I was going to say “Wow, that’s really stupid of the Nats to do”….but then I saw my wife’s Visa bill sitting on my desk….

    • dcfan4life - Jan 15, 2013 at 7:57 PM

      If they hadnt done this, he would have made $14 Million a year. That would have made him the highest paid Nat anually, as a reliever. This makes a lot more sense.

      • tfbuckfutter - Jan 15, 2013 at 8:18 PM

        I don’t think paying a guy NOT TO PLAY FOR YOU 5 years down the road makes a lot of sense.

        I mean, yeah it makes sense now. But it doesn’t then.

      • dcfan4life - Jan 15, 2013 at 10:19 PM

        Read my comment below. A lot of factors going into play when he is paid in 2018.

  2. Francisco (FC) - Jan 15, 2013 at 6:42 PM

    So…. those wanting Scott Boras to negotiate your next pay raise: how does half your salary deferred till 2018 sound?

    • goskinsvt - Jan 15, 2013 at 6:47 PM

      It would appear they do not understand the time value of money.

      • tfbuckfutter - Jan 15, 2013 at 7:09 PM

        He can always call one of those companies that advertise on daytime TV that buy your annuities.

      • vanmorrissey - Jan 15, 2013 at 7:13 PM

        I have no doubt Boras has that covered and a stipulation in the contract is that the payout would equal the amount had he been paid the other $7mil/yr in 13 and 14, like he would get 15 mill or so in 2018. That, and I don’t doubt this either, Boras knows something we don’t that the economy takes another dive, money is devalued, and he’ll actually make more by deferring the payout. Hey, Boras, Genius!

    • lazlosother - Jan 15, 2013 at 7:11 PM

      You don’t know how our “negotiations” work. I’d still take Scott. It’s not like it works out this way for all his clients. I’m thinking his record is still pretty impressive.

      • tfbuckfutter - Jan 15, 2013 at 7:39 PM

        Agreed.

        Boras’ record of destroying baseball is almost unblemished.

        Only Selig is close.

  3. uyf1950 - Jan 15, 2013 at 6:54 PM

    Drew, if I’m correct when and if Bourn and Lohse sign the Yankees will pick 27, 33 and 34. The Cardinals and Braves who would be entitled to compensation picks when those players sign pick ahead of the Yankees at that point.
    The Yankees could also move up from their 27th pick depending on who those 2 players might sign with.

  4. cadillacjosh - Jan 15, 2013 at 7:21 PM

    If I’m making (at least) a couple million a year till 2018, I would still take Boras to negotiate my salary.

  5. djpostl - Jan 15, 2013 at 7:39 PM

    So they defer the bulk of the contract until the time where Strasburg, Jordan Zimmerman and Harper are going to start getting high salaries through free agency? Makes even LESS sense.

    • dcfan4life - Jan 15, 2013 at 8:05 PM

      In 2018 a lot of factors may go into play. As baseball contracts increase with the TV deals, and inflation hits, $14 million wont be the same as it is today. Second, your assuming the Nats sign all 3 of those guys long term. Thats if all 3 remain healthy, remain top of the line, and then all 3 command top dollar in a prime free agent market. And to predict that, for 5 years from now, especially since they all become free agents at different years is unrealistic. Thats why this signing is good. The deferred payment definately makes more sense.

      • djpostl - Jan 16, 2013 at 9:21 AM

        With the bullpen you already have even taking the chance on not being able to sign one of those because of this deal says you’re wrong.

        You have a lot of depth at the position, it’s an overpay based on how much (or in this case, little) interest there was on the market for the guy and then you defer money until the exact time your young stars are set to hit free agency.

        Keep trying to spin it only the way a fan could.

        Nothing about this deal makes sense.

  6. DelawarePhilliesFan - Jan 15, 2013 at 8:05 PM

    While I am tempted to troll – I have to say on the surface it strikes me as a “win now” type contract. I am a little suprised, but can’t say it is wrong. And while nothing is worse then paying a player not on your team (Thome in ’06, ’07, ’08; Adam Eaton in ’09….probably others I am blocking out), there is also the point that the Nats still have a lot of upside revenue potential. They can increase ticket sales, they can increase TV contracts, they can sell more stuff….so signing a guy that you will have to write a big check to in 5 years, the theory would go that by having him now, you will have the revenue later.

    Not saying it is good, not saying it is bad. Just interesting

    • djpostl - Jan 16, 2013 at 9:25 AM

      Lots of Nats fans are trying to play the “well, you can see the long-term implications of this and it’s brilliant! Once the fed does this and the economy does that and everyone in the greater Baltimore area jumps ship and suddenly becomes Nats fans bla bla bla” but you hit the nail on the head.

      This is “Mañana Economics 101″.

      And just one look at the history of baseball contracts shows that for every back-loaded, deferred deal that worked out in favor of the team you can find dozens upon dozens more that blew up in their faces.

      • DelawarePhilliesFan - Jan 16, 2013 at 10:39 AM

        Totally agree – which is why I am suprised.

  7. whatthehellisansky - Jan 15, 2013 at 8:07 PM

    how does this count towards the luxury tax threshold? by taking 7m/yr for two years and deferring the rest of the $$ after 2018 does he make his AAV $7M/yr? does that mean he only counts $7m towards the threshold?

    if so, whats stopping the yanks from extending cano to a 10 yr 200 mil extension paying him $5M/yr for 10 yrs and deferring the other $150M until the yr 2050?

    • DelawarePhilliesFan - Jan 15, 2013 at 8:48 PM

      As I understand it, if it is straight up deferred salary (i.e. not part of a buyout for not exercising an option), then the deferred money counts over the contract, with a discount to reflect present dollars. In other words, for luxury tax purposes, he is being paid all of it now (less the discount). Not the Nats have to worry about that tax just yet.

      At least that is my understanding – these things are complicated!

  8. superpriebe - Jan 15, 2013 at 9:02 PM

    I think this deal looks pretty good for Soriano and Boras. Cast against what Madson had to settle for last year, this is much better.

    I wonder if Boras advised Soriano to opt for free agency….not sure it was the best move…

  9. joerymi - Jan 15, 2013 at 9:22 PM

    A $14 Million dollar hit…

    *Right after Strasburg hits free agency.
    *Right after Zimmerman goes to $18 Million per.
    *When Bryce Harper potentially becomes free agency eligible.

    I get the theory. $14 Million is worth more today than 2018. But it isn’t going to be chump change. I just am not sure I wouldn’t rather take the hit now than when you have to pay a couple potential superstars.

  10. natslady - Jan 15, 2013 at 10:45 PM

    Funny Tweet:

    Ian Desmond ‏@IanDesmond20
    I guess the @Nationals are eating steak tonight.

  11. kappy32 - Jan 16, 2013 at 12:13 AM

    With the way professional athletes piss through their money nowadays, “making it rain” at the strip clubs, a contract with deferred money isn’t a bad idea. It will assure that Soriano has some money coming in when he may not be playing anymore. It’s like an awesome retirement plan. I’m sure there’s interest on the deferred money as well & a lot of teams use the current, standard legal interest rate, which I believe in DC is 9%. Good for Raffy; instead of making it rain in his 30’s, he can do it in his 40’s.

  12. brianabbe - Jan 16, 2013 at 12:31 AM

    Someone already mentioned the fact of the national TV money. I believe the Nationals are trying to establish their own regional network or increase their share at the least. If they manage to win at least a ring or two between now and 2015, I’m sure long-term revenues from advertising, attendance and local media deals will easily pay for this. Even if they only make 2-3 deep runs into the postseason, that’s an extra $30-40 million each time, conservatively estimating it.

    This team plays in one of the ten largest media markets in the country. I could easily see them spending just short of the mark of teams like Texas and San Francisco in the near future. Don’t worry about their account balances.

    • djpostl - Jan 16, 2013 at 9:28 AM

      The Nats can talk about expanding their fan base until the sun don’t shine but it won’t hapen to as great a degree as they think.

      Orioles fans (I am not one but live in “Oriole Country”) are not going to jump ship in large numbers.

      Phillies/Yankees/Mets fans who migrated south into the Mid-Atlantic region by the buttload aren’t either.

      They’ll pick up the DC crowd that is superficial and that is about it. The rest fo that big media market have established fanhoods and will not suddenly change allegiance.

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