Cardinals Will Be Paying Holliday Through 2029

As part of his new seven year, $120MM contract, Matt Holliday will be collecting paychecks from the Cardinals through 2029 according to the AP (via SI.com). As you know, the contract calls for a $17MM annual salary through 2016 with an option for 2017, however $2MM is deferred without interest each season. Depending on whether or not the option is picked up/vests, Holliday will be paid either $1.4MM or $1.6MM on July 15th every year from 2020 to 2029.

Just for some perspective, Holliday will be 49-years-old on July 15th, 2029.  


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116 Comments on "Cardinals Will Be Paying Holliday Through 2029"


Roll Fizzlebeef
5 years 6 months ago

Talk about a retirement strategy.

yanks200927
5 years 6 months ago

does arod contract have anything like that,, cuz i know that the rangers are still paying him??

Roll Fizzlebeef
5 years 6 months ago

Talk about a retirement strategy.

5 years 6 months ago

Why? Is there any sense to this?

Mickeyblue
5 years 6 months ago

In any business you always pay as little as possible now since money will not be worth as much in the future also you push it out incase you sell the business or in this case the team which would then become someone else’s debt. This is a basic strategy in any business and I myself do it w/ my business.

abothecardinal
5 years 6 months ago

I’m no math whiz, but if the Cards put the deferred portion in a 4% interest account now (14 million or 16 million), by the time they pay out the money will have paid for itself and they’ll be able to keep the 14 million initial principle. In a sense, it is a way to pay a player without having to spend the money. And Holiday gets money the Cardinals couldn’t otherwise afford to pay him.

5 years 6 months ago

Actually this only works if inflation is less than 4% (which it rarely if ever is). While yes, technically the team would have more dollars, the 2029 dollars are going to be worth less than 2010 dollars. So they’d actually be losing value if they just kept the money in 4% interest account.

5 years 6 months ago

But you are not taking into account the effects of compound interest. The money will easily more than double over time with compound interest and it is highly unlikely that money will be worth half of what it is worth today in 2029. It will most likely be around a 75% inflation rate by that time and that is only at the peak of the deal so it will definitely turn out to save the Cardinals millions and not to mention the cash flow it frees up to make profit from in other avenues of their business.

jldunn
5 years 6 months ago

But wouldn’t inflation compound too? Something today costs $100. Inflation rate is 3%. So next it costs $103. The year after that it $106.09 instead of $106. I might be looking at that incorrectly…I’m not an economist, but I did stay at a Holiday Inn Express last night.

5 years 6 months ago

Exactly. If it were really that easy to make money (or even keep money) over the long term, a lot more firms in general would do this, rather than make riskier investments. Also I’m sure the Cardinals need that money to a certain extend now. Afterall, they’re a baseball team, not an investment firm. And it seems I should’ve saved myself $40,000 and just went to a Holliday Inn Express rather than college…

abothecardinal
5 years 6 months ago

It is easy, unless, like you said, they need that deferred total in the mean time. Which may be the case. 4% interest isn’t investment firm territory, that is a conservative return for a high investment principle. It is only a problem if inflation is working against you. But the contract isn’t for 2010 2 million dollars value, it is for 2 million dollars. inflation works against Holiday (assuming inflation continues to happen) not the Cardinals.

5 years 6 months ago

Right, but if they had that money to just stick in an account now, I don’t think we’d be hearing stories about how StL is nearing their payroll limit. That said, there’s better investments now for $16mil than an account that one would freely admit loses value over time. In a healthy economy, inflation is about 5.5%. Right now it’s even higher than that, so I don’t think anyone would actually recommend this as a good financial move by anyone long-term, whether you’re a baseball team with $16mil or a retiree with $50k

abothecardinal
5 years 6 months ago

Oh, I see what you mean. Yeah, I’m sure there are plenty of better investments of 14 million than a 4% account. My point was simply that the Cardinals, even with a conservative investment, are the clear winners with deferred payments (obviously Holiday wins too, though not as much as if he had that money sooner. But he wouldn’t of had it sooner, it was either later or nothing – so both win).

And I think The Cardinals probably do a lot of money managing like that. I’m sure they aren’t operating with an – all profits go to owners and payroll strategy. I remember something like this kind of strategy with their contract insurance investments. I’d wager that they have reserves budgeted so that they can make the most of their yearly payroll.

Mickeyblue
5 years 6 months ago

In any business you always pay as little as possible now since money will not be worth as much in the future also you push it out incase you sell the business or in this case the team which would then become someone else’s debt. This is a basic strategy in any business and I myself do it w/ my business.

5 years 6 months ago

Why? Is there any sense to this?

dodgers_suck
5 years 6 months ago

thats insane!! i’ve never heard of such a thing. has anyone else?

5 years 6 months ago

The Mets are paying Bobby Bonilla almost $2M a year through 2035.

cdubs
5 years 6 months ago

Ha!

5 years 6 months ago

WOWOWOW!!!

5 years 6 months ago

Steve Young is being payed by the USFL until 2027

5 years 6 months ago

It’s a hair under $1.2M, not almost $2M, but yeah- the godforsaken Mets have to give Bobby Bonilla a million bucks every July.
Good god.

5 years 6 months ago

u can thank the great steve phillips or the wilpons for that move…

5 years 6 months ago

The Mets are paying Bobby Bonilla almost $2M a year through 2035.

DickAlmighty
5 years 6 months ago

It’s far from insane. It’s very typical. Players get portions of the salaries deferred all the time.

dodgers_suck
5 years 6 months ago

i knew that teams deferred salaries, just not like that. and bobby bonilla, whoa!

prophetjohn
5 years 6 months ago

yeah. albert pujols

stlcardsblues
5 years 6 months ago

Every team does this as others have responded. This is actually a lesser extreme than other cases. As of this past season Al Hrbosky (it was brought up during a game) was still drawing deferred checks from the Atlanta Braves and he was a player of there’s in the early 80’s. It helps the player keep a salary well after retirement.

dodgers_suck
5 years 6 months ago

thats insane!! i’ve never heard of such a thing. has anyone else?

drumzalicious
5 years 6 months ago

Beats any other retirement plan out there

strikethree
5 years 6 months ago

A ballplayer’s social security…

drumzalicious
5 years 6 months ago

Beats any other retirement plan out there

myname_989
5 years 6 months ago

Holy Bejeebus. O_O

myname_989
5 years 6 months ago

Holy Bejeebus. O_O

notjustanotherjones
5 years 6 months ago

Um… Pujol’s contract has X amount deferred and So did Rolen’s 90 million

notjustanotherjones
5 years 6 months ago

Um… Pujol’s contract has X amount deferred and So did Rolen’s 90 million

chesteraarthur
5 years 6 months ago

hoping money will be worth less in the future.

jayjay67
5 years 6 months ago

Very very smart move by both Holliday and the Cardinals

jayjay67
5 years 6 months ago

Very very smart move by both Holliday and the Cardinals

Bravesfan4life88
5 years 6 months ago

Geez, Boras is a genius.

DickAlmighty
5 years 6 months ago

How is Boras a genius? The deferred salary is a benefit to the Cards. Not to Holliday. Holliday would be better served by having all the money now…

jayjay67
5 years 6 months ago

No he wouldn’t. He has an income upto 50 that will not be taken away from him no matter what. A large income would suffer a lot more in the present financial climate than a deferred one.

DickAlmighty
5 years 6 months ago

What?

OK — he’s getting the same amount of money either way. I’m not clear why it matters whether he has an “income up to 50 that will not be taken away.” He gets $120M; whether he gets it in 7 years, 10 years, or 50 years, he gets the same amount. If he gets it now, he can invest it AND MAKE EVEN MORE MONEY. If he gets it later, he doesn’t get to do that… he just gets the money. Labor is not the only thing that can generate income. Money, itself, can generate income.

Also, what exactly does “a large income would suffer a lot more in the present financial climate than a deferred one” mean? First of all, a deferred salary, by definition, doesn’t suffer in the present financial climate. It’s deferred. Also, who the hell knows what will happen in the future. This may turn out to be a f*cking golden age if we get hit with massive inflation; or, the economic climate may turn rosy. Nobody really knows. If you know, you should be investing like a madman.

In any event, the idea that you don’t want to make money now because of “the present financial climate” makes no sense. If I offered to pay you $100,000 now, or $50,000 now, and $10,000 for each of the five subsequent years, you’d be crazy to take option B.

BLB25
5 years 6 months ago

take a look at tax brackets

DickAlmighty
5 years 6 months ago

1. You’re assuming our tax rates will be the same 20, 30, 40 years from now. Our taxes may be much higher in the future (to pay off the national debt; to pay for universal health coverage; to pay for a global warming emergency fund…). Tax rates aren’t set in stone. Based on history, the top marginal income tax bracket (the rate on all taxable income above ~$375k) is low right now (35%; from 1932 to 1986, it was above 50%; even in the 1990’s, it was at 39.6%). Maybe it’s better to make the big bucks now than it is in 2045.

2. When you earn multiple millions of dollars every year, MOST of your income is taxed in the highest tax bracket. Yes, if Matt Holliday makes $15M this year, and $2M next year, about $375k of the income of he earns in each year will be taxed at slightly lower rates (about 25-30%); whereas, if he makes $17M this year, only $375k will be taxed at the lower rates. But, even in the first instance, over $16M of the $17M he makes, combined, will be taxed at the highest rate. The amount he’ll save will be minimal. My guess is, you could exceed those future “savings” (you’d earn by avoiding the high taxes on $375k each year) by investing the extra millions you’d make right now.

BUT I DIGRESS… THIS IS MLBTRADERUMORS.COM, RIGHT. NOT MATTHOLLIDAYSTAXRETURN.COM.

5 years 6 months ago

…not to mention paying off this multi-trillion dollar pair of wars we been fighting !

its a good thing that we just started (in 2009 ) counting the money we put towards the war against our national debt lol

jb226
5 years 6 months ago

You’re assuming he would get the same amount of money either way. The deferment is a win for the Cardinals for roughly the same reasons you give for Holliday preferring the money now. It’s not unfathomable–in fact, quite likely in my mind–that Holliday’s agreeing to defer money (granting the Cardinals a win) ultimately landed him more money.

A shallow examination would guess that the deferred amount is what was basically extra from what the Cardinals felt they could afford (so, an extra $2MM/year for 7 years), but of course we’ll never really know for sure. The one case that we should all be able to agree is least likely is that he’s getting the same money he would have if they deferred nothing.

otirol
5 years 6 months ago

Your high bro, 100 grand and 120 million are not even comparable. Besides after 6 years of living the high roller life pulling in 17 mill a year don’t you think it would be nice to have something guaranteed for a long time so you can settle down. You could lose everything if you invested everything.

bjsguess
5 years 6 months ago

A dollar today is significantly more valuable than a dollar tomorrow.

kyledrenon
5 years 6 months ago

Absolutely. Sure it’s cool for Holliday, but it’s even cooler for the Cards. That’s an extra $1.4-$1.6M every year spend on something else.

5 years 6 months ago

If he ever runs into problems he could always give these guys a call…link to youtube.com

Bravesfan4life88
5 years 6 months ago

Geez, Boras is a genius.

osKeeeer
5 years 6 months ago

Like if he didnt need anymore money…

Ferrariman
5 years 6 months ago

he isnt getting a penny more then the 120million..its just being payed over a greater period of time.

osKeeeer
5 years 6 months ago

Like if he didnt need anymore money…

Drew
5 years 6 months ago

Keeps payroll down for this and subsequent years. More money available to plug holes.

5 years 6 months ago

Significantly, more available to offer Pujols next year.