Prior to the Mets’ re-signing of Yoenis Cespedes to a three-year, $75MM contract with an opt-out clause after the first season, the Nationals were viewed as the primary competitor for his services, offering a reported five-year deal with a value said to be around $100MM and an opt-out after two years. A pair of reports from Jon Heyman (Twitter link) and Peter Gammons of the MLB Network (at GammonsDaily.com) now shed some further light on the matter. According to Heyman, the base value of the contract was $110MM, but the deal contained “significant” deferrals. While that info alone makes it difficult to compare the two offers, Gammons adds further context, stating that the $110MM was to be paid out over a 15-year term, and after factoring in the deferred monies, the present-day value of the proposed contract was roughly $77MM.
If that number is indeed accurate, it’s not surprising to see that Cespedes chose a comparable amount over a shorter contract that contained an earlier opt-out date with a team/city with which he was already familiar. Of course, it should also be noted that the present-day value of any multi-year contract is somewhat less than the face value of the deal; the $47.5MM that Cespedes would earn from the Mets if he does not exercise the opt-out clause will be worth less in 2017-18 than it would be in the present day. Nevertheless, the extent of the deferrals in the contract proposed by the Nationals certainly appears to make the Mets’ offer a stronger option, barring further revelations about the pair of proposals.
As Gammons continues, the Nationals had to offer significant deferrals not only to Cespedes, but also to Jason Heyward and Ben Zobrist in their respective pursuits, due largely to the structuring of the MASN television contract. Because of the deferred money in their offers to Heyward and Zobrist, neither proposed contract was even close to the overall value that the duo got when ultimately signing with the Cubs. In Heyward’s case, the Cardinals’ offer was also significantly stronger than the reported 10-year, $200MM contract proposed by the Nats, after factoring in deferrals, Gammons notes.
Per Gammons, the structuring of the MASN television rights required the Nats to offer significant deferrals in virtually all of their contract offers this winter. Back in November a New York Supreme Court Judge ruled in favor of the Orioles (the majority owners of MASN), thereby voiding a payment of tens of millions of dollars that had been awarded to the Nationals by an arbitration panel in an effort to settle an ongoing dispute over the allocation of the network’s rights fees. (MLBTR’s Jeff Todd examined the dispute at length at the time of the ruling.) As Gammons notes, the difficulties for the Nationals will continue to linger until the two teams can come to some type of resolution on the matter.
Who cares. Seriously, I can’t wait until spring training.
Sanfransico vs Cubs
Royals vs Texas
I don’t understand the “who cares” comment. I don’t care for you posting your irrelevant opinion on a topic some find interesting.
I care, so how about you stop trolling and stop telling me what I should or should not be caring about!
It will be Royals vs Houston. That team will be a force for the foreseeable future.
In the old days this comment would of been deleted post haste.
I miss those days
You obviously cared enough to read the article or at a minimum the title.
This.
Yoenis Cespedes and his agent care. The Nationals and Mets care. MLBTR cares. Peter Gammons and Jon Heyman care…
+1
I hope that this dispute lasts forever.
Let’s Go Mets!!!
I hope cespedes bats .150 with no home runs over the course of this deal
So the Nats offered $77mm over 5 years? Could swear that $110mm is still $110mm no matter how long it takes to pay it out or receive it. Tired of the analytical junk in this game. Who cares how much $110mm is worth 20 years from now. It’s still $110mm.
But its not, thats the point. Thats why if you win the lottery, the lump sum payout is significantly less than the one with deferrals, money is worth more today than in the future. Its not “analytical junk” just because you dont understand it.
I didn’t know deferrals had anything to do with analytics anyway. Deferrals are hardly new.
$110MM spread out over five years versus $110MM spread out over 15-20 years is in no way, shape or form the same thing. You can roll your eyes because, in the end, it’s more money than Cespedes will ever spend, regardless, but to act like there’s no difference between the two is bizarre.
In regards to the present and future value of a dollar, does that hold true regardless of the state of the economy? From what I remember from accounting class it has something to do with an assumed rate of inflation, but if something happened that cause deflation wouldn’t it be better to have deferred money coming to you? I’m probably way off, just curious.
You’re right about the inflation, but there’s also the time value of money. Basically he could be getting interest on it if he had it now
Inflation is basically a necessity for economic growth, so governments will push it regardless of the state of the economy. I believe 2009 (after the financial crisis) is the only year in the last 50+ years that there was deflation in the U.S. It’s about as safe a bet as you could make that there will be a substantial amount of inflation by 2036. But yes, if for some reason there was actually deflation over that long of a period, then deferred money would be more valuable (assuming non-deferred money wasn’t invested at all).
+1
Umm it’s not “analytical junk”. It’s called time value of money which is a basic economic principle. You should really read this.
fangraphs.com/blogs/the-value-of-deferred-money-in…
Did Minnesota forget to incorporate basic economics into its education up there or something?
You really asked for it this time.
Most of the time, ridiculous comments on this site are matters of opinion. This one is totally, factually wrong.
Sorry but I call BS on the Nationals. This right here ” the Nationals had to offer significant deferrals not only to Cespedes, but also to Jason Heyward and Ben Zobrist in their respective pursuits, due largely to the structuring of the MASN television contract. ” just screams of trying to gain sympathy with the league. You pay what you can pay, if you can’t afford the player don’t bid with deferred money and then blame a deal. They gave Jason Werth that massive deal w/o deferrals, they extended Gio w/o deferalls, but now EVERY deal must have a deferal? Sounds like the Nats are purposely shooting themselves in the foot.
They had the 7th highest payroll in baseball last year and are paying a buttload to Werth, Gio, and Zimmerman, but it’s MASN’s fault… sure…
Yeah with Ted Lerner the richest owner in baseball. Big image down on Peter Gammons to even push this agenda,
Gio is gettgin $12m/ year for the remainder of the contract. I hardly consider that a “buttload.”
It worked last year to land Scherzer and Baltimore did the same with Chris Davis. They are trying to land a big fish while maintaining near term flexibility. They are trying to have their cake and eat it too. It’s not such a bad thing… Until an off season like this happens and they whiff on every impact player they’re pursuing.
It most likely didn’t help the way they structured Sherzer’s contract and tieing up that kind of money way past the expiration of the contract.
When those deals were done they may have thought that the reset of the MASN rights fees every five years would actually re-set the rights fees. Those deals you are referring to all happened before the current five year period (2012-16). Yes, it’s now dragged on long enough that they are still arguing over the last five year period as the next one approaches.
Show me a club whose TV contract is held by another team! Show me a large market team (Washington is #6) who is paid the same amount as a small market team!
I have really enjoyed thinking Cespedes went back to the Mets because of “loyalty”. And since that may still be the actual case… I’m going to pretend I never read this. Good day sir.
Not to worry – facts won’t make a dent in the narrative.
LOL! Good one!
Nats are done yet in landing a big bat… I’ll go out on a limb and say Brewers and Nats in a block buster deal. Ramos/Rendon for Braun/Lucroy with a few monitor chips either way.
This doesn’t make sense. Why trade for Brauns huge contract and Lucroy. When Ramos is young and controllable and when trading Rendon after the year he had in 2014 would be selling low on him and leave a hole at 3B. Braun would just add another OF to their mix of 5 deserving starters.
1) I agree w previous posters in that the Nats made their bed. Also that this is low of Gammons to get involved. I wonder if he’s getting some deferred money himself…
2) As an Orioles fan, knowing full well we get the best of the MASN deal and Angelos has plenty to spend aside from that…. It’s really frustrating that all we’re willing to do is bring back Davis….also with massive deferals. Oh, and not to mention we “don’t believe in opt out clauses”. I sure hope we get the draft right this year…
Why is it “low” to report further details of an offer that was publicized so heavily? There were others writing about how Cespedes turned down “more” from DC, so it seems plenty fair to put it in full context.
I don’t understand the hate for Peter Gammons…