Click here to read a transcript of today’s chat with host Jeff Todd.
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Jeffrey Todd: “Well, Jeff Todd, thanks for joining, first of all.”
Bring back the downvote.
What’s a downvote?
Did someone call me?
Upvote/downvotes are how the teens on the site evaluate their worth.
Do you have any idea where the last of the MLB freeagents will go to/team?
I wonder why the WORSE contract ever wouldn’t be Panda n how he fleeced the Redsox by coming Into the season outta shape being paid millions? How can anyone forget that contract? Then to seal it he goes back to the Giants crying about how bad he was treated in Boston. He should’ve returned the money for not living up to staying somewhat fit, n catching the BALL!!!!
Dude’s nickname is Panda and you’re surprised he comes to camp out of shape?
Return the money?? There’s no returning money in baseball. While the panda ordeal was awful, the Chris Davis contract was… as the kiddies like to say these days… “pure cringe.”
Because it was a reasonably sensible decision at the time (he had been consistent and was still young) and was about half of what the O’s gave Davis.
The nats deferred money offers are to unstable and risky for players… aka the Bonilla deal. They can seem creative, but it is really not in the players best interest. Why would you want to be paid a million dollars over 20 years vs larger upfront money? What if you died? What if your health took a turn for the worse? What if the team dissolved? The insurance company backing the contract went belly up? What if the economy tanked, and interest rates spiked, paying you in dollars that are worth less than if you got them back at the time of your playing days? What if your wife divorced you and got a lump sum up front while you had to wait to receive your money? Again it’s creative, but the buying power of the contract is less imo, because you are also losing investment growth during the deferred period. It’s not the same deal, just because the numbers look similar. Case in point, if you win the lottery, do you take the large cash sum? Or take the even larger amount spread out over 30 years? Yeah … who here trust the lottery for 30 years? You almost always take the lump sum even though it’s less. It is pretty similar comparison, it’s not worth the risk. Only way a deferred deal works is for a veteran player chasing a ring, and the team is trying to fit him in the payroll, not for A 300mil+ 10 year contract. That’s a clown contract bro
Maybe the Nats front office financial professionals know something about future MLB revenues.
Financial bubbles always explode after a long run-up, with the future appearing to make the present look like a bargain.
Lots of people sold their real estate holdings and stocks 12-24 months before the 2008 financial collapse. Only to buy back at far lower prices a few years later. I was hardly the only one. Not hard to recognize signs of froth. Professionals see things far better than novices like me.
I’m not sure what you said really applies to a players contract over a deferred period, but I see the point you are trying to make. In the case of Bryce Harper and the Phillies&Nats offer. Harper was correct in rejecting the nats offer (in terms of the most money), as some experts experienced in this, stated that the offer from
The nats was 100,000,000 less than the Phillies offer, because of the deferred money portion. In that case, the deal looks similarc but it’s a far cry, 100 million is a lot of money, even to People who have a lot of money (minus the multi-billionaires)
Deferred money doesn’t make sense for a 10 year deal imo, it is more for that player chasing his final chance at a ring, and doesn’t care about the payday anymore. Now, ownership may see it differently, but from a players standpoint, you shouldn’t be taking deferred money.
All of those things are financial assessments that businesses and people make all the time. Obviously they are factoring in the value of compounded interest — or, in the inverse, applying a discount rate to future obligations.
Obviously if the team says “hey do you want that $10MM now or in 2029” you take it now. But otherwise you just work out the math and think about the risks and some of the factors you cite. (Remember, there are factors that can point the other way.) Ultimately, one team is probably offering more than another. If you have two similar value offers with different structures, you can pick which works better.
Bottom line: there’s nothing inherently good or bad about having cash in hand now vs an (income and risk-adjusted) guaranteed income stream later.
Cash in hand best
the nats do the deferred deal stuff for an extra reason: taxes.
look at max scherrer’s deal. a ton of it is deferred, true. but by doing so, it isn’t subjected to d.c. taxes, which is over 10 percent at the top rate.
instead, it’s only subjected to federal taxes, and since max moved to florida to duck state income taxes, it makes it a wash at the least, a slight profit at the most
mfm420. You are taxed where you work and you are taxed where you live. If a player plays for the Nats and lives in Florida, you have to pay DC taxes.
James, not if he’s no longer playing and it’s 20 years later. Scherzer even said as much in an interview.