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ma-gaga
07-07-2004, 05:23 PM
I don't know that much about it.

Who is it good for?

eshunn2001
07-07-2004, 05:33 PM
I don't know that much about it.

Who is it good for?
It really should not matter when you talking tens of millions of dollars to the player. In the short term, It helps the teams manueverabilty as far as being able to bring in more talent in at the present time.

Randar68
07-07-2004, 05:36 PM
It really should not matter when you talking tens of millions of dollars to the player. In the short term, It helps the teams manueverabilty as far as being able to bring in more talent in at the present time.
I say good for both, although admit that deferred money isn't QUITE as good as "today money". However, the flexibility it gives the team will definitely help the team win which "SHOULD" help the player, although I'm not sure how many players care about that anymore.

Heck, these guys get paid millions to maintain their bodies and be in top physical condition and look how many overweight or out of shape guys are out there?

eshunn2001
07-07-2004, 05:53 PM
I say good for both, although admit that deferred money isn't QUITE as good as "today money". However, the flexibility it gives the team will definitely help the team win which "SHOULD" help the player, although I'm not sure how many players care about that anymore.

Heck, these guys get paid millions to maintain their bodies and be in top physical condition and look how many overweight or out of shape guys are out there?
Bartolo is just big boned :tongue:

samram
07-07-2004, 05:58 PM
I say good for both, although admit that deferred money isn't QUITE as good as "today money". However, the flexibility it gives the team will definitely help the team win which "SHOULD" help the player, although I'm not sure how many players care about that anymore.

Heck, these guys get paid millions to maintain their bodies and be in top physical condition and look how many overweight or out of shape guys are out there?
In a utopia, you're right, but when the players' agents have teams of accountants concerned about the present value of the deal, those ideals will be secondary. My guess is that when agents are recruiting clients, they may actually use examples of contracts they have negotiated. I don't know how good it looks for them to say, "See, the contract is really only worth this, but our generosity is going to allow the team flexibility in two years." Not to mention, if the players cared that much about team flexibility, guys like Boras wouldn't have so many clients.

Daver
07-07-2004, 06:00 PM
I don't know that much about it.

Who is it good for?
It differs from the veiwpoint you are looking at it from.

Chris Zorich had his last contract with the Bears defferred to be paid in payments of $70,000 a year for the duration of it's value, at his request, because he wanted to be guaranteed some income while returning to school and devoting a lot of time to his charity.

Most athletes view it as money they should get up front.

Defferred money in MLB is coming close to a non issue anymore, as the defferred portion has to be paid in full no more than two years after the expiration of the contract, as per the new CBA.

Flight #24
07-07-2004, 06:06 PM
Defferred money in MLB is coming close to a non issue anymore, as the defferred portion has to be paid in full no more than two years after the expiration of the contract, as per the new CBA.
I didn't know that, that makes Maggs refusal to defer money more questionable. The impact of a 2-year deferral is pretty minimal. I suppose the same could be said for the team, but for a player that "wants to stay and will take less to do so", it seems VERY odd.

soxtalker
07-07-2004, 06:15 PM
The ability to use any type of option -- including deferred money -- is good for both sides, as it provides a mechanism to reduce the risks that each side perceives.

eurotrash35
07-07-2004, 06:19 PM
Financially there's no way it could be good for both parties.

RichFitztightly
07-07-2004, 07:27 PM
I would think the most obvious answer that whomever has the money at the time will be earning interest on it. Therefore, Reinsdorf will earn a lot of money on money that should have gone to whichever player earned it. I don't know enough about interest rates to calculate what percentage of money we're talking about here, just suffice to say Reinsdorf made his money as an investor therefore he knows what he's doing.

samram
07-07-2004, 07:41 PM
It differs from the veiwpoint you are looking at it from.

Chris Zorich had his last contract with the Bears defferred to be paid in payments of $70,000 a year for the duration of it's value, at his request, because he wanted to be guaranteed some income while returning to school and devoting a lot of time to his charity.

Most athletes view it as money they should get up front.

Defferred money in MLB is coming close to a non issue anymore, as the defferred portion has to be paid in full no more than two years after the expiration of the contract, as per the new CBA.
If you want to see a deferred money contract, I think Clemens' previous contract with the Yankees (which was signed before the latest CBA) has him being paid $950,000 a year until 2010.

Daver
07-07-2004, 07:56 PM
I would think the most obvious answer that whomever has the money at the time will be earning interest on it. Therefore, Reinsdorf will earn a lot of money on money that should have gone to whichever player earned it. I don't know enough about interest rates to calculate what percentage of money we're talking about here, just suffice to say Reinsdorf made his money as an investor therefore he knows what he's doing.
In most contract negotiations, defferred money is given a small percentage of interest, usually something like two percent, to the player for agreeing to the defferrment.

RichFitztightly
07-07-2004, 08:07 PM
In most contract negotiations, defferred money is given a small percentage of interest, usually something like two percent, to the player for agreeing to the defferrment.
Ah, I see. That piece of knowledge makes a difference. It seems as though it's less than the normal rates, therefore, I guess the interest rates could be a factor depending on the player and/or agent. As for who it benefits more, I'd say more times than not it benefits the owner as opposed to the player. It just depends on where the player is at in his life and what he plans on doing with his money.

ma-gaga
07-07-2004, 10:42 PM
In most contract negotiations, defferred money is given a small percentage of interest, usually something like two percent, to the player for agreeing to the defferrment.
I probably should have been more specific in my question to "whom does deferred dollars favor financially". It sounds like it favors the owners because todays dollars > tomorrows dollars. If they can defer $10MM 3 years from now, the owners earn interest on the "players" money.

You'd assume that the player would be able to ask for a larger contract with deferred money.

Do a lot of teams use this? I mean, I've heard the Yankees, the W.Sox and the Diamondbacks were pretty open to doing this. I mean, this is quite a spectrum of teams. Yankees are easily the biggest pockets, the W.Sox the tightest "big market" team, and the D.Backs who had to get their investors to "'chip in" a couple of million to keep afloat. I guess, what type of team does this help?

Is this roughly the same as backloading the contracts like they did with Magglio's current one?

Daver
07-07-2004, 10:54 PM
I probably should have been more specific in my question to "whom does deferred dollars favor financially". It sounds like it favors the owners because todays dollars > tomorrows dollars. If they can defer $10MM 3 years from now, the owners earn interest on the "players" money.

You'd assume that the player would be able to ask for a larger contract with deferred money.

Do a lot of teams use this? I mean, I've heard the Yankees, the W.Sox and the Diamondbacks were pretty open to doing this. I mean, this is quite a spectrum of teams. Yankees are easily the biggest pockets, the W.Sox the tightest "big market" team, and the D.Backs who had to get their investors to "'chip in" a couple of million to keep afloat. I guess, what type of team does this help?

Is this roughly the same as backloading the contracts like they did with Magglio's current one?
Long term contracts are negotiated from a budget that is yearly, most teams use a yearly budget set to what they expect in gate to set what their payroll is going to be, defferred money lets them adjust that budget accordingly from year to year on long term contracts. The interest the players are earning on the money is minimal, but the owners are not making a killing off it either, it is close to a wash.

Most teams in MLB use defferred money when they can, with the new rule on defferred payments most agents are not able to use it against the owners as they have in the past.

The D-backs used after the fact defferrments when they made their series run, they managed to get players to accept a change in their contracts to free up money to sign players for that run, a coup that Jerry Coangelo is proud of, even though he is still paying Mark Grace for the next two years as a player.

Flight #24
07-07-2004, 11:10 PM
Long term contracts are negotiated from a budget that is yearly, most teams use a yearly budget set to what they expect in gate to set what their payroll is going to be, defferred money lets them adjust that budget accordingly from year to year on long term contracts. The interest the players are earning on the money is minimal, but the owners are not making a killing off it either, it is close to a wash.

Most teams in MLB use defferred money when they can, with the new rule on defferred payments most agents are not able to use it against the owners as they have in the past.

The D-backs used after the fact defferrments when they made their series run, they managed to get players to accept a change in their contracts to free up money to sign players for that run, a coup that Jerry Coangelo is proud of, even though he is still paying Mark Grace for the next two years as a player.
What I don't get is that if the Sox are supposedly willing to go to the 5-yrs/70m, as is reported, and they can't defer any money past 2-years beyond the contract end, Maggs is really stretching by saying that that deferral is a dealbreaker. I mean the inflation rate on money deferred by 2 years would have to be REALLY high to have a significant impact on the present value. I know inflation's supposed to rise some, but not to that level.

This makes me think that Maggs is really looking to break the bank and is paying lip service to the "I want to stay and will take a discount to do so" so that he doesn't come off like a greedy bastard.