Strasburg Signs Mega-Deal

[bravesfanMatt]

It is odd that a player insists on an opt out, yet accepts a deferred payment. So basically if he opts out, he devalues his last 3 years significantly. This screams, I want to stay a Nats for the entire 7 years.. but if you start to suck in a few years, then I am bolting..

 

[chop2chip]

To add to the deferment. If you think Max and Stras are $25 or $30 million per year guys. They are being paid at $15 million per year guys. Theoretically, the Lerners could put $10 million each that they are saving in the bank for the next 7 years. At 4% interest, that is $80 million dollars that is now covering the remainder of the contract. (In Maxs case they owe $105 million, In Strasburg case, they owe $70 million).

4% interest is really high, but sure that makes sense. I like the deferral model. They are essentially getting an interest free loan courtesy of Scherzer, Strasburg, & Associates.

 

[gilesfan]

4% interest is really high, but sure that makes sense. I like the deferral model. They are essentially getting an interest free loan courtesy of Scherzer, Strasburg, & Associates.

4%? I make more than that and I don't have the financial advisers or the real estate portfolio of the Lerners. They can buy a net leased drug store and earn more than 4% for 20 years.

 

[gilesfan]

It is odd that a player insists on an opt out, yet accepts a deferred payment. So basically if he opts out, he devalues his last 3 years significantly. This screams, I want to stay a Nats for the entire 7 years.. but if you start to suck in a few years, then I am bolting..

"Hey, I will give you discount over the next 3 years for financial security, but if I blow up, I'm going to want my $30 million per year"

 

[chop2chip]

4%? I make more than that and I don't have the financial advisers or the real estate portfolio of the Lerners. They can buy a net leased drug store and earn more than 4% for 20 years.

I read that as Washington using a sink fund to help pay the deferred payments. Usually those sinks funds have interest rates that mirror inflation (2-3%) because they are typically low risk. Now if you are suggesting using that money to truly invest, then sure your weight cost of capital is more like the 8-12% range, but that's definitely a heavier play than what I would expect.

 

[gilesfan]

I read that as Washington using a sink fund to help pay the deferred payments. Usually those sinks funds have interest rates that mirror inflation (2-3%) because they are typically low risk. Now if you are suggesting using that money to truly invest, then sure your weight cost of capital is more like the 8-12% range, but that's definitely a heavier play than what I would expect.

Yeah, good point. I'm not sure how they are doing it. If they are just using a sinking fund, they would probably have to put roughly $13 million a year away for Max and $8.5 or $9ish for Strasburg.

 

[Russ2dollas]

Seems fair on both sides to me. Just suprised bc it's boras. Good for stras to make boras work for him

Can't oversell he's a one tj guy who throws hard. He's one pitch away from being done. Take the money. He can make it up with endorsements investments opt out if needed

Ppl need to get used to it. Salaries are going way up. AVg starters are going to be getting 15-20 million

 

[gilesfan]

Interesting comments. This may have served another purpose:

http://www.usatoday.com/story/sport...s-contract-bryce-harper-scott-boras/84185952/

“Certainly, it set a tone from ownership that they are ethically and medically driven what doctors think is best for player,’’ agent Scott Boras told USA TODAY Sports on Tuesday. “Their ownership and their GM (Mike Rizzo) took care of him, and protected him, and now the Nationals are rewarded.

“That ethic is something you want to reward organizations for. And I certainly think for a player to know his ownership feels that way, it has to do with why Stephen is so comfortable in Washington.’’

Bryce Harper is a scenario where this ownership certainly has the financial wherewithal to do what they want to do,’’ Boras said. “It’s really up to the Lerners what they want to do with Bryce Harper.’’

 

[Millwood1Hitter]

Interesting comments. This may have served another purpose:

http://www.usatoday.com/story/sport...s-contract-bryce-harper-scott-boras/84185952/

“Certainly, it set a tone from ownership that they are ethically and medically driven what doctors think is best for player,’’ agent Scott Boras told USA TODAY Sports on Tuesday. “Their ownership and their GM (Mike Rizzo) took care of him, and protected him, and now the Nationals are rewarded.

“That ethic is something you want to reward organizations for. And I certainly think for a player to know his ownership feels that way, it has to do with why Stephen is so comfortable in Washington.’’

Bryce Harper is a scenario where this ownership certainly has the financial wherewithal to do what they want to do,’’ Boras said. “It’s really up to the Lerners what they want to do with Bryce Harper.’’

Fredi said "You should see Straus today, if he pitched everyday while recovering from elbow surgery. It'd be a totally different story, he'd be hitting the market."