praeceps93
Roaming in Rome
Mel Rojas Jr scratched last minute from a start in RF for Gwinnett. Maybe indicative of his getting the call to replace a traded guy
Under normal circumstances, I would agree.
However, if there ever was a time where a team like the Braves with a ~$120M payroll could afford to tie up $30M in one player it was last year. Let's take Greinke as an example where the Braves get him on a contract for 6 years $192M. Less money than he actually got you say? Yes but let's say the Braves frontloaded the contract where he got a $30M bonus and $40M the first year and second year (2016/17) with no deferments which offsets the value difference. If you spread the bonus over 6 years = $5M per. So the first two years cost you $90M ($45/$45), when you are rebuilding anyway and are in the middle of a relative FA drought where you don't have much in the way of players to spend it on. So the last four years of the contract cost you $102M or $20.5M per year plus the $5M bonus which =$25.5M.
So, in 2018, you would have Greinke at $25.5M, Freeman at $21M, Teheran at $8M, Markakis at $11M, etc. Those guys alone would be about 60% of expected payroll.
The concern with signing an ace is always at the end of the contract. They always get more years than they should and teams always want to escalate the payments at the end because of time value of money and inflation. But a rebuilding team especially a team like the Braves which has a decent payroll and a willingness to spend it could use the payroll respite afforded by the rebuild to load the contract differently.
Teams would never front load money to the degree which you are suggesting because it completely ignores the time value of money. We aren't just balancing a budget.
Mel Rojas Jr scratched last minute from a start in RF for Gwinnett. Maybe indicative of his getting the call to replace a traded guy
Who would have thought Josh Donaldson would have been traded two years ago? Troy Tulowitzki? What about Justin Upton before we traded for him?
Markakis, Jenkins and Whelan to the Yanks for Sabathia, McCann and Frazier.
Who would have thought Josh Donaldson would have been traded two years ago? Troy Tulowitzki? What about Justin Upton before we traded for him?
Not doing it because of time value of money concerns is just short sighted. As an owner, you aren't trying just to build a winning team but a selling brand and if investing early for a later payoff is the way to do it then it should be done.
Why on earth would the Yankees do this? There is only one big, young talent in that deal. And we would also be getting the best MLB player in it.
The Yankees aren't going to give us Clint Frazier for spare parts just because we're taking some money off their hands.
I'm just curious why you never see anyone ever from load contracts and that really is the only explanation. You're at the very least paying $1.10 on the dollar and that rate goes up for each subsequent year you accelerate payroll to the current year.
I think you don't see it because teams are always building for tomorrow and aren't nearly as concerned with 4 years from tomorrow. If you are a GM why worry about 4 years from now when you may not even be here.
But I think that kind of thinking misses an opportunity IF you are a rebuilding team. No one expects you to win tomorrow anyway.
This is about payroll flexibility - you have it now because you have moved a ton of payroll because of the rebuild so you can pay more. Paying less in the future to the player gives you payroll flexibility to pay other players more then. It's actually a reverse of the current trend. Scenario 1: Teams now pay $10M per year walking up to $15M per year in year 5 to arrive at some average over the years after inflation is taken into consideration (call it $12M). Scenario 2: You could start at $15M and work your way back to $10M and end up at an average of maybe $13M. Maybe some of the accounting whizzes on here can do an actual calculation. The idea is in scenario 1 that $15M in year 5 is less valuable than $15M would have been in year one because of the effects of inflation. But, in scenario 2 $10M in year five would be worth less than that same $10M was in year one.
The rub is that theoretically a business could invest money saved on the front end (pay $10M up front instead of $15M) and earn a return for however long you keep that money invested. But, with ball clubs, the money doesn't get put in a mutual fund somewhere to earn interest. It get's spent elsewhere as part of the teams spending budget. So if a team has a $100M budget and they are a rebuilding club with only $50M of that budget allocated, and you don't expect to compete AND/OR there aren't other good options that you like to spend the money on, then why not buy future flexibility at the expense of that flexibility today?
General managers won't necessarily be there long term (although they typically are) but team presidents usually have long tenures and owners even longer. Most of the time when a team is negotiating large salary contracts with players, the owner, team president, etc. are heavily involved, if not taking the lead in negotiations. I expect that the economic value of the contract is considered before the face value of the contract.
I also challenge your assumption that teams don't invest money in short term bonds / mutual funds to help pay for these investments. I've never read where teams only pay for salary obligations with operating cash flows. It's crazy to me that teams / owners with that much loose cash that have forecasted budgets years in advance wouldn't utilize an investment strategy. Maybe I'm wrong, but it seems wonky to me.
I'm not sure how this works with the Braves, since they play with their own set of financial constraints. I expect that if there is a situation in baseball where a front office would benefit from frontloading then it would be this one, since the powers that be don't necessarily care what we do as long as we are self sustainable. Given the choice, however, I would just as soon prefer extending our own homegrown players and use the excess payroll in that capacity than try to game a loser's market (free agency).
All completely different than Arenado. For 2 years now, Arenado has been arguably the best 3rd baseman in the game and definitely one of the top 3-5 premiere power hitters. He's a superstar. Donaldson is a superstar now but wasn't yet one when he was traded. He was just very good. No one expected him to go as crazy as he did in Toronto.
Wut? Donaldson had 7.6 WAR and 6.6 WAR in the two years before he was traded, he was insanely good before the trade. And he's been the best 3B in baseball since he came up to the majors, there is nothing arguable about it. Arenado is a 4.5-5 WAR guy, he can't touch Donaldson.