Guess who is the 4th highest paid Red this year
- Donn Beach
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Re: Guess who is the 4th highest paid Red this year
Nothing wrong with deferred payments, that they have such a low payroll is interesting
Re: Guess who is the 4th highest paid Red this year
Yeah, more proof that they need to teach Finance in High School. Deferred payments are massively team friendly which anyone with the basic concept of time value of money knows. Yet majority of dopes think it was dumb for the Reds to do it.Donn Beach wrote: ↑Tue Mar 28, 2023 3:14 pmNothing wrong with deferred payments, that they have such a low payroll is interesting
Is ridiculous that the tiny payment is the fourth highest so they look pathetic for that reason though.
dt
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Re: Guess who is the 4th highest paid Red this year
I always see people laughing at teams for still paying people like Bobby Bonilla and Griffey. In truth it is actually a very smart financially and saves the team money. A dollar today is always worth more than a dollar in the future. There has been cumulative inflation of nearly 50% since Bonilla stopped playing. by deferring the payments, the money that they give him now is worth about half of what it would have been if they had given it to him when he was playing. Its the same reason the Lotto will give you less money if you decide to take the one time lump sum payment.
Re: Guess who is the 4th highest paid Red this year
jinxCaptain 97 wrote: ↑Tue Mar 28, 2023 3:37 pmI always see people laughing at teams for still paying people like Bobby Bonilla and Griffey. In truth it is actually a very smart financially and saves the team money. A dollar today is always worth more than a dollar in the future. There has been cumulative inflation of nearly 50% since Bonilla stopped playing. by deferring the payments, the money that they give him now is worth about half of what it would have been if they had given it to him when he was playing. Its the same reason the Lotto will give you less money if you decide to take the one time lump sum payment.
dt
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- Joined: Mon May 06, 2019 9:23 pm
Re: Guess who is the 4th highest paid Red this year
D-train wrote: ↑Tue Mar 28, 2023 3:40 pmjinxCaptain 97 wrote: ↑Tue Mar 28, 2023 3:37 pmI always see people laughing at teams for still paying people like Bobby Bonilla and Griffey. In truth it is actually a very smart financially and saves the team money. A dollar today is always worth more than a dollar in the future. There has been cumulative inflation of nearly 50% since Bonilla stopped playing. by deferring the payments, the money that they give him now is worth about half of what it would have been if they had given it to him when he was playing. Its the same reason the Lotto will give you less money if you decide to take the one time lump sum payment.
Re: Guess who is the 4th highest paid Red this year
If I'm the player, and I understand the time value of money, I want to maximize the present value of the contract. So a contract for $20 million paid over the next 4 years -- $5 million per year -- has a higher present value than a contract for $20 million paid over the next 10 years -- $2 million per year (assuming a positive discount rate). But wouldn't you think that the timing of these deferred payments would be considered by both the team and the player (and player's agent and attorney -- and financial advisor? Or do you think that players just bargain for the highest "total" (i.e, not the present value), no matter how it is paid out?
If I proposed being paid $5 million per year for 4 years, and the team came back with an offer $2 million per year for 10 years, I'd say, "I understand that you want to spread this out and don't want to pay so much in the next few years. How about $2.5 million per year for 10 years?"
If I proposed being paid $5 million per year for 4 years, and the team came back with an offer $2 million per year for 10 years, I'd say, "I understand that you want to spread this out and don't want to pay so much in the next few years. How about $2.5 million per year for 10 years?"
Re: Guess who is the 4th highest paid Red this year
Sure bought a lot of fans obsess on the length of the contract as opposed to the NPV. The say 13 years??? He is going to be 41 yo by then! But in 13 years in 2036 $30M as season will be UT money.....AND $30M x 13 is more team friendly than 10 x 35Mgil wrote: ↑Tue Mar 28, 2023 10:39 pmIf I'm the player, and I understand the time value of money, I want to maximize the present value of the contract. So a contract for $20 million paid over the next 4 years -- $5 million per year -- has a higher present value than a contract for $20 million paid over the next 10 years -- $2 million per year (assuming a positive discount rate). But wouldn't you think that the timing of these deferred payments would be considered by both the team and the player (and player's agent and attorney -- and financial advisor? Or do you think that players just bargain for the highest "total" (i.e, not the present value), no matter how it is paid out?
If I proposed being paid $5 million per year for 4 years, and the team came back with an offer $2 million per year for 10 years, I'd say, "I understand that you want to spread this out and don't want to pay so much in the next few years. How about $2.5 million per year for 10 years?"
dt
Re: Guess who is the 4th highest paid Red this year
Ha! I've never seen NPV in a sports page. Maybe you should tell Divish to start a trend!D-train wrote: ↑Tue Mar 28, 2023 10:46 pmSure bought a lot of fans obsess on the length of the contract as opposed to the NPV. The say 13 years??? He is going to be 41 yo by then! But in 13 years in 2036 $30M as season will be UT money.....AND $30M x 13 is more team friendly than 10 x 35Mgil wrote: ↑Tue Mar 28, 2023 10:39 pmIf I'm the player, and I understand the time value of money, I want to maximize the present value of the contract. So a contract for $20 million paid over the next 4 years -- $5 million per year -- has a higher present value than a contract for $20 million paid over the next 10 years -- $2 million per year (assuming a positive discount rate). But wouldn't you think that the timing of these deferred payments would be considered by both the team and the player (and player's agent and attorney -- and financial advisor? Or do you think that players just bargain for the highest "total" (i.e, not the present value), no matter how it is paid out?
If I proposed being paid $5 million per year for 4 years, and the team came back with an offer $2 million per year for 10 years, I'd say, "I understand that you want to spread this out and don't want to pay so much in the next few years. How about $2.5 million per year for 10 years?"