Marlins have made 10-year offer to Pujols

[DJ's left nut]

Originally Posted by jd1020

I agree. It makes no sense to pay a player more for his best years and maybe throw some incentive deals on the back end when the money lessens.

Glad we're on the same page.

Though, for the record, the MLB CBA does not allow for performance based incentives. Besides, now you're not talking about front-loading a deal, you're talking about lowering the overall value of a deal by tying part of it to incentives.

I don't see why this is so difficult for you to comprehend - it's MLB; these contracts are all guaranteed. The money is going to be paid. So if the money is going to be paid, when you pay it is immaterial, more accurately, it's immaterial if you're trying to factor when you pay it in relation to when it is earned via commensurate performance. Who gives a shit if you're paying him when he's most productive? You're going to be paying him anyway. At that point the only question is "how can we reduce the hit in 'real' dollars paid over the life of the deal"? The answer is the same as its always been in finance - defer the costs.

It's not like the NFL where you can cut the guy loose at the end. Albert Pujols is going to get $220 million over 10 years. If you can convince him to take $1/year for the next 9 years and the remaining $219,999,991 in the final year, you are MILES ahead of the game because you keep that money and are able to invest it.

Or maybe you think banks charge interest on long-term payments because people enjoy paying it.

The time value of money is not a myth, nor are economies of scale when dealing with figures this large. If you truly don't understand this, you are a complete fool.