19
2011
Is Front-Loading Contracts The Way To Go?
An article by 
The idea of front-loading contracts is simple. You pay a player for his good years and as the contract goes on, the salary decreases. The concept is not meant to save anyone money and it does decrease short term payroll flexibility, but can benefit a team in the latter years of a deal. I am obviously not the first person to suggest this idea, but you will see why I pose the question as I go on.
The problem with most long term MLB contracts these days is that they progressively increase in salary as the years in the contract go up. (I consider anything 4 years and up to be long term, for the record.) The general logic is that as a player gets older, he finds himself in decline and more susceptible to injury. Free agency is a player’s market – for the most part, they determine the general range of money being put into the contracts that they are offered. Once you come to terms with that, understand that players are looking for longer contracts than they ever have before.
I am not looking to save the Wilpons any money at all. However, if they are going to be stingy and place payroll limitations on the team, front-loading a contract is a way around it that won’t leave the team in a troublesome situation in the future. Here are a few examples of some contracts that would’ve gone differently if front loaded. I cite a few examples to show some players that will be earning their biggest paychecks in years that will most likely have a decrease in performance:
- Cliff Lee: 5/125. Lee is an excellent pitcher and there is no question about that but he received this contract when he was 32 and it pays him more as it goes along. In 2015, when Lee is 37, he will be making $25 Million.
- Barry Zito: 7/126. Another contract that increases as the time passes. When he’s 35, he’ll be making $20 Million.
- Ryan Howard: 5/125. Howard is already in decline and will be making $25 Million in 2016 when he is 37.
- Johan Santana: 6/138. I hate to bring this one up, but in 2013, he will be making $25.5 Million – at age 34.
- Chase Utley: 7/85. Utley will be making $15 Million in 2013 at age 35.
Alex Rodriguez may have a horrible albatross of a contract, but the Yankees did do something interesting with it. During 2009/2010, Rodriguez was paid $32 Million and although he’ll be under contract at age 42, he’ll be making $20 Million. Obviously, $20 MM is not chump change, but think about that for a second. That’s an odd way to front load a contract, but it begins the conversation nicely.
Regarding our front office, there’s no way that you can convince me that they unable to compete and build up a structure for the future at the same time, like so many have said. To do that, not only will they have to draft and develop well, explore the International markets, and acquire good players via trade, but they will also have to sign free agents as well. It’s inevitable – we will never have every roster position addressed with an in-house solution.
The way the market dictates value these days, if we don’t give someone like CJ Wilson the money or years he demands, someone else will. I’m not going to sit here and say that if he demands 8 years and $200 million, that we should give it to him. That’s an extreme situation and has no place in this discussion.
CJ Wilson was the reason I started pondering the idea of front-loading contracts in the first place today. He’s 30 right now and he’s seeking a contract along the lines of 5 years/$100 MM. He’s likely to get something closer to 5 years/$80 Million or possibly even a 4 year deal unless he amps up his performance in the postseason. This is what a 5/$80 contract will probably look like versus what I think front-loading could do for it:
- 2012: $12 MM vs. $22 MM
- 2013: $13 MM vs. $21 MM
- 2014: $16 MM vs. $21 MM
- 2015: $18 MM vs. $ 9 MM
- 2016: $21 MM vs. $ 7 MM
It looks like a weird breakdown, but think about this for a second… Both contracts add up to the same amount of money committed to the player, and although the front-loaded contract reduces the payroll flexibility here and now, it works to satisfy the crowd that worries about overpaying a player when he doesn’t deserve it.
The likelihood is that Wilson, or any pitcher at his age with his skill set, will produce much more in the front-end of his contract than the back end. In this way, when the Wheeler/Harvey/Familia/(Insert Name of Mets Pitching Prospect Here) train arrives, there’s not much of a problem in terms of money committed to players that aren’t performing.
Plus if things really get bad ala Oliver Perez, I’m not above cutting bait on a player and eating some money.
Front-loading minimizes the long term risks and allows him to be paid more accordingly.
I’m not saying we need to go out and sign CJ Wilson to this contract or any other player – but I am using him as an example. If we continue the process of offering contracts the way we always do, and this may come handy in terms of signing Jose Reyes, we’re going to end up like the Philles in a few years – stuck with declining players and bad contracts of high value.
I’m not interested in saving the Wilpons money, but I am interesting in competing and building at the same time.
About the Author: Satish Ram
I am a Senior Writer and Editor here at MetsMerized - where I specialize in Minor League coverage. I have been on the staff since 2007 and I am currently in my third semester of college in New York City. You can find me at www.facebook.com/SatishRam or @SilverHeatMMO. Feel free to message me - I love talking about the Mets or baseball overall with anybody.
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It seems like between Satish and Vinny B, the people who should be calling the shots for the Mets are right here on this blog.
I really like the idea of front loaded contracts, specially when signing players who are in their thirties – pay the players when they perform and give the team payroll flexibility when they get older.
Front loading contracts just cost the team more money. Back loading them saves money because you earn interest on the money you keep. If you happen to excite the fan base into spending more in the first couple of years you earn interest on that money too and that will go toward paying off the contract in later years.
By front loading it your just tricking yourself into thinking that your getting less but your paying less too so it’s OK. If it’s trades your worried about you just send along an agreeable amount of cash and be done with it.
The whole reason teams like to back load deals it that it saves them money. Sometimes it also saves players money as well in taxes. Other times it’s what players have to accept in order to get the total package their looking for. One dollar promised today to be delivered in two years is really only worth 90 cents right now.
THANK YOU Satish!
Big contracts are NOT the problem it is the Construct of those contracts that make them toxic!
Many look at the terms of the contract (Length and Total) and forget there is nothing in the CBA that insists that the contract has to include a raise from previous years for every year of the contract!
However Players and Agents like it to be done that way because it makes it that much harder for the team to trade him away if he should decline. They also insist on NO TRADE clauses to ensure that doesn’t happen.
But you know that the clauses and payroll acceleration is not always that important to the player at the time of signing. If you frontload a Contract and give them the No Trade clause they still get the same amount and all the control to where they go later in that contract!
GMs need to start realizing that despite probably OVERPAYING a player the first 3 years over what the average salary for that contract is it leaves them in a much more flexible position later on. You will be paying for the GOOD years and maybe not have to pay so much or have difficulty making deals if he does manage to decline or suffer from chronic injuries because the Salary per year doesn’t scare anyone off.
And if I’m a GM and a player insists he wants a long term contract AND Insists on NO TRADEand Accelerated per year Salary then I take a cue from that and realize that the Player OBVIOUSLY thinks he will not be able to earn and be worth that Salary when the time comes!
If a player insists on making less per year with late guarantees I would pass!
Let someone else give the player the ENTIRE EDGE late in the contract both with toxic salary and no trade!
By front loading you are giving the player the SAME amount of money total, He can even make more by investing the difference from average if he has half a brain!
And so he won’t get as big a paycheck later on!
He will get more upfront!
And the bottomline for the Player and Agent is how much they get! They are going to get it no matter what! Even if the player gets cut in the low salary years he still gets the money!
And this is the SMART way to buy!
Too bad we won’t be doing any of that until 2014 when this MAGIC is going to overcome the Minor Leagues and make a team of NO STARS into ALL Stars…
If you in fact believe half the crap posters are selling here in regards to what we should do next!
I hope by now you are convinced “And this is the SMART way to buy!” is wrong.
I don’t expect you to admit it, but spending more $ on a commodity you can have for less isn’t the smart way to buy.
Nope because all you seem to have is some archaic point on INTEREST which you have pegged at 5% which no bank or institution gives you in this day and age!
Just the TYPICAL Jessup “I’ll Guess and be COMMITTED to the guess and that will be enough” and “if you disagree your crazy” method you use all the time!
You know like 7.5 games out was SEASON OVER!
GO CARDS!
Good post, Satish. Nice examples. This topic has been debated for years now, and I think the reason is two-fold. First of all, if it seems so easy, we’re probably missing something. As you said, you’re not the first to broach this topic, so it’s not a new issue. There must be a reason the general public isn’t aware of, because agents and GMs are smarter than we are and if it was so easy, they’d have done it already. Something must be standing in their way.
Secondly, being a GM is a fickle position. It’s all about win now and what have you done for me lately. Take the Mets, for example, who have a budget. They need Reyes back and could use a guy like Wilson. They have a good lineup, and since there’s no set formula for a bullpen, they could very well have the best pen in the majors next season, even with the same guys coming back. So Reyes and a starter are the two must-have’s this off season. If they back loaded both contracts to pay Wilson the $22 mil you suggested and maybe $25 mil to Reyes, they might not be able to swing that. But maybe the $32 mil for both players if their contracts were set up normally could be possible, and it might also be conducive to getting even a third player to try and help now. Front loading contracts helps in the future and hurts now, and that’s not what free agency is all about.
If this ever happens, it’ll have to be from a GM who’s had a lot of recent success, a very healthy budget, job security, and enough depth in the minors to overcome FA’s not wanting to be a part of a new experiment. Jon Daniles and maybe Wren. Maybe Cashman if he comes back, although the Yankees always operate on a different plane of existence than do the other 29 teams, so who knows about them.
I’d like to see it, if only to shake up the way baseball does business.
Sorry,”If they back loaded both contracts to pay Wilson the $22…” Obviously meant front loaded.
Xtreem,
Thanks for the reply. I think Jon Daniels is a good example of somebody who has the ability to take a risk on something like this.
The concept of front-loading does exactly what you said: It helps in the future and hurts now. But if an owner allows a team payroll flexibility, this is something that should be looked into in my eyes.
The Mets, currently, are not the best example – but It wouldn’t hurt with risky contracts.
Nothing can help with risky contract except not signing them.
This whole concept of you have to pay a guy for 7 years but he’s only going to be good for 5 would be fine if he was GUARANTEED to be good for 5. He’s not. So if you start with the premise that your going to spend 135% of what your going to get and then on average you really only get half or less of what you were expecting how could that ever be considered good?
You are so much better off taking that 100 M and spending an extra 5M every year on IFA’s and the draft every single year for the next decade. If just one out of 10 IFA’s pan out big time you’ve already gotten more out of your money than a most free agents will ever give you. If just one of the 40 extra guys you went over slot on makes it big you’ve got twice as much production as you’ll ever get from a free agent, even those that turn out good.
That’s the only front loading that makes any sense.
The draft or international free agency is just as much of a crapshoot as signing established veterans. I believe in spending more money in the draft and IFA but you can’t just stop giving large contracts all together.
Giving free agent contracts allows the team to help themselves right now at the MLB level and IFA/Draft picks take a while to develop. It is possible to focus on both at the same time.
One to one it would be but the costs aren’t the same.
Dollar cost averaging the draft and IFA vs. the 100 M free agent the former would win out every time and the 100 M dollar free agent added to THAT is the thing that would put you over the top.
based on time value of money (IOW inflation/interest), a backloaded contract need to b higher in total $$ to reflect not getting your money as soon. So IOW, unless a front loaded contract is lower in total $$, the team would end up effectively paying more.
But, assume the minor $ adjustment is made, teams like back loaded because they get more flexibility now 9since you have to actually py out the big money now) and don’t care as much about down the line.
If they are going to pay the guy the full contract anyway since they are guaranteed, it all works out the same if they overpay/underpay vs. underpay/overpay. Still laying out the same amount.
and as to the idea that a guy with a lower salary later is easier to trade, teams do that all the time with big deals, by eating some money off the back end. In your example in 2016, if he is tradeable for 7mill, the team would just have to eat the other 14.
Pay me know, pay me later, still comes out the same.
but looking at the mets, if they can only spend 30 mill in an off season, better to get a guy at 15 + another at 15, vs. just the first guy at 30!
Or at least Bell Curve the amount. 100 mil at 5 years could be 15/22/25/22/16 or something like that.
And it also makes sense to front load contracts if you have the flexibility at this current moment. The Mets don’t, unfortunately. And with the team having multiple needs and limited payroll, it makes sense to balloon the salaries on the back end as they can plan for Bay’s money and Santana’s money and Wright’s money, etc. coming off the books.
And honestly, these ego maniacs are going to be all PO’d if they are playing at high levels and only getting 7 mil per year. yes, they got paid the previous years, but ego would play a roll, I’m sure.
The problem is that if we add a few new contracts now, and back-load them, we’ll be in the exact same position in a few years if ownership decides to restrict payroll again.
I don’t think ego will get in the way as much. They will still end up with the same amount of money at the end of the contract.
Two points that might be relevant – one argues for front loading contracts, the other against it:
• If things turn out badly the player in question is more readily tradeable – think Castillo, Perez and for the current roster Jason Bay. That’s a plus
• Value of money calculator. The math in the 5 yr/$80m example isn’t real. It costs the club substantially more to make those big up-front payments. In example A there is $10m that could be invested for several years and would generate a return on investment. So in the 2nd example the “cost” to the club is much more than $80m.
That second point is why contracts are structured as they are. Unless you’ve got a front-office completely unaware of basic economics they would be offering Wilson a front-loaded deal for less than $80m to make them equivalent. Only dumb businessmen would fail to “discount” the present value of money.
oops – I was typing my post when “any” posted. What he/she said!
Theoretically you could front a load a contract at say 25, 25, 25, 10, and 10 and the player could even quit after year 3 having earned 80% of the deal over 60% of the time.
But the likelihood is, on a contract for a player over 30 or so (since they continue to seek long-term contracts), their best play will be in the original few years of the contract.
Which really begs the question. How can you ever field a team that is competent at half of the roster and good/very good or great at the other half if free agency is the main source of the good half of your roster and those guys last on average 3 years? Not to mention the half of them that busts?
You forget though that when a big money signing is made it usually comes with a jump in fan attendance which offset the shoirt term costs and are gone by the third year of the contract if that player is the only one worth going to see (or maybe NOT worth seeing anymore!)
It’s better to pay the BIG BILLS when your making the BIG Bucks!
And the beginning of the contract usually has more of a plus in generating revenue than the late part of the contract!
It’s only in the rarest of circumstances that a free agent signing bumps attendance if the club isn’t winning. In general, if the club wins folks come. If they don’t they stay home. A Pedro Martinez is one thing but a Jason Bay, Carlos Beltran, Francisco Rodriguez, Johan Santana signing has a very short term impact if the team is not competing for the playoffs. If we signed (we won’t) Albert Pujols this off-season and lose 6 more games next season attendance will still be lower.
Right. Like with Bay. If we had front loaded his contract we’d have 10 M or so less to put toward the 2012 roster.
Exactly.
Yes what Xtreem and Any noted is correct. There seems to be some reason why it doesn’t happen more and I suspect the players and agents have something to do with it as well as the luxury tax that kicks in every year if you go over a certain amount.
But that said it makes a ton more sense to pay the big bucks early as a big signing usually shows in the attendance figures EARLY in the contract to help pay for it and later on the NEW EXCITEMENT wears off and they don’t go just to see that player play!
And in the example Any suggested not only does paying his salary to ship him off leave you with no way to pay that off (because even if they STILL go to see them he will be gone) it makes a lot more sense to pay the bulk while the move is still appealing to fans and they might go to see him and subsidize the contract than it does to spread it out and hope you will have made enough or will continue to make enough to pay him the accelerated rate in what is likely to be a lesser performance than previous years!
And if it really is the Player/Agent that has a problem with it there is nothing to stop them from having a REVIEW clause where the team can extend him or give him a bonus that gives the team and the player a chance to ear even more if he continues to perform at a high level.
I for one wonder why teams offer High Salary at all and don’t go the Signing Bonus route for the majority of the money and keep the actual salary per low!
But I suspect the CBA and or Luxury tax may have some rules that don’t allow that!
well, the money to buy out the deal at the end is the money you never paid him in year 1.
I’ve been a big proponent of front loading contracts and I do agree that it’s something that could/should be looked…there some other issues that need considered.
A big one is economic. The way inflation is working, 22mil in 2012 does not equal 22mil in 2016. For every year of a contact, the value of the dollar difference is greater. A team could easily invest 10mil today and have more money down the road and pay the back loaded contract if needed.
Giving a player a contract is a lot like buying a car…their value quickly drops after a few years, but you’re still paying the same amount for him.
So it’s not a simple as dispensing the money at the beginning instead of the end and having them come out a equal as you’ve shown. it would be more like…
2012 20mil vs 15mil
2013 20mil vs 16mil
2014 15mil vs 18mil
2015 10mil vs 20mil
While the first deal may look better to the club because it’s cheaper in the long run, the player is making out more because 20mil today is more than 20mil in for years and they have the those extra years to invest the money.
Also, players contract prices are going up every year. Look at Beltran his contract broke down like this…
5:$10M, 06:$12M, 07:$12M, 08:$18.5M, 09:$18.5M, 10:$18.5M, 11:$18.5M
now in 05, that 18.5mil was monster, not too many players mad that then, but in 2011, it wasn’t that hard to move.
Remember, most GM’s (like our elected officials and CO’s of major corporations)only have to worry about the short term…most likely they’ll be gone before the big contracts are…if you don’t do everything you can to win today, then you won’t be around to take advantage of long term planning tomorrow.
Exactly, we as fans see X for X years and think it’s black and white. We forget about business economics involved in the deal.
A successful business wants as much $ as they can have in the bank at 1 time.
So if I have $100mil, and in 2012 I pay $15mil on a player, now I have $85mil in fiscal year 2012 to invest and earn interest on. If I front load it and pay that same player say $25mil in fiscal year 2012, I now only have $75mil to invest/return interest on.
Thus, as a business person I am not making as much money as I can.
If I can get CJ Wilson to be a Met with a backloaded deal, there’s literally no good reason as a businessman to want it to be a frontloaded deal. I lose more money that way, for something I’d get anyway.
Sure – dollar today is worth more than a dollar tomorrow, thus keeping it and paying tomorrow makes more sense from an ownership point of view.
But in an example where payroll for next year is fixed at say $110m it doesn’t matter if contracts ar back- or frontloaded. The Owners will still pay $110m no matter what the distribution looks like.
You can naturally argue that backloading increases “win now” since you can afford more players early, but that is what at least I would call poor managment from the GM.
Looking at the Mets 2012 with a $110 budget due to the Wilpons gives a picture that it won’t be easy to fit Reyes with a front loaded contract if he is to get the infamous “Carl Crawford money” (7yrs/$140m). Given that the max payroll 2012 is fixed at $110m (if a front loaded contract were to increase it, my argument falls as the Wilpons then would loose/pay interest) the Mets probably can’t afford to pay Reyes enough in the first two or three years (+$25m) to make up for the last two years (when Reyes is 35, he might not be half the player he is today).
Swede: thanks for your comment
You are right “But in an example where payroll for next year is fixed at say $110m it doesn’t matter if contracts ar back- or frontloaded. The Owners will still pay $110m no matter what the distribution looks like”
But the problem is Option A of backloading allows the team to invest $110m in their team budget but invest MORE in other avenues to make up the cost of the contracts they are paying out. Option B of frontloading, gives the owner less flexibility in the investing world to try and earn back some money so that they can continue to invest in the team.
You see the difference? Almost every baseball team has an owner and that owner doesn’t just maintain the ability to pay their players solely on attendance+hot dogs etc. They have outside revenue sources that allow them to funnel money into the team. When you take $ out of that revenue system, you in turn create less of an ability to spend MORE on the team
Ok I’m going to call the Bluff…
Invest in what?
What are they going to invest in that returns 5% pray tell?
SOMETHING ELSE is not an adequate description!
I used 5% as an easy math example. If you don’t think it’s accurate that front loading a contract is in no way the best thing for an owner to do then you simply do not understand economics.
It doesn’t take sabermetrics or traditional baseball thinking to know that if an owner has more money to invest today, he has a greater chance of earning back more money to funnel into the team. It’s basic real world economics.
If I have 10 dollars, and give you 8… I have 2 dollars to invest and try to earn money on. If I have 10 dollars and give you 5, I have 5 dollars to invest and try to earn money on.
If we’re going to sit here and argue if $2 is more than $5 than there really is nothing we can agree on.
Yeah you used 5% because you were talking out of your butt (as usual) and came up with a number that worked for your bull!
But the average interest rate is below 2% these days and with Inflation currently at 2.9% how much do you save by paying even LESS later?
So add your 2% interest as you did for 5% and then take away 2.9% each consecutive year to reflect inflation and tell me who actually saved more money, the front loader or the back loader?
Yes and no. If the payroll for the entire squad in 2012 is $110m, this is the amount of dollars the owner has to pay that year, no matter if the contracts on the squad are front- or backloaded.
If you plan to have a certain payroll, the alternative for not paying player A let’s say $25m as part of a frontloaded contract, the alternative is not to invest the money, but to give them to maybe two players with backloaded contracts. What makes most sense? Well, that depends how the rest of the team looks etc. etc., but from an owner perspective, I can’t see the difference.
I can see that backloading also makes financial sense, but frontloading does to. However, when frontloading contacts, you musn’t increase your budget for year 1, it should stay the same as it would with non frontloaded contracts. Thus it becomes important for owner to every year asses how much they want to spend on player wages, and then not exceed that budget. This is a simplfied description of reality, but I think it shows that it can make sense, even for an owner to offer players frontloaded contracts, at least when you expect players to regress over the course of the contract.
Right… but if you can have CJ Wilson (for example) and have a payroll of $105m versus having CJ Wilson and have a payroll of $110m… it literally makes 0 sense to choose option B.
Aboslutley, I agree on that. My argument is that the payroll is set, that the payroll will be $110m no matter what Wilsons contract would look like since you would (or rather, from a fan point of view, should) spend the remaining $5m on another player.
“but if you can have CJ Wilson (for example) and have a payroll of $105m versus having CJ Wilson and have a payroll of $110m”
Yeah when you limit the scope of the thinking to the first year…The gains are in the latter years which you don’t ever seem to consider here!
How about CJ Wilson at 95-100 Mil three years from now?
I’m going to whole heartedly disagree but before anybody jumps down my throat, let me tell you why.
As a fan, I agree with you. Heck, if I was a player, I agree with you. Where I totally disagree is as an “owner.” And I think it’s easy to think this method works for everybody, but it doesn’t.
You’ll often see teams backload contracts rather than front load. Do you know why? Interest and Insurance.
This may be something you don’t know, or maybe forgot. Regardless, let me explain.
In your example, you recommend front loading a contract at 22m/21m/21m/9m/7m.
You came up with 2 proposals. The first was paying Wilson 12m/13m/16m/18m/21m. The second was 22m/21m/21m/9m/7m.
So lets take your second proposal since that one seems to have the most fanfair around it. For the sakes of easy math lets just assume a 5% interest payment on the contract. Remember that goes to the player on top of his salary.
Here is how your proposal looks if put in front of Fred Wilpon.
$ 23,100,000 year 1
$ 44,100,000 then add 5% $2,205,000
$46,305,000 year 2
$67,305,000 then add 5% $3,365,250
$70,670,250 year 3
$79,670,250 then add 5% $3,983,512.5
$83,653,762.5 year 4
$90,653,762.5 then add 5% $4,532,688.12
$95,186,450.62 total paid to C.J. Wilson on a 5 year/80mil contract.
Now let’s take your first proposal. 12m/13m/16m/18m/21m.
$12,600,000 year 1
$25,600,000 then add 5% $1,280,000
$26,880,000 year 2
$42,880,000 then add 5% $2,144,000
$45,024,000 year 3
$63,024,000 then add 5% $3,151,200
$66,175,200 year 4
$87,175,200 then add 5% $4,358,760
$91,533,960 total paid to C.J. Wilson on 5/80m contract
This is exactly why you rarely will see a MLB team front-load a contract because yes on paper and as a fan we think “who cares about year 4, and 5.” But the truth is, it’s a business. And if you’re running a business and you have a very, very easy way to save $3.65+million dollars, you’re going to take it every single time.
Wilson doesn’t care. Wilson works in “real dollars.” When Wilson comes to the table saying I want X, the interest on top of that is the owners problem, it’s not why he is requesting a certain amount of money. So if an owner tells Wilson, we want to front load your deal, of course he’d take it because he’s making more money. Which again, is exactly why an owner won’t submit to that theory in most cases.
Where is this interest coming from?
It refers to the time value of money concept. It’s exactly why clubs don’t front-load contracts – because as jessep notes – it actually costs them more money.
Google it to get a better/clearer explanation but in short it says that if you pay $22m in year one instead of $12m in year one – you are losing the interest you would have earned on the $10m difference.
Either you have the extra $10m in cash or you have to borrow the extra $10m to pay the contract. If you have $10m in cash lying around you’re going to invest it and get a return – if you pay the player that $10m that year you don’t get to invest it.
If you don’t have the $10m lying around you have to borrow it. If you have to borrow it you have to pay interest on it. Same effect. Front loaded contracts cost more money than backloaded ones.
Exactly cpsins. And we can say “so what its only x million” but if you take a step back and think about it realistically, it’s not a smart business move. Specifically when you can get the player on a backloaded deal or level deal anyway.
What do you mean metsguppy? There is interest paid on every contract unless it is specifically stated in the contract that 0 interest will be paid.
What interest are you talking about? You are confusing a backloaded contract with a contract with deferred payments. There is no interest paid on any years of a multi-year contract as the players accrues each year he earns exactly what the contract he agreed to states plus any incentive or award bonuses that were included.
The only time a player receives interest is if he agrees to defer part of any year of his salary whether it’s deferred for 2 years or 20 years.
What this post is talking about is offering players a backloaded contract which is not a bad idea.
And another thing, why are you paying the player interest on the amount he was already paid anyway? Sounds like fuzzy math to me.
RC – it’s not interest paid to the player – it’s either an opportunity cost lost interest or interest paid if you have to borrow the money to pay the player. I give a little more detailed explanation a couple posts above yours – I think we cross-posted. It’s a little hard to understand but it’s real – otherwise front-loaded contracts would be more popular.
But you are assuming the team has to borrow the money they are frontloading in the first year. Lets take the Mets as an example. Lets assume the reports are correct and the Wilpons are committing $110 in payroll for 2012. Lets assume that with the $22 million first year salary for Wilson they still come under $110 million. I still dont see this interest you are talking about.
And if all contract money is borrowed and the interest is 5% of $110 overall payroll, what difference does it make if player A makes 5 million and Player B makes 20 million if it all adds up to $110MM and it’s a 5% interest anyway?
Let’s assume – as you suggest – that they don’t need to borrow the $10m difference. That must mean they’ve got $10m cash lying around. What do they do with that? They invest it in a way that earns them interest. Or they put it into more payroll under the assumption that the team will be better, attendance will be higher and they’ll generate more revenues. Either way that extra $10m is going to earn them more of a return in year one by either being invested in a bank or another player than if it all goes into the pocket of CJ Wilson. That’s a lost opportunity cost.
So if they have to borrow the $10m they obviously pay interest to the bank, if they have the cash they lose the chance to earn interest or a return on the $10m. Same difference. Remember the Mets already have an outstanding loan of $25m to the commissioner’s office and they’re trying to raise $200m from investors – to assume they already have the cash for this kind of stuff seems like a huge leap of faith.
By the way I meant to say front loaded instead of backloaded in my last comments.
Reality Check: With respect, you are wrong.
First, this post is recommending offering players a FRONT loaded contract. A BACK loaded contract is a process done by many teams. Why? because it saves them $.
Second, interest is an assumption made. And we’re speaking in hypotheticals about why teams do not front load
From 2005
The Associated Press released the details of the contract that Carlos Beltran signed on Monday:
January 11, 2005: $7,000,000
2005-$10 million + $2,000,000 signing bonus
2006-$12 million + $2,000,000 signing bonus
2007-$12 million
2008-$18.5 million, ($8.5 million deferred)*
2009-$18.5 million, ($8.5 million deferred)*
2010-$18.5 million, ($8.5 million deferred)*
2011-$18.5 million, ($8.5 million deferred)*
Award bonuses
MVP-$500,000
Second MVP-$1 million
Third MVP and all MVPs thereafter-$1.5 million
MVP 2nd through 5th place-$200,000
All-Star-$100,000
Most All-Star votes in league-$100,000
Postseason All-Star or player of the year-$100,000
World Series MVP-$250,000
League championship series MVP-$150,000
Gold Glove-$100,000
Silver Slugger-$100,000
Hank Aaron Award-$100,000
Perks
Best available 15-person luxury suite for all home games
Beltran received $7,000,000 up front the moment MLB approved his contract and in guaranteed money will make $12 million in 2005 and $14 million in 2006. A total of $34 million of the $119 million will come in deferred money thats accrues a 1.17 percent compunded interest.
—
I guess what I am saying is interest isn’t written in each contract. That aspect you are correct.
But when the owner has $80mil in the bank, if he gives up less early on, he can make back interest off the balance, if that makes sense?
if he gives up more, then he will have less money in which to earn interest.
As I cited in my original post along with my addendum that I meant frontloaded NOT backloaded, interest is only on deferred payments. Beltran is not a good example. Give me R.A Dickey or a Carrasco example.
The Yankees are run by some sharp businessmen, explain this then:
Alex Rodriguez – 09:$32M, 10:$32M, 11:$31M, 12:$29M, 13:$28M, 14:$25M, 15:$21M, 16:$20M, 17:$20M
I don’t know but I’d guess there’s some accounting reason it makes sense for them in that instance. It might have to do with their wanting to even out luxury tax payments – their level of luxury tax hits is a dynamic no other club has to worry about.
But you use the example of ARod but you ignore Jeter, Rivera, Texeira, Sabathia, Burnett etc. they all either escalate or are even as the contract continues. ARod is the exception.
If you wanted to buy my car for $5k and I said you could either give me $5k now or $1k a year for 5 years – which is the better deal for you? You get to earn interest on $4k if you don’t pay me up front. Same thing here.
The reason is quite obvious
They know he was not going to put up the same numbers in the later years of his contract and probably even surmised that A-Rod might not even still be in baseball by that time!
You guys are thinking they will pay the entire contract anyway cause they can pay part of his salary in a trade.
But Backloading means no payout for someone else’s player if you trade him, and his low salary makes him easier to trade!
If you don’t think ARod’s contract was a special circumstance than why is C.C. (assuming no opt out) making $23m annual thru 2015, why is Tex’s contract backloaded, why is Jeter’s salary 15m, then 16m, then 17m, why was Posada’s contract balanced through the length of the deal?
What did the yankees just forget what a great idea “front loading” was? Or was ARod’s contract such a unique situation based on his previous contract, that with the inclusion of $6m HR bonuses the contract isn’t as frontloaded as it appears?
ARod still has $30mil outstanding in HR bonuses for 660, 714, 755, HR Record… which are records if he hits, he won’t hit until the later years of his contract thus making them much closer to a balanced payout per year
Why does he have an OPT OUT clause he is about to excercize?
If you knew the player was going to be able to OPT OUT of a contract then YES you would be stupid to frontload a contract where you might not get the CHEAP YEARS of!
Reality Check: It’s a valid but RARE instance as I said above that this would happen. The Yankees didn’t do this with others for a reason. The drastic $ associated with ARod’s deal forced the Yankees hand here. They don’t want to be paying a 40 year old $25+ mil. It would be a PR nightmare.
Comparing ARods deal is comparing a rare contract with a pedestrian one.
You’re also forgetting this perk in his contract which will eventually bump up his yearly salary
$30M marketing agreement based on home run milestones ($6M each for reaching 660, 714, 755 and tying and breaking major league HR record)
More COMMITTED ASSUMPTIONS!
Your whole point hinges on 5% interest rates which no one gets unless they are invested in a PONZI scheme (which is prob why the mets have not done it to date) and if thats the return you could get then why don’t the players INSIST on getting it front loaded so they can collect 5% interest longer because they get more up front?
Truth is it doesn’t mean squat to the team. If they are spending that kind of money they obviously have it to spend and front loading is no different than paying higher than your supposed to on your mortgage or car payments, reducing the interest and principle while you are flush with cash.
No different than if you were buying a house which is better in the long run?
Paying it all in cash up front or paying a Mortgage for 30 years which means your paying even MORE interest because you did not just pay the price and be done with it!
Now your next purchase is not influenced by your previous!
And should that player get trashed and is unusable to tradeable it’s far easier to walk away from 10 Mil than it is to walk away from 20 Mil!
At least the money you paid early was paid in years where the player actually did play for you!
In theory, this is correct. But, if you have a set amount, and are going to invest the whole thing into a ball club, then you really aren’t going to have anything to sit an earn interest anyway.
Overall, Frontloading/Backloading really mean nothing. if you sign 1 major signing each year for 5 years, be it frontloading or backloading the contracts, it spreads out the big money so that you are (in theory and in contract structure) not paying top dollar for all 5 signings you have done. now, if you backload the first 3 big names you sign and then front load the last 2, you’ll be in a heap of financial mess as you’ll be paying top dollar for multiple guys at the same time. So really, you either get into the philosophy of frontloading all your contracts, or backloading all your contracts.
Jessep,
I think it’s a moral victory to see that you at least agree with me as a fan, so you can understand where I’m coming from.
Front-loaded deals are NOT owner friendly and I don’t think I can make an argument for them to be owner friendly.
I do however think there’s a miscommunication between all of us – based on this interest thing. I wrote the article with the mindset of the poster “Reality Check” in mind: There is no interest on contracts unless they have deferred payments.
Now, the concept of the owner having x amount in the bank and by paying more now, he loses that money in terms of being able to make interest on it. I understand that.
In terms of creating a more successful team (by means of free agency), however, which should bring in more revenue, front loading would work out better because in the back years of a contract, we can cut bait on a player who’s wasting a roster spot (and if he’s pitching/hitting well, we can keep him in a diminished role.)
“In terms of creating a more successful team (by means of free agency), however, which should bring in more revenue, front loading would work out better because in the back years of a contract, we can cut bait on a player who’s wasting a roster spot (and if he’s pitching/hitting well, we can keep him in a diminished role.)”
The only problem is that you don’t “bring in more revenue” front loading a contract. You’re saying you’ll have a better financial situation in 3-5 years BUT you’ll have a much worse one now. And a much worse one now means less ability to improve next year unless that one player is the whole reason you go from being below .500 to the playoffs.
That extra $10m that you backload will either earn you interest making CJ Wilson cheaper or turn into another player or two. Assuming you have good talent evaluation that means more wins now is how you generate more revenue. Can anyone really argue you’d rather have CJ Wilson now on a front-loaded deal than CJ Wilson and 2 other $5m players now?
More wins now mean more revenue now. More revenue now means your projections for revenue next year are higher which means more money to spend later.
Plus the Mets already owe MLB $25m and are passing the hat for another $200m in investor money – they ARE paying interest on every marginal expense. That’s a fact.
Sorry for butting in guys, but I have a question. If all teams typically take bank loans to pay their teams payroll, why was it such a big national sports story when the Dodgers took a bank loan to pay their payroll?
Kevin – we’re not saying teams typically take out bank loans. But the Mets do have a $25m loan right now from mlb. I doubt it’s interest free. And they’re trying to raise $200m from investors. But even if you have cash, you want to earn interest on it now instead of giving it to a player so the player can earn interest on it now. That’s why it makes better business sense to backload.
As jessep noted elsewhere the financials are completely different if you are in a salary cap league like the NHL or NFL.
Cspins is hitting the nail on the head. I don’t have a financial background, I only know of this based on conversations with folks in the agent business. But he’s right. He’s explaining it perfectly. It’s all about economics of running a business.
We have the front loaded idea mostly because of the NHL. If the MLB operated under a strict salary cap, this would be a totally different conversation.
good post.
Well Cspins I know you say otherwise but the truth of the matter is that when The Mets signed Beltran and Pedro they were selling out early in the season before they had won anything of consequence!
NEW STARS inspire people to buy season tickets!
Season Tickets inspire people to go to more games because they paid for them and might as well get their money’s worth!
Going to more games has a snowball affect on everything else, Merchandising, Food, Parking everything you spend on at a game aside from the actual Ticket!
And by backloading the Salary wanes as the Fan Excitement does!
Unless they DO start winning and that player REMAINS a big draw!
And when that happens there is money freed up to pay someone else you might need to win even more!
Yes it is a business. The ENTERTAINMENT Business!
It’s goal is to DRAW PEOPLE!
It needs STAR POWER to draw them (Take the A’s from the 90′s as an example, they won and still no one showed!)
Winning when it does draw is largely because your wins are CREATING (or CREATED BY) NEW STARS!
Without star power no one will bother to go!
Who would go to see Metallica if James Hetfield wasn’t going to be doing the singing?
Who would go see the Stones if Mick Jagger wasn’t going to be there!
The music would be the same but the draw would be very different!
And frontloading while it is risky to do if your team is horrible or that guy is not star enough to offset early extra money your paying (read: Jason Bay), Still makes a lot more sense because your putting the money into the years he is still part of the draw! and most likely worth the extra money to give you flexibility should he decline or need some help by hiring another star!
You’re telling us it makes more financial sense to do something that people with tons of money and smarter people handling that money do not do.
I can’t even fathom why you’re on a soapbox about this. What in the world would make you think that you know what is the best way to spend money to make money than owners of an MLB team?
You think John Henry is coming onto MMO and saying “you know that Metsie guy is right” so he calls his financial planner and says “I want to spend more than I have to on my baseball team!”
I mean you’re just arguing to argue. You’re wrong. If you were right, you’d see every single team frontloading contracts. Why don’t you?
Because it is not a smart financial move.
They are selling popcorn whether they pay Jason Bay 10mil in year one or 20mil in year one. It’s about outside revenue.
A baseball owner owns his team because he has success OUTSIDE of baseball.
it’s done in sports all the time dude!
Mostly for leagues with Salary caps who want to be able to cut a player later on without Cap Ramifications!
They do it in Football and Hockey because both are a hell of a lot more physical than baseball and the risk of not making it to the end of the contract is greater!
They don’t do it that often in Baseball because baseball business moves at a snails pace compared to others!
In fact if not for the TV money they get they would have gone broke with thier business practices years ago!
And you skip right over the other advantages that are inherent with front loading.
It gives the team some leverage to re-negotiate a contract towards the end for a player who still seems worth paying!
And I know you like to think that I would not know financial planning so well but the truth is my clients give me millions to manage during the course of building their stuidios and the only ones who ever go out of business are the ones who COUNT on making money later so defer their bill payments and then can’t make the money they THOUGHT they would and have to go out of business!
The BEST and SMARTEST businessmen make payments they can afford to pay RIGHT AWAY!
No Debt, No Interest, NO RISK!
If you need to make a 105 Mil payment you make it NOW, Cause who knows what the economy or sales is going to be in the future!
But I doubt you have ever dealt with a budget of 10 Mil!
I have!
You are starting to prove you have absolutely no idea what you’re talking about Metsie.
“it’s done in sports all the time dude! Mostly for leagues with Salary caps who want to be able to cut a player later on without Cap Ramifications!”
Mostly for leagues with salary caps? Tell you what. MLB, NFL, NBA, NHL… can you please go find me the sport amongst them without a salary cap?
Oh just MLB? You don’t say. Weird.
Comparing financial practices in MLB to NFL, NHL, NBA is totally wrong. They aren’t even in the same ballpark.
they do it in football and hockey to cirumvent the cap. In the NHL they sign guys to 9-15 year deals just to circumvent the cap, so that they can get a guy to come join their team today… play within the rules and then just pay him small salaries when he’s doing nothing.
This doesn’t even come close to comparing to MLB.
You’re just begging to find a way to be right, when it’s clear you’re wrong. It’s okay to not be the smartest guy in the room, unfortunately for you that seems to happen once you turn the knob.
You’re honestly telling me that you tell your “clients” to spend MORE on something today that they can have for LESS today? Which you then tell them “sorry you can’t invest in xx because you spent too much on the property you could have had for less”
Are you even reading things before you type them?
If it is the wisest financial move to front load MLB contracts then please tell me why 30 men who fart more money than you’ll see in your life do not do it with every single contract they sign?
Seriously, tell me why not? Are they not as smart as you? Are their financial advisors wrong?
You should write up your proposal and send it to the Wilpon’s. You know what they’d say? “We’d rather take our chances with Madoff again, thanks”
Yeah thats kind of what I expect from you…It’s your standard answer when you can’t deal with whats in a post!
And you call me out for lack of class?
A-Rod has a frontloaded contract doesn’t he?
Down to 29!
I bet if we look it’s done a lot more than you know but your whole debating skill consists of Make up something (true or not) and hope the data isn’t found to prove you wrong, and when it is call someone crazy and ignore the data!
Done with you!
You been exposed way too many times to have any credibility anymore!
I love how you can’t even admit you’re wrong.
If you can’t see ARod’s contract as being a huge exeption to the rule then you’re just trying to instigate fights. Again, if its such a smart way to do every contract why didn’t the Yanks do it with every other one.
Or was it a way to ensure a guy who was the best player in the game didn’t leave and to somehow add enough incentives to the back end that it comes close to balancing out?
Again, you write up a financial plan where you tell a guy with more money than he knows what to do with that you’d like him to spend 25mil today on something he can spend 15mil on today, and invest the other 10 somewhere else and see where it takes you.
Why should I admit something that isn’t true?
I’m not you!
PROVE I’m wrong!
If it’s such a HORRIBLE business move as you suggest why would they MAKE an exception at all?
Huh?
Another attempt at proof by commitment from you, no hard fact!
You have a THEORY you can’t prove and if no one else buys it based on the data (that says they DO IT) they are either crazy or WRONG because of how COMMITED you are!
Do you know what they do to REAL CRAZY people?
They have them COMMITTED!
So the only way to get you to shut up is to prove your wrong that an owner would rather keep $5 in his pocket after buying the same product than keep $2 in his pocket after buying that product?
You really need PROOF of this?
You also need PROOF that spending MORE now for something you can have for LESS *without* paying a luxury tax penalty is a bad idea?
Every single contract is different in some way shape or form but the FACT is, MLB owners prefer by an incredibly large margin backloading or balanced payments over front loading.
If you front load a contract today, you have less to spend today. If you back load a contract today, you have years to make up the money you’ll need to earn to pay for the later years.
If the Mets have $120m to spend on their team. And you can sign CJ Wilson for either 15m this year, and backload his deal OR pay him $20m this year and front load it… why in the WORLD would you frontload?
Seriously, why aren’t you grasping simple economics? If you do what you say you do, you understand time value of money right?
If you need me to show you mathematical proof that frontloading isn’t the best way for an MLB owner to spend their budget then yu’re either a)not very good at your job or b) arguing to argue.
You need proof that owners would prefer to backload big contracts? Here Top 5 new contracts since 2006.
Carl Crawford 14/19.5/20/20.25/20.5/20.75/21 Backload.
Jayson Werth 10/13/16/20/21/21/21 Backload.
Cliff Lee 11/21.5/25/25/25/27.5 Backload.
Adrian Beltre 14/15/16/17/18/16 option Backload.
Adam Dunn 12/14/15/15 Backload.
Matt Holliday 17m Balanced.
John Lackey 18/15.25/15.25/15.25/15.25 Front loaded.
Jason Bay 6.5/16/16/16/17 Backload.
Chone Figgins 8/9/9/8/9option. We’ll call this balanced.
Aroldis Chapman 1/1/2/2/3/5 Backload.
Mark Teixeira 20/20/22.5 6 years Backload.
CC Sabathia 14/23m for years. Backload.
AJ Burnett 16.5m Balanced.
Derek Lowe 15m Balanced.
Ryan Dempster 8/12.5/13.5/14 Backload.
Alex Rodriguez 27/32/32/31/29/28/25/21/20/20 Front load.
Torii Hunter 15/17.5/18/18/18 Backload.
Aaron Rowand 9.6/9.6/13.6/13.6/12 Backload.
Jorge Posada 13.1m Balanced.
Carlos Silva 8.25/12.25/12.75/11.5/12m option Backload.
Alfonso Soriano 9/13/16/18 for 4 years. Backload.
Barry Zito 10/14.5/18.5/18.5/18.5/19/20/18 option Backload.
Carlos Lee 11/12/18.5/18.5/18.5/18.5 Backload.
Aramis Ramirez 8/14/15.65/15.75/14.6/16 Backload.
JD Drew 14m Balanced.
So you hang on to ARod’s incentive filled contract which could turn his contract into more of a balanced one or John Lackey’s which was done so the Red Sox could be competitors for Jason Bay… and I’ll hang onto… everybody else and proof that front loading deals in MLB are not what owners want to do. How do I know that? If it was such a great idea, every single one of those deals would be front loaded. Every one.
I’m done with you, I can get a brick wall to agree that it would rather keep $5 than keep $2 while getting the same paint.
There are merits to both sides and I’m quite sure the luxury tax is as good as gone in the new CBA. Too many arguments ensue because one side is always trying to convert the other side to their beliefs. I wish everyone would just talk about the 90% we all agree on instead of arguing about the 10% we don’t agree on and never will.
Well obviously since they DO do it and frontload contracts! You showed examples of something you CLAIM that THEY WOULD NEVER DO!
Yet they did it didn’t they?
This is what you do all the time!
Use absoloutes as arguing points and when examples of your absoloute being not so absoloute you go onto the YOUR CRAZY rant!
It’s tired jessup…REALLY!
And INSISTING on a point you yourself offer the evidence to prove you wrong is not helping your credibility in the COMMITTED department!
Joe I sure am not trying to convert anyone just answering someone who thinks the world is BLACK and WHITE, takes Black and calls the White side CRAZY!
There is MUCH MORE to meaningful debate than just calling the other side crazy!
And running off in a huff because facts shown (by the poster who believes the opposite of those facts) do not support their position and the other side doesn’t just take the fake bait and run is sort of why these arguments keep on going beyond the post they started in!
You you I find and research shows that it is the people who CLAIM to be sane all the time that are actually the CRAZIEST!
Excuse me but what you say yesterday does not jive with what you say today!
“You’re telling us it makes more financial sense to do something that people with tons of money and smarter people handling that money do not do. ”
“DO NOT DO” YOU SAID!
Then when onto cite examples where they do it!
Will you at least admit you were wrong for saying they DO NOT DO it?
Can you at least show THAT MUCH class instead of the Your Crazy act which is as stale as the old Knock Knock jokes from the age of vaudville?
Consistency of belief, position and FACT have NEVER been your forte!
You change positions at whim and when you get boxed in you run to the INSANITY DEFENSE or ignore it hoping what isn’t acknowledged can’t hurt you mentality!!
And if you insist on a timeline you said that at 9:53AM!
TODAY!
What a difference a day makes in your SANE world!
Actually Metsie. My very 1st response at 1:46 yesterday stated and I quote
“This is exactly why you rarely will see a MLB team front-load a contract”
which totally proves you saying “you CLAIM that THEY WOULD NEVER DO!” is a lie.
So of the 25 highest paid free agent contracts over the last 5 off-seasons. Exactly 2 of them were front loaded. Thus 8% of the highest paid contracts were front loaded.
Some would call that “rare”
By the way 68% of them were backloaded.
Satish just to be clear, I was talking of interest in a hypothetical sense. If you’re an owner, you’re looking at every mlb contract with a loss or gain of interest. You’re thinking okay if I have 100 to spend, he’ll let me pay him 15 in year 1 which lets me invest now and earn interest so that in year 5 of his deal, perhaps I’ve earned enough $ to cover the lost salary.
I didn’t mean to say every year CJ Wilson gets X amount in interest. I meant the contract will have inherited interest lost that could be gained by an owner.
Remember Satish, your money is worth more today than it will be later. So why pay a guy $20mil today, when you can pay him $15mil today and invest $5mil?
I don’t know if all my comments are being held in moderation or something right now, but I replied to you. Odd.
Did you tell me to F off or something lol
I’ll check this evening… again I want to be clear. As a player it makes sense. As an agent it makes sense. As a fan it makes sense.
As a guy who writes the checks, it is not in their best interest at all. (no pun intended with use of word interest)
And at the end of the day, it’s about their checkbook.
Lol no, I think I just posted a lot of comments within the same time frame.
I had a reply written out to cpins about Sabathia, because he said that if that one player could make a playoff team out of a sub-.500 team front-loading might make sense.
At this point I forgot a lot of what I was saying, maybe it’ll magically post itself later on.
I get that it’s not in the owner’s best interest and that’s probably the best answer as to why we don’t see this used often. However, just a thought from the outside looking in, is that if we had front-loaded the contracts of guys like Bay/Santana when we didn’t have much payroll restriction, we could’ve been in a better position now.
That may not be true though. If the Mets have financial problems now, where would they be if they weren’t able to invest more $ at the start of those deals?
Granted, if we’re using hindsight we can say maybe they would have invested with Madoff but that’s not really a fair use of hindsight.
If they frontloaded Bay for example, they’d have less money to spend then they do today in theory because they were investing less.
I don’t know if we can say either thing for sure, actually, because the reason we have so little money to spend today is based on the Wilpons’ restriction.
We can’t assume if it’s because he doesn’t have the amount of money he desires to allow us to spend more, or he just decided to try and increase his profit margin, you know?
No, the reason “we have so little money to spend” is because when their checkbook was open from 06-08, it didn’t produce a championship. It didn’t prove to be a method that wins titles. So now on top of the Madoff thing, they are paying for their financial mistakes.
Oh please! More crap!
There is NOTHING about that spending in 06-08 that stops us from spending now!
It didn’t produce a championship!
Would have if they spent enough and got the Ace they should have gotten in 2007!
You say Spending doesn’t win titles so I guess the yankees are just figment of everyone’s imagination right?
You know it takes a lot more that just being committed to prove a point!
How many Playoffs and WS wins compared to those teams you listed in the last 17 years Jessup?
Or is this where you call me a loon and ignore me because if you show the data I’m asking for you know you will have to conceed the point?
It should also be noted that oakland who you deem a successful team didn’t show up on your list NOR will they show up on mine if you are man enough to provide it for all to see!
But we know you tend to ignore challenges when you know they will blow your cover and expose what you say as wrong!
Oh and a house can be built with toothpick too!
Good Idea? You seem to suggest it is!
Yeah it works for you Donal and WHo though doesn’t it?
More Double Standards from you I see!
No I was asking you to list how many Playoffs and WS wins those teams you listed (Yanks were in there) over the past 17 years!
You see you name a lot of one offs and cut off the dates right around the time the Yanks win most of their WS’
It’s a typical tactic of yours just show enough to make the lie and discard all the data that will be used against you!
You would be better to follow Miranda in those cases and take the right to remain silent because you now opened the WORM CAN about who was actually more successful for the longest period of time and how much they spend to do it!
“You say Spending doesn’t win titles so I guess the yankees are just figment of everyone’s imagination right?”
They are a figment of your imagination if you think the money they have spent has won them titles?
Since 2000…
$107,588,459.00 Yanks 00
$85,508,000.00 Dbacks 01
$61,721,667.00 Angels 02
$45,050,000.00 Marlins 03
$127,298,500.00 Red Sox 04
$75,178,000.00 White Sox 05
$88,891,371.00 Cards 06
$143,023,214.00 Red Sox 07
$98,269,880.00 Phils 08
$201,449,189.00 Yanks 09
$96,277,833.00 Giants 10
That’s an average of $102,750,555.73 per championship team in the last 11 years.
I’m not an advocate of the Mets spending like the Marlins, I’m an advocate for spending wisely and think it’s ridiculous when somebody tells me that a championship can’t be built with 100mil payroll.
See when you question people’s manhood over baseball stats, that’s when you look like a sad person.
Are you asking me to provide you with playoff appearances per payroll? You said “win titles” therefore I produced for you the last 11 championship teams and what they spent. What do you want now? Division titles? Wildcard titles? Which ones?
Which stat do you want to adjust to fit your argument so you can sleep at night?
Yawn…Just more posting you claim to despise when it’s done to you!
No you don’t question manhood just tell everyone they are crazy for not buying into your made up crap!
COMMITMENT is not a replacement for FACTS!
When facts are presented you call them crazy!
When they go against your position you hide and ignore them if the YOUR CRAZY act doesn’t work!
You want class Jessup start showing some!
Not your old and tired YOUR NUTS debating tactics whenever facts are showed you can’t seem to deal with!
Want to impress me?
NAME the UNDERVALUED STAT your vast knowledge of Sabermetrics leads you to believe can be found!
Silly me for thinking the Mets do not compete with the Yankees for a playoff spot. I’ll have to go back and study my National League standings again.
I’d love to see where I question yours or anybody’s “manhood” over baseball stats. Please provide quotes with dates and times if you can, thanks.
By the way a casual hockey fan may respond to me by asking why hockey players are getting front loaded deals then?
The answer is 2 fold
A) Nobody ever accused hockey owners of being good businessmen
B) (more seriously) its being done to circumvent the salary cap. Which is why some NHL owners are trying to eliminate it. It’s not because they want to save their opponents $ it is because the only reason they do it is so they can play within the budget given to them by the league and accumulate the most talent within that budget.
Where do you get 5% as an interest rate?
No one gets that!
Uncle Bernie.
Madoff…
backloading is like leasing a car when you have no money in the bank. it lets you get something you can’t really afford right now, by pushing the day or reckoning out a few years!
Not really very much alike. A leased car doesn’t help you generate revenue. An ace, a 40 HR guy, a stud closer – if properly evaluated – can make your team win more games than the year before which almost always leads to better attendance which means more revenue. And if he’s enough to put you into the playoff’s the revenue increase is even more dramatic.
I agree to you cpins. I think they should use a contract reminders program.
Metsie… since you can never be clear about what you want to say… you came at me for thinking spending doesn’t win titles. Then when I showed you the average championship team since 2000 spent an average of $102,750,555.73 on their roster which includes a $201m payroll Yanks 09 team which drastically bumps the number.
So since that wasn’t good enough, here. The last time I checked the Mets play in the NL. Therefore the playoff teams in the NL are the best way to measure success for the Mets and how to achieve it.
2000
Cards $63,900,000.00
Braves $82,700,000.00
Mets $79,800,000.00
Giants $53,541,000.00
$69,985,250.00
2001
Dbacks $85,508,000.00
Braves $91,936,167.00
Astros $60,897,667.00
Cards $78,538,333.00
$79,220,041.75
2002
Giants $78,299,835.00
Cards $74,660,875.00
Braves $93,470,367.00
Dbacks $102,819,999.00
$87,312,769.00
2003
Marlins $45,050,000.00
Cubs $79,868,333.00
Giants $82,852,167.00
Braves $106,243,667.00
$78,503,541.75
2004
Cards $83,228,333.00
Astros $75,397,000.00
Dodgers $92,902,001.00
Braves $90,182,500.00
$85,427,458.50
2005
Astros $76,779,000.00
Cards $92,106,833.00
Padres $63,290,833.00
Braves $83,457,302.00
$78,908,492.00
2006
Cards $88,891,371.00
Mets $101,305,821.00
Dodgers $98,447,187.00
Padres $69,896,642.00
$89,635,255.25
2007
Rockies $54,424,000.00
Dbacks $52,067,546.00
Cubs $99,670,332.00
Phillies $89,428,213.00
$73,897,522.75
2008
Phillies $98,269,880.00
Dodgers $118,588,536.00
Cubs $118,345,833.00
Brewers $80,937,499.00
$104,035,437.00
2009
Phillies $113,004,046.00
Dodgers $100,414,592.00
Cards $88,528,409.00
Rockies $75,201,000.00
$94,287,011.75
2010
Giants $96,277,833.00
Phils $138,178,379.00
Reds $76,151,500.00
Braves $83,890,334.00
$98,624,511.50
2011
Cards $109,048,000.00
Brewers $83,590,833.00
Phillies $165,976,381.00
Dbacks $56,489,833.00
$103,776,261.75
Which means the average playoff team in the last twelve seasons in the NL has spent an average of $86mil on their team. So please spare me this idea that it’s proven that spending is the way to work. If the Mets had an $86mil payroll, yes I wouldn’t be pleased, but if they had a $110m payroll it wouldn’t be the end of the world or a sign of not trying to win.
So there you go. I gave you world series titles, division titles, wildcard titles. Which titles do you want next?
How about most $ spent without making the playoffs? Is there a title for that?
I VERY CLEAR jessup you jut FEIGN being confused so you can avoid answering the question you know is going to blow your theory out of the water!
And once I provide the answer you will simply deny my data based on some sense that I am crazy and ignore it because if you answer your bull will be exposed!
But here we go ANYWAY!
Last 17 years! Not just the last 10 which I know you would prefer to cherry pick!
Yanks 16 Playoffs 5 WS Wins 7 WS Appearances
Dbacks (Only been around since 98) 5 Playoffs 1 WS Win 1 WS Appearance
Angels 6 Playoffs, 1 WS Win 1 WS Appearance
Marlins 2 Playoffs 1 WS Wins 2 WS Appearance
Red Sox 9 Playoffs, 2 WS WIns 2 WS Appearances
White Sox 3 Playoffs, 1 WS Win 1 WS Appearance
Cards 9 Playoffs, 1 WS Win 3 WS Appearance (Incl this year maybe WS WIn goes up too!)
Phils 5 Playoffs, 1 WS Win 2 WS Appearances
Giants 5 Playoffs, 1 WS WIn 2 WS Appearances
You want to take that list and rank them based on how much they spent or correlate spending to to that data be my guest!
But I don’t really need to do that.
I see quite clearly ( I Know you won’t because to do so would admit I have made my point!) that the teams who spent the MOST have made the Playoffs and WS more and also WON MORE WS titles than all the ONE AND DONE NON-SPENDERS!
And most of those teams you listed who did win won in years where they were either a top spender or at least a median spender…
Note Oakland with all it’s success never made the list You want to add their data, again BE MY GUEST!
Now go and change the subject or feign not understanding to avoid what I just posted!
Do what YOU do best!
Which when confronted is usually to call me crazy, feign lack of understanding of the concept BECAUSE it’s crazy, or simply ignore it so that no one else sees it via email notification and catch you when your down!
Let the RECORD show that Jessup who posted a reply (another YOUR SO CRAZY I MUST BE RIGHT) post in a reply thread above this one, avoided the above post like it was RADIOCTIVE!
Tell me I am crazy for posting that data Jessup!
Tell me how those numbers are the product of a sick and demented mind not just stats taken from team records so they can be ignored!
Tell us all how the data above makes YOUR POINT about the success of NOT SPENDING!
Tell us all WHO of the non spenders were a better team the last 17 years than the guys who spent the MOST!
PLEASE tell us how these FACTS are NOT FACTS and why you chose to get out of the conversation at the first sign of statistical trouble?
You said “…the teams who spent the MOST have made the Playoffs and WS more and also WON MORE WS titles than all the ONE AND DONE NON-SPENDERS!”
My opinion continues to be that it is not about spending the most but spending the wisest. Looking at our Mets is why I believe that. I went ahead and ranked the top 10 payrolls over the last 16 years (1995-2010) stopping at 1995 cause 1994 was the strike year and I didn’t want to skip a year. I don’t know how going back over the most recent 10 years can be considered cherry picking but never the less I went back 16 years.
I agree that often times the top 10 teams in payroll reach the postseason but much of that has to do with 3 teams. The Yankees, Red Sox and Braves.
You can disagree if you wish but the Yankees are simply the exception to the rule in all this. They are at a whole other level that no team in baseball has been able to yet match. They have been in the top 10 of payroll for 16 years straight and missed the postseason once.
The Red Sox over the last 16 years 14 times have been in the top 10 of payroll reaching the playoffs 8 times.
The Braves over the last 16 years 13 times have been in the top 10 of payroll reaching the playoffs 11 times.
Well done by the Braves you would say but to say it was due to spending would be but a partial truth.
It’s not abound spending the most or else how do you explain the Mets?
The New York Mets over last 16 years 13 times have been in the top 10 of payroll reaching the playoffs all of 3 times. In fact more times than not the teams that have reached the top 10 in payroll have not reached the playoffs.
Dodgers over last 16 years when in Top 10 in MLB Payroll.
out of 10 Times reached playoffs 4 times.
Cubs over last 16 years when in Top 10 in MLB Payroll.
out of 9 Times reached playoffs 3 times.
Indians over last 16 years when in Top 10 in MLB Payroll.
out of 8 Times reached playoffs 6 times.
Rangers over last 16 years when in Top 10 in MLB Payroll.
out of 8 Times reached playoffs 3 times.
Mariners over last 16 years when in Top 10 in MLB Payroll.
out of 8 Times reached playoffs 0 times.
Angels over last 16 years when in Top 10 in MLB Payroll.
out of 7 Times reached playoffs 5 times.
Cardinals over last 16 years when in Top 10 in MLB Payroll.
out of 7 Times reached playoffs 4 times.
Giants over last 16 years when in Top 10 in MLB Payroll.
out of 7 Times reached playoffs 3 times.
Orioles over last 16 years when in Top 10 in MLB Payroll.
out of 7 Times reached playoffs 2 times.
White Sox over last 16 years when in Top 10 in MLB Payroll.
out of 7 Times reached playoffs 1 times.
Also 5 of the last 9 teams to win the W.S. were not even in the top 10. Which will soon be 6 of the last 10 since Texas and St Louis also did not rank in the top 10 according to USAToday.
I write all this not to say your necessarily wrong Metsie about spending but that outside of a few teams in MLB spending the most more times than not doesn’t get teams into the playoffs.
http://docs.google.com/spreadsheet/pub?hl=en_US&hl=en_US&key=0ApxE2V-jZhJHdDhFdFJZakctUnAzWDVlOGJwcUE5dlE&output=html
It’s not even about spending the wisest MNJ, It’s about building the wisest!
It’s about evaluating the wisest! and not limiting yourself by forcing yourself to do just one thing or the other in order to succeed! When you find and build in way that lets you do both you will CONSISTENTLY win and for much longer than the typical 3 or 4 year run the NON-SPENDERS get.
The low salary teams won because they built it the long hard way. Giants for example (Who I consider median spenders) developed the pitching that carried them through.
Unfortunatly that BUILDING via minors can not be maintained for very long!
And the time comes when the developed track can not meet the demand anymore which is why those who refuse to spend usually get 2 or 3 years and then have to start over! This is MOSYLY due to the fact that they lose a lot get very high draft picks for 4 or 5+ years and then when those picks start winning for them they no longer have the conditions (High Draft slot) to get the same quality of talent that got them there!
They are stuck with the cyclical nature of the bad get first crack at talent that once you have it and win with it can not be maintained!
Spending isn’t the ONLY Way to win building IS important, but once you have built you need to spend to maintain it because your not going to get at the talent in the draft anymore!
The braves built then spent to keep it!
The Yankees are the prime example fo that!
If those old guys hold the Phillies will do it now!
And while some median spending will win in a short series (making them better at the time) if all we are talking about is getting into the playoffs where anything can happen (a common excuse given by the non spenders) the record shows that those who spend more get in more and for longer and somewhere along the way win a few more WS titles than anyone else!
I am all for those (including Tag) who want to focus on the BUILDING side of it because it is a component to success!
But it is not the ONLY component and you can spend WHILE you do that!
But this DUMB NOTION that you need to save money,Not spend it UNTIL your ready to win something is pure folly!
That not spending money is a key to success because every now and then some team who doesn’t, happens to win one and done or makes a playoff without ever getting the title is a good way of thinking? HEll no!
Want proof look at 86!
We went and got good players via trade and Free Agency that were established, settled and ready to help those kids like Dykstra Backman, Gooden, Darling in the art of winning and fighting the way they did!
Similar to what the Yankees did in the years before 95!
Difference is they MAINTAINED it and we went and just stood pat and didn’t spend (exception McReynolds) to keep the train moving along the tracks!
It takes building to win yes! Thats the long part of the job!
it takes spending to maintain what you have built!
And maintain the success!
and I say we HAVE a lot of young kids who if anyone were less concerned with making Omar out the fool and more concerned with GIVING those kids a chance we might not have to wait until 2014 or beyond to win a WS without being the highest paid team in baseball either!
You know full well this HOW MUCH YOU PAY crap has nothing to do with who wins and losses WS’. This is about a PHILOSOPHY some want to see SOOOOOOOOOOOOOOOOOOOOOOO BADLY, that they need to make these statements to sell it on the public!
Doesn’t matter if it’s true only if people will buy into it and not throw a hissy fit when Reyes goes to the Phillies, Wright gets traded, and we are the pirates for 10 years!
Cause if they do BYE BYE Sandy! BYE BYE PHILOSOPHY!
Thats what all this WHO SPEND WHAT crap is all about!
This is the reason for mentioning that cheap teams win, (Not more however but actually LESS as I have showed!)
And this is why all of these battles are taking place on MMO!
Because there is a small group who wants to see the this philosophy they fell in love with retried here!
And god help anyone who dares get in their way!
Anyone who tries is crazy a loon or ignored when the facts are showed to expose the bull they are force feeding us!
“It’s not even about spending the wisest MNJ, It’s about building the wisest!
It’s about evaluating the wisest! and not limiting yourself by forcing yourself to do just one thing or the other in order to succeed!”
Exactly, evaluating, building but also spending wisely and whatever else we may be overlooking combined. All for the purpose of winning a World Series Title more than once every 25 years or so.
That is what it’s about for me.
The point is I have seen what spending has gotten the Mets and it hasn’t been much. So when you suggested “teams who spent the MOST have made the Playoffs and WS more…”, I wanted to be reply with what I did cause when it comes to the Mets and many other teams spending the most often times has paid off very little.
As far as philosophies go I know you have strong opinions on the matter and so do others it seems. Personally I wish people would take Joe D’s advice and focus on the 90% we do agree on and not the 10% we don’t but it doesn’t look like that will be happening anytime soon.
Hopefully a W.S. Ring can help put a squash to that.
Now that me and you seem to agree its about the build not the spend (which is part of building)
Why are we being sold this bill of good that spending wisely means not spending at all from the other side here?
You can build AND spend and do quite well!
Other than the desperation purchase of Bay Omar was actually doing that!
Maybe not as well as he could but he didn’t let the spend hurt the build.
Spending got the Mets a playoff appearance!
Like it or not considering where he started buying bought us that as it sure wasn’t Developed talent that got us there!
I’m not pushing one method or another. Note you have not seen me suggest one FA to go after yet!
I will say where we need improvement and look at what we need from OUR TEAM perspective which right now is resigning reyes.
A goiod Starting pitcher I feel is in order but I admit there isn’t much out there to buy but a trade might exist!
I have no desire to war with Jessup and never did before he started on his campaign to gut the payroll and get rid of every player we have that was worth a damn!
And to SELL it he keeps trashing the kids who even you have to admit did a pretty damn good job and could make us much closer WITH reyes than they would without!
I’m arguing against an AGENDA that has never worked!
Even the Red Sox were smart enough to buy WHILE they built.
And if long term winning is the goal then lets get to the point the Yankees were in 95 (we are pretty close to having 4 core kids now!) And make the playoffs 16 of the next 17 years, Win 5 of 7 WS appearances so we win so many games we never have to talk about cutting salary beause of the Wilpons again!
I don’t know who is selling you what but as far as I am concerned I just want to see the team built to win a Title.
Be it by spending, developing from within or trade how ever they deem best. How much they spend now opposed to down the road is not the focus but rather the focus that the decisions made or not made payoff in the next 2 to 4 years.
Minaya got 6 years I will give Alderson 3 to 5. Depending on how much real improvement I see or don’t see.
Clocks ticking…
And that MNJ is why me and you don’t find ourselves on opposite sides of a war! LOL
And probably never will!
We just want them to improve the team and if they don’t we set up the Gillotine and break out the yarn!
LOL
What about the teams that spent the least (bottom 10 in payroll last 16 years)?
They WERE listed…Just none made the list! LOL