too many back loaded contracts

[soxfan420]

y not pay players evenly thoughout there contracts instead of backloaded contracts i just dont understand, u have to pay them either way.

[Rex Hudler]

y not pay players evenly thoughout there contracts instead of backloaded contracts i just dont understand, u have to pay them either way.

If you signed players to one year deals, you would pay them more each year assuming they continued to perform at a high level, which you are expecting from someone you sign to a multi-year deal.

 

I don't think calling it backloading is accurate because all teams are trying to do is pay the players based on what they persceive their value will be each year based on their performance, years of service etc. Very few players in multi-year deals get paid evenly over the course of a contract unless they are superstars that have gone beyond the six-year free agency service time.

 

It is very common and actually an advantage to pay someone their true value each year rather than "frontload" the contract. If you pay them evenly, it will cause you payroll problems on the front end, by paying young players more than you need to and therefore restricting the budget for other players.

 

If this was not done, Mark Buehrle would be making $6 million this year. There is no way for one, the Sox could fit that into their budget and two, there is no need to pay Mark that much now. If they would have gone to arbitration with Mark, they could have likely only had to pay him roughly $3 million.

 

I don't think I am explaining it very well, but doing it that way is an advantage to the team based on the current system. Some teams are hurt a bit by certain contracts now because the market has changed. There was no way to predict 2-3 years ago that this would happen. Or at least not to the point of signing guys to smaller contracts then. They wouldn't have been able to sign them.

 

Does any of this make sense or am I rambling?

[Soxbadger]

Not to mention, inflation, interest rates, etc.

 

If you have a $30mil contract and pay $25 mil up front you only have $5 mil getting interest.

 

If you have $25mil getting interest, you make more money.

 

Also if the player is injured after getting the $25mil youd never be able recoup it in insurance.

 

Backloaded contracts are not just a baseball thing, they are a contract thing.

 

Frontloading contracts are to much of a risk, and would give the player much more power, also they can hold out after getting the money upfront and then you are even in more of a bind.

 

If we are going to bash the Sox, atleast do it for something that is stupid.

 

SB

[YASNY]

Not to mention, inflation, interest rates, etc.

 

If you have a $30mil contract and pay $25 mil up front you only have $5 mil getting interest.

 

If you have $25mil getting interest, you make more money.

 

Also if the player is injured after getting the $25mil youd never be able recoup it in insurance.

 

Backloaded contracts are not just a baseball thing, they are a contract thing.

 

Frontloading contracts are to much of a risk, and would give the player much more power, also they can hold out after getting the money upfront and then you are even in more of a bind.

 

If we are going to bash the Sox, atleast do it for something that is stupid.

 

SB

Interest only comes into the equation on deferred, as opposed to backloaded, money. If a signs a 3 year $24Million contract and gets paid $6M for year 1, then $8M, then $10M, there is no "interest" paid on the final $18M. That will be his salary for those years, which he won't receive until he in fact "earns" it.

 

I put "earns" in quotes because, we all know, sometimes they don't earn crap.