Update
- Scherzer's deal is valued at 7 years/$210million, however, the deal is structured in an odd fashion. Half of the $210 million is being deferred till after the 2021 season. Including in that $210m is also a $50m bonus payout. In reality the Nationals will be paying Scherzer $15m per season every year for the next 14 seasons! This is the largest deferral in MLB history, shattering the old record of Bobby Bonilla's $28.9million
SP Max Scherzer has signed a 7-year deal with the
Washington Nationals.
..................sigh...................
ReplyDeleteI think sighed is very appropriate
ReplyDeleteIf they trade Zimmerman to make this work - this isn't a huge upgrade - plus a 7 year contract on a 30 year old pitcher is not usually a good thing
ReplyDeleteThat being said - if they Zimmerman because of how the dealing is structured, that will suck for this year
But, even with the deal at 15 mill / yr - they will have to let some of their FA'S walk at the end of this year
Damn......
ReplyDelete$15m per season for 7 years that he WON'T be playing for the Nationals.....This makes the Bonilla deferral money look like chump change.
Wow
ReplyDeleteJust wow.
How does this affect Wilpon's financial committee?
I am still ........sighing. ....... Over the Wilpons/Alderson's Mets commitment to the Mets returning to prominence in:
2013.....
Then it was 2014......
Then ...2015....
Then .....2016.....
Now is it going to be 2019 factoring in Scherzer being dominant until then?
Or is it 2022 because the Nationals are committing until that time to justify the 7 year contract?
Or is it 2028 because the nationals are committing during all 14 years it will take to pay Scherzer?
Scary thoughts.
That is an INSANE contract.......according to ESPN, he will get 210 million dollars over the life of the contract (7 yrs) and then the deferred portion of the deal.
ReplyDeleteRegardless of how you cut it, that is 30 million per year! I am betting that the Nats will regret that deal by 2017 or 2018, like our ill-fated Santana contract.
That type of financial outlay signals that the Nats see 2015 as their best shot......they are talented, but they have some big FA decisions looming in 2016, so the team will slowly come back to the pack over time.
I also can't see investing that kind of coin into a 30 year old pitcher. Someone like Clayton Kershaw, maybe......but Mad Max?
THIS is why you need to have depth in the minor leagues and a pipeline of sorts, to support your roster over time. A team (unless you are the Dodgers) can't afford to pay multiple players that much money.
Imagine what Matt Harvey will command in a few years if he is healthy and hits FA?
It is also why we need to hold onto our depth and not make a depth robbing deal this offseason.
No, it is not $30 million per year.
ReplyDeleteIf you are familiar with finance, it is the present value of the amount that is most important.
The present value of the contract is 7 years / $180 million according to commentators.
$180 million - that is the key number.
Even 180 is A LOT of coin to plow into a 30 year old pitcher
ReplyDeleteThis contract structure was all about Boras being able to claim that he got his client the biggest pitching contract ever
Even at 15 mill a year for 7 years, this will prevent the Nats from retaining their key FA over the next few years
It is basically 2015 or bust for them
Lew
ReplyDeleteIt won't be necessarily bust after 2015 if the Nationals commit to paying more. Maybe they look at the next 3 years as their opportunity and accept paying more during that time.
The present day value versus actual value is primarily used to levy the appropriate luxury tax for the contract.
ReplyDeleteIt is still 210 million dollars, regardless of the "value" (which I understand, by the way).
In some ways, it hamstrings the team for longer then if they simply doled out the whole amount in seven years.
I would love to see a study done on these "second generation" contracts.......you know, the ones where a player gets compensated after their arbitration years are past. Most "stars" are paid as much for what they DID, as what they MIGHT do in the future (plus, the chances of an injury as a player ages goes up immensely).
I wouldn't be shocked if a large number of them are bad values......Johan Santana's was a train wreck, for example.
I think the Nats will end up regretting the deal, unless they can win a WS in the next two or three years.
Actually, that's 100% wrong Anonymous.
ReplyDeleteThe present day value versus actual value is NOT primarily used to levy the appropriate luxury tax for the contract.
If it is only $180 million present value, that means - because they don't have to pay Scherzer the money right away - they can set that money aside, invest it, and then pay him the principal later but keep the excess earned above and beyond the principal - think of something like an annuity.
Not sure where you got that idea that present value matters only for tax, but that certainly isn't correct.
Anonymous, this article says everything I could have said, only much better.
ReplyDeletehttp://www.fangraphs.com/blogs/max-scherzer-and-when-210-million-isnt-210-million/