Better ways to model future contracts

[cjandrze]

The problem with that scenario is no player or agent would ever take contract B. Who would agree to less now then later, especially knowing years 3 & 4 of that contract are likely not happening? So you get what the Ravens have done which is a low first year salary and a signing bonus to make up the cash value in the low salary years.

People take contract B all the time.

Crabtree just took contract B.

[Kyle Cactus]

The problem with that scenario is no player or agent would ever take contract B. Who would agree to less now then later, especially knowing years 3 & 4 of that contract are likely not happening? So you get what the Ravens have done which is a low first year salary and a signing bonus to make up the cash value in the low salary years.

I'd agree that a player might not take the exact same amount of money on a flat contract vs back-loaded. That's where the team has to do a cost-benefit analysis. Is a little extra money worth the benefit of being able to get rid of a lot of the money on the contract if you cut the player early? It depends how much money, how back-loaded, what's the likelihood of cutting a player after years x, y, and z ...

[Kyle Cactus]

One thing that should be a big goal for DeCosta and company moving forward is that the timing of signing our guys. Instead of letting guys (particularly first rounders) get to the end of their 5 year contracts and then begin negotiating, the FO needs to get ahead of contracts. If they can do this, they get ahead of the curve when it comes to matching similar contracts (CJ's impending deal and how Mychal Kendrick's deal).

It depends how much of a discount the player is willing to take. If they take a steep discount, and they're a player that's likely to be productive for a while, then it definitely makes sense to sign them early. But players often aren't willing to take a big discount to sign the next contract. If they're only willing to take a small to modest discount there are a handful of negatives for the team that that small discount has to balance out:
- The risk of the player getting hurt or losing value through poor performance in what would have been the last year of their rookie deal
- Giving up a year at the end of a players rookie deal where they may not have had to pay the player as much
- Surrendering a year where a player would have been highly motivated because they knew they were playing for a contract

The Ravens were willing to do a deal a year early for Flacco, but not at the level Flacco and his agent wanted. Maybe that's the case for some of these other players too. I think there's a point where it makes sense to sign a player early, but maybe most players would rather max out the next deal rather then take enough of a discount for the team to want to sign them early. It takes two to tango.

[BPF2]

People take contract B all the time.

Crabtree just took contract B.

If all you look at is salary, sure it's the same. But he got a $7 million signing bonus which is what I said. Look at the breakout from Ravor's contract page. He gets $8 million this year, $7 million next, and $6 million final year assuming he plays it out (there's also $2.5 in incentives available per year). But Ravens could cut him and save cash & cap space in years 2 or 3. Crabtree's contract is totally a backloaded deal structured to minimize cap hit in Year 1.

Michael Crabtree

Contract (2018): 3-year deal worth a base value of $21M, with a max value of $28.5M. Signing Bonus of $7M. Deal contains $11M in guaranteed money, $8M of which is fully guaranteed – $7M Bonus & $1M 2018 base salary – and $3M of 2019 base salary that is guaranteed for injury only. 2019 Roster Bonus due on 5th day of league year. Deal includes up to $2.5M in annual statistical incentives (NLTBE for 2018).
CRABTREE-Michael-2018-Contract.jpg

[BPF2]

I'd agree that a player might not take the exact same amount of money on a flat contract vs back-loaded. That's where the team has to do a cost-benefit analysis. Is a little extra money worth the benefit of being able to get rid of a lot of the money on the contract if you cut the player early? It depends how much money, how back-loaded, what's the likelihood of cutting a player after years x, y, and z ...

I think they do that analysis. What has really hampered them recently is doing that analysis and having all of the analysis and long term planning go to shit with devastating injuries and an elevator KO.

The players/agents also do that analysis by the way. They know that a lot of these 5 year contracts are really only maybe 3 year deals to be renegotiated later.

[Kyle Cactus]

I think they do that analysis. What has really hampered them recently is doing that analysis and having all of the analysis and long term planning go to shit with devastating injuries and an elevator KO.

The players/agents also do that analysis by the way. They know that a lot of these 5 year contracts are really only maybe 3 year deals to be renegotiated later.

Maybe they've been somewhat unlucky then. Maybe they've also underestimated the risk of committing to a long term contract. That risk is another reason to delay giving out a big contract a year early rather than waiting to the end of a player's rookie deal.

[BPF2]

Maybe they've been somewhat unlucky then. Maybe they've also underestimated the risk of committing to a long term contract. That risk is another reason to delay giving out a big contract a year early rather than waiting to the end of a player's rookie deal.

I think they've been unlucky in the sense of Pitta, Jimmy, Webb, and Rice. They've also been bad in the sense of draft picks failing to perform (Perriman, Williams, Correa, Brown, Elam). That's a lot of contract money tied up in the first group, as well as free agents to make up for the second group.