Quote:
Originally Posted by Enoch Root
Again, the issue isn't with the time value of money, and whether the player is receiving an equivalent NPV.
The issue is with the cap. On an 8 year deal, there is no discounting on the amount. Here, they have added one day to the contract length, in order to discount $15.67M. This reduces the cap hit.
The moment you allow this, the cap is effectively dead.
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It’s ripe for abuse, but it really hasn’t been even though the first team did it a decade ago.
I think, generally, it doesn’t happen often for a few reasons:
1. Players generally prefer their money now
2. Owners generally don’t like paying for people who aren’t on their team
3. The amount extra that needs to be paid to make it worth it, combined with the amount the cap is reduced, makes it generally not worth it
It’s “brilliant” in the same way that someone feels brilliant for discovering you can extend your payments on a new purchase by just paying a bit more in interest!
Feels good to get the shiny new toy now. But financially, it’s usually pretty stupid.