Quote:
Originally Posted by PepsiFree
It’s literally just a way for owners to buy cap space. The players get paid more in real money, the cap hit goes down. People are trying to over complicate it, but that’s what it is, that’s what it’s for, and that why anyone would agree to it.
Look at Ohtani. He was rumoured to be getting around 500-600 million. He is going to end up getting 700 by deferring 680, while still counting as 46m (the highest in the MLB) against the team salary.
So, to save 4-14m per year, the Dodgers have to pay him an additional 24m. And almost all of it when the contract is over.
These schemes only work when the team agrees to pay the player more than they would otherwise get without deferment (in value, not dollars, since some are struggling) and even then there is a point where it won’t make sense for one party or the other because the amount of deferment required to have a significant impact on the cap is significant itself.
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Ok so that part makes sense. He got more real dollars by deferring part of the deal to the end of the contract.
I was wondering about the interest part. Does carolina have to invest that money and pay him interest earned on it as well ? I didn’t understand that part.
The cap savings is so small it really doesn’t do much. 400k doesn’t even get you another player.