[Signing] Canes sign Jarvis to 8 yr ext worth $63.2 million with a rare 9th year deferred bonus

[Jay Random]

Originally Posted by Locke

Huh...back-diving contracts...where have I seen this movie before?

It's not a back-diving contract under the terms of the CBA. The compensation payable for each year of the contract never goes below $6 million. The first two years appear to have a higher salary because of signing bonuses, but those bonuses aren't paid until after the contract expires.

If anything, it's a back-loaded contract with a discount up front.

[All In Good Time]

Originally Posted by The Cobra

It’s not a thing that artificially lowers cap. This will not help the Oilers or any team.

So a 62.2 m dollar contract carries a 7.5 m cap hit?
This new math kills me
And
All I was saying is this technique that saves a team a
In this case about 5% on AAV was apparently unknown about and unused until the Oilers face a bit of a crunch
And
I even issued a “foil hat alert”

Oh well
Lotsa Oiler fans here I guess

[Philly06Cup]

Eric Tulsky is a really interesting guy. Started as a random Flyers blogger. Did a lot of analytics work, and worked his way up to being an NHL GM. Quite the ascent.

https://en.wikipedia.org/wiki/Eric_Tulsky

[Jay Random]

Originally Posted by All In Good Time

So a 62.2 m dollar contract carries a 7.5 m cap hit?
This new math kills me
And
All I was saying is this technique that saves a team a
In this case about 5% on AAV was apparently unknown about and unused until the Oilers face a bit of a crunch
And
I even issued a “foil hat alert”

Oh well
Lotsa Oiler fans here I guess

If you think a dollar today is worth the same as a dollar eight years from now, can you lend me $1,000 for eight years at no interest?

[All In Good Time]

Originally Posted by Jay Random

If you think a dollar today is worth the same as a dollar eight years from now, can you lend me $1,000 for eight years at no interest?

Again Jay
Not the point
But
That’s ok, I understand. Go finish your wine with Ron

[Jay Random]

Originally Posted by All In Good Time

Again Jay
Not the point
But
That’s ok, I understand. Go finish your wine with Ron

The fact that you don't understand the point doesn't mean that isn't the point.

There are plenty of accountants here on CP. Why don't you ask one of them to explain the concept of present value to you, instead of showing off your ignorance?

[All In Good Time]

Originally Posted by Jay Random

The fact that you don't understand the point doesn't mean that isn't the point.

What are you talking about?
At the end of the day they get 5% off on the cap hit
None of them care about the value of the dollar in eight years
And
Why are you so cranky?
Darryl’s couch not comfy enough?

[All In Good Time]

Originally Posted by Jay Random

The fact that you don't understand the point doesn't mean that isn't the point.

There are plenty of accountants here on CP. Why don't you ask one of them to explain the concept of present value to you, instead of showing off your ignorance?

Ha ha
You are a gem

[The Cobra]

Originally Posted by All In Good Time

So a 62.2 m dollar contract carries a 7.5 m cap hit?
This new math kills me
And
All I was saying is this technique that saves a team a
In this case about 5% on AAV was apparently unknown about and unused until the Oilers face a bit of a crunch
And
I even issued a “foil hat alert”

Oh well
Lotsa Oiler fans here I guess

It doesn’t because the true value of this contract is not $62.3M, but more like $60M. The deferred payments lessens the value to Jarvis.

[The Cobra]

Originally Posted by All In Good Time

What are you talking about?
At the end of the day they get 5% off on the cap hit
None of them care about the value of the dollar in eight years
And
Why are you so cranky?
Darryl’s couch not comfy enough?

Of course every one cares about the present day value.

You give me $1M today, I’ll give you $1.03M in a years time. Deal?

Carolina gets 5% off the cap hit because they are effectively paying him 5% less than you think they are.

[Jason14h]

Jarvis gets more money total by deferring then if he didn’t. The options on the table weren’t take the same money over 8 or 9 years

So if he took over 8 he would have gotten less and the cap would have been the same (within rounding error)

This is a nothing burger

[Jay Random]

Originally Posted by All In Good Time

What are you talking about?
At the end of the day they get 5% off on the cap hit
None of them care about the value of the dollar in eight years

They absolutely do. The player is being compensated extra for the loss of value in the dollar over that time. The CBA specifically permits this, but this is the first time any player or player agent has accepted any payment that was deferred until after the contract ends.

And
Why are you so cranky?

I'm cranky because I don't suffer fools gladly.

Darryl’s couch not comfy enough?

If you are referring to the ‘Darryl’ I think you are, and to the activity that is popularly associated with his couch, you're sucking around for a ban.

[All In Good Time]

Originally Posted by The Cobra

Of course every one cares about the present day value.

You give me $1M today, I’ll give you $1.03M in a years time. Deal?

Carolina gets 5% off the cap hit because they are effectively paying him 5% less than you think they are.

Ok
I see, here I thought the initial report said that he signed an eight year NHL contract for 63.2 Million dollars and Carolina was going to carry a cap hit of 7.4 million for the term of the deal

[All In Good Time]

Originally Posted by Jay Random

If you are referring to the ‘Darryl’ I think you are, and to the activity that is popularly associated with his couch, you're sucking around for a ban.

What are you talking about?
Now you’re going to ban me for calling me an ignorant fool and not being an accountant?

Ok

[PepsiFree]

Originally Posted by All In Good Time

What are you talking about?
Now you’re going to ban me for calling me an ignorant fool and not being an accountant?

Ok

Jay’s a nasty bit of work when he doesn’t understand something. Gets a pretty big complex about it and lashes out.

[butterfly]

Originally Posted by PepsiFree

Jay’s a nasty bit of work when he doesn’t understand something. Gets a pretty big complex about it and lashes out.

Sounds more like you’re talking about yourself than Jay, who has explained pity points and net present value to you in consecutive arguments and you simply choose to pick petty fights.

[butterfly]

Originally Posted by Scornfire

I mean, do this for all your larger contracts and suddenly you have a few more mil in space during your window. Seems sus

Why, because the player agreed to deferred compensation? Any time any ingenuity is used, it seems "sus" to those who didn't think of such contract structures prior.

[The Cobra]

Originally Posted by All In Good Time

Ok
I see, here I thought the initial report said that he signed an eight year NHL contract for 63.2 Million dollars and Carolina was going to carry a cap hit of 7.4 million for the term of the deal

That is correct, but you left out the important part that the present day value of that contract is only $60M due to deferred payments which is why the cap hit is lowered.

The initial reporter likely was also ignorant about the concept of present day value.

[All In Good Time]

Originally Posted by The Cobra

That is correct, but you left out the important part that the present day value of that contract is only $60M due to deferred payments which is why the cap hit is lowered.

The initial reporter likely was also ignorant about the concept of present day value.

So deferred payments don’t calculate into the cap hit?
Amazing that Vegas hasn’t insisted on this all along
Everyone for that matter
I guess we have a precedent now

[butterfly]

Originally Posted by All In Good Time

So deferred payments don’t calculate into the cap hit?
Amazing that Vegas hasn’t insisted on this all along
Everyone for that matter
I guess we have a precedent now

$1.00 now is worth about 40-60 cents in 2031, depending on a multitude of factors - definitely toward the lower end if it isn't needed for immediate survival and can be used for investment, especially in tax advantaged methods. They implicitly accept dimes on the dollar if they don't insist on front loaded contracts.

That's why a series of 1-year contracts is so much more beneficial for the player, especially when they're on the rise (like Seth Jarvis). The time to take the long term contract is when you've peaked.