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  1. #1
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    Extend Cano to get under cap

    It sounds counterintuitive, but what would happen if the Yankees extended Cano this season, and gave him a huge raise for this season so that he'd accept less money next season?

    For example, what if they gave Cano a raise to $30-35 million for one year, and then next year the number went down to $20 million for the next 5-6 years?

    That would save the Yankees 5 million per year in cap space. It would benefit Cano because it's always better to get money up front, since you can take that money and invest it, having it collect interest.

    Now, I'm not 100% sure how this works so please correct me if I'm wrong, but I thought that the Cap was calculated by the AAV of what's left on the contract. In that case, the Yankees could save $5 million/year in the long run by increasing his pay significantly this year.


    Derek Jeter is a lucky man.

  2. #2
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    interesting point, I'm sure the league cry for collusion of some sorts though. I believe the average of is of the span of the contract if I'm not mistaken. I think that's why A-Rod's contract is still an average of 27.5 mil

  3. #3
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    Yes, it's an average.
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  4. #4
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    Quote Originally Posted by Phoba Chughes View Post
    It sounds counterintuitive, but what would happen if the Yankees extended Cano this season, and gave him a huge raise for this season so that he'd accept less money next season?

    For example, what if they gave Cano a raise to $30-35 million for one year, and then next year the number went down to $20 million for the next 5-6 years?

    That would save the Yankees 5 million per year in cap space. It would benefit Cano because it's always better to get money up front, since you can take that money and invest it, having it collect interest.

    Now, I'm not 100% sure how this works so please correct me if I'm wrong, but I thought that the Cap was calculated by the AAV of what's left on the contract. In that case, the Yankees could save $5 million/year in the long run by increasing his pay significantly this year.
    Like the idea, hate Cano.


    And so, a new era begins.....

  5. #5
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    Good thought but not allowed. The cap number is based on average salary of the new deal.

    So, it doesn't matter what he makes in a particular year.....if its a 6 yr 120 mil extension, he counts as $20 per year.

    Same w Arod. Even though his salary declines now, he is still on the cap at $27.5m per year. And that increases w his bonuses.

  6. #6
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    didn the devils try something like this with kovalchuk and get screwed?
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  7. #7
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    Quote Originally Posted by Phoba Chughes View Post
    It sounds counterintuitive, but what would happen if the Yankees extended Cano this season, and gave him a huge raise for this season so that he'd accept less money next season?

    For example, what if they gave Cano a raise to $30-35 million for one year, and then next year the number went down to $20 million for the next 5-6 years?

    That would save the Yankees 5 million per year in cap space. It would benefit Cano because it's always better to get money up front, since you can take that money and invest it, having it collect interest.

    Now, I'm not 100% sure how this works so please correct me if I'm wrong, but I thought that the Cap was calculated by the AAV of what's left on the contract. In that case, the Yankees could save $5 million/year in the long run by increasing his pay significantly this year.
    Ceative thinking on your part but the league does not allow teams to do anything they want.
    "Well, that kind of puts a damper on even a Yankee win."
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  8. #8
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    What would be more intelligent would be to tear up A-Rod's contract and extend it for 5 more years at a salary of $800 thousand per year as a player coach working with young players, which he seems to be good at.

    Currently A-Rod's contract is being valued at 27.5 million per year. He has $114 million for the next 5 years remaining and has incentives of up to $30 million. The $6 million incentive for reaching Willie Mays 660 homeruns should be reached this year since he is at 647. So, the Yankees will pay A-Rod $28 million this year plus $6 million incentive. Then the next incentive doesn't kick in until after he passes Babe Ruth at 714 HR's which is doubtful until 2015 at the earliest, if at all. Therefore in 2012, he will have $86 million over 4 years and non-attainable incentives.

    Say we add $4 million to the $86 million and divide the remaining contract by 9 years. Then the salary cap is $10 million per year, instead of $27.5 million.

  9. #9
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    Smile

    Quote Originally Posted by johnnyi View Post
    "Therefore in 2012, he will have $86 million over 4 years and non-attainable incentives."

    Say we add $4 million to the $86 million and divide the remaining contract by 9 years. Then the salary cap is $10 million per year, instead of $27.5 million.

    Sorry, I mispoke and didn't mean 2012, I meant entering the 2014 season.

  10. #10
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    Quote Originally Posted by sauronthepower View Post
    Like the idea, hate Cano.
    Why do you hate Cano?
    Friend: I think the NBA payed off the Heat in the first yr because of the politics. They threw game four and they payed Lebron because they were angry with what he did. So he had pay one way or another.

    F:There is no one in the draft coming out and trading players isn't going to happen. The Lakers are in trouble.

    F: Vogel doesn't run that team. Shaw does. If he leaves they are going to suck and Vogel will get fired.

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  11. #11
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    Quote Originally Posted by leoharris View Post
    Good thought but not allowed. The cap number is based on average salary of the new deal.

    So, it doesn't matter what he makes in a particular year.....if its a 6 yr 120 mil extension, he counts as $20 per year.

    Same w Arod. Even though his salary declines now, he is still on the cap at $27.5m per year. And that increases w his bonuses.
    Quote Originally Posted by 7chuck7 View Post
    Ceative thinking on your part but the league does not allow teams to do anything they want.
    You guys didn't read his post carefully. It confused me at first too. What Phoba is saying, is permitted, I suspect.

    Let's say for argument sake that Cano wants 7 years, for $140M at $20M/ year. Normally, a contract would start out below the mean and work its way up, back loading it, which favors the team (time value of money).

    Phoba is suggesting that if he wants 140M, perhaps we can convince him to take, say $120M, if we front load his contract. Give him 30M per year for the first two tears and then divide up the last 60M across the 5. It gives Cano the benefit of time value of money and MAY be acceptable to him, if the numbers are right.

    In that way, you would reduce the average salary.
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  12. #12
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    The AAV is calculated based on the guaranteed dollars divided by the number of years. It's not recalculated each year, so let's say Cano wants 7 yrs 140M. The AAV of that deal will be 20M per year regardless of whether he gets 30M in year 1 or 10M in year 1.

    So far, we have not seen MLB teams get very "creative" with structuring longer than usual deals so that the denominator of the fraction is larger, thereby diluting the AAV. The Devils tried this with Ilya Kovalchuck, signing him to a contract that continued to pay out until 2027. The NHL cried foul and the Devils had to restructure the deal, plus they were penalized by the league for trying to cheat the system. I would expect MLB would react similarly if a team tried to go this far to lower the AAV of a contract.

    That's not to say you couldn't game the system a little by extending A-Rod or Jeter or Cano by a year or two and diluting the AAVs of their contracts. Joel Sherman wrote an article on this earlier this year suggesting as much.

    http://www.yankeeanalysts.com/2012/0...nanigans-39140

  13. #13
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    Quote Originally Posted by theslick1 View Post
    The AAV is calculated based on the guaranteed dollars divided by the number of years. It's not recalculated each year, so let's say Cano wants 7 yrs 140M. The AAV of that deal will be 20M per year regardless of whether he gets 30M in year 1 or 10M in year 1.

    So far, we have not seen MLB teams get very "creative" with structuring longer than usual deals so that the denominator of the fraction is larger, thereby diluting the AAV. The Devils tried this with Ilya Kovalchuck, signing him to a contract that continued to pay out until 2027. The NHL cried foul and the Devils had to restructure the deal, plus they were penalized by the league for trying to cheat the system. I would expect MLB would react similarly if a team tried to go this far to lower the AAV of a contract.

    That's not to say you couldn't game the system a little by extending A-Rod or Jeter or Cano by a year or two and diluting the AAVs of their contracts. Joel Sherman wrote an article on this earlier this year suggesting as much.

    http://www.yankeeanalysts.com/2012/0...nanigans-39140
    Interesting. See my post above. I had assumed there was some way the system could fight back if you went overboard, that is why I didn't suggest, for example, paying him $70M in year one and $1 in years 2-7.

    For some reason, this reminded me of Quisenberry's lifetime contract.
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  14. #14
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    Quote Originally Posted by Laying Low View Post
    Interesting. See my post above. I had assumed there was some way the system could fight back if you went overboard, that is why I didn't suggest, for example, paying him $70M in year one and $1 in years 2-7.

    For some reason, this reminded me of Quisenberry's lifetime contract.
    I think if a team got too ridiculous, like paying a guy until he was in his 50s when he clearly isn't going to be playing anymore, the league would step in. But if you give a guy an 8 year deal instead of a 7 year deal and kept the money the same (i.e., 7/140-> 8/140), you could probably get away with it. Of course, you need the player to agree to be bound to that 8th year with no additional money, so it's probably easier to theorize about than actually implement.

  15. #15
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    Quote Originally Posted by johnnyi View Post
    What would be more intelligent would be to tear up A-Rod's contract and extend it for 5 more years at a salary of $800 thousand per year as a player coach working with young players, which he seems to be good at.

    Currently A-Rod's contract is being valued at 27.5 million per year. He has $114 million for the next 5 years remaining and has incentives of up to $30 million. The $6 million incentive for reaching Willie Mays 660 homeruns should be reached this year since he is at 647. So, the Yankees will pay A-Rod $28 million this year plus $6 million incentive. Then the next incentive doesn't kick in until after he passes Babe Ruth at 714 HR's which is doubtful until 2015 at the earliest, if at all. Therefore in 2012, he will have $86 million over 4 years and non-attainable incentives.

    Say we add $4 million to the $86 million and divide the remaining contract by 9 years. Then the salary cap is $10 million per year, instead of $27.5 million.
    I like this but I'd bet they'd have to be on the 25 man roster.

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