Update: HOLLIDAY A CARD 7yr/120 million, p178

[robbotis]

Shelby Miller, meet Kyle Lohse. Kyle Lohse, meet Shelby Miller. Shelby, this is why you can't suck. Money saved, problem solved.

If Shelby Miller is a MLB pitcher before the end of Kyle Lohse's contract, we should all be doing cartwheels.

They need to draft about 3-4 more Shelby Millers in the next few drafts. Pitching will always buy you position players (IMHO), you can never have enough.

Yup, puts the pressure on Mo and Luhnow w/ 3 picks in the top 50.

[cards2468]

Is the fact that Holliday's contract isn't backloaded a good thing or a bad thing?

It seems like a good thing to me, but I don't completely understand the meaning behind backloading a contract.

I thought $2 mil was deferred?

backloaded means the player gets a pay raise each year. So lets' say he signed a 3 year deal worth $51 mil. Rather than being $17 mil per year, it could be $16 mil, $17 mil and then $18 mil on the 3rd year

[TimeForGuinness]

Shelby Miller, meet Kyle Lohse. Kyle Lohse, meet Shelby Miller. Shelby, this is why you can't suck. Money saved, problem solved.

If Shelby Miller is a MLB pitcher before the end of Kyle Lohse's contract, we should all be doing cartwheels.

They need to draft about 3-4 more Shelby Millers in the next few drafts. Pitching will always buy you position players (IMHO), you can never have enough.

Yup, puts the pressure on Mo and Luhnow w/ 3 picks in the top 50.

I forgot about the draft picks for Pineiro and DeRosa...that should help.

[Swingingbunt]

Is the fact that Holliday's contract isn't backloaded a good thing or a bad thing?

It seems like a good thing to me, but I don't completely understand the meaning behind backloading a contract.

I thought $2 mil was deferred?

backloaded means the player gets a pay raise each year. So lets' say he signed a 3 year deal worth $51 mil. Rather than being $17 mil per year, it could be $16 mil, $17 mil and then $18 mil on the 3rd year

You are right. $2MM is deferred each year. So we're paying him $15MM in 2010, $15MM in 2011, etc. It seems to me like that's good for us...because in 2015, we'll be paying him $15MM and will therefore have more room for Pujols' contract. I just don't know if there is an edge for the team when backloading a contract.

[JL21]

I forgot about the draft picks for Pineiro and DeRosa...that should help.

Jeff Luhnow: Oh boy! Our high-A bullpen is going to be LOADED come June. LOADED, I tell you.

[skmsw]

Is the fact that Holliday's contract isn't backloaded a good thing or a bad thing?

It seems like a good thing to me, but I don't completely understand the meaning behind backloading a contract.

Back-loading does several things:

1. It lessens the IMMEDIATE SHORT TERM impact to the team of adding a major contract. This buys time until you can clear off dead wood contracts (say for instance you've traded Edmonds but owe $6mm of his deal to SD), let players walk (say for instance Piniero is making $9mm in 2010 but it is his walk year and you intend to replace him with a promising minor leaguer next year), or move money around (say, trade Lohse and a promising minor leaguer in exchange for low prospects and payroll relief)

2. It allows you to capitalize on the time value of money; a dollar today is more valuable than a dollar in three years, due to inflation

3. It allows you to earn some of the money before you pay it -- say the deal pays $15mm in 2010-2012 and $18.5mm in 2013-2016 -- take the extra $3.5mm per year you are back-loading from year one to year four, and invest it -- the interest/return you earn defrays the added expense when it does come due, and is not on the books as a liability until you owe it

4. It allows the player to "get a raise"

5. It allows the player to enter negotiations for their next contract starting from a higher annual rate of pay

[Swingingbunt]

Is the fact that Holliday's contract isn't backloaded a good thing or a bad thing?

It seems like a good thing to me, but I don't completely understand the meaning behind backloading a contract.

Back-loading does several things:

1. It lessens the IMMEDIATE SHORT TERM impact to the team of adding a major contract. This buys time until you can clear off dead wood contracts (say for instance you've traded Edmonds but owe $6mm of his deal to SD), let players walk (say for instance Piniero is making $9mm in 2010 but it is his walk year and you intend to replace him with a promising minor leaguer next year), or move money around (say, trade Lohse and a promising minor leaguer in exchange for low prospects and payroll relief)

2. It allows you to capitalize on the time value of money; a dollar today is more valuable than a dollar in three years, due to inflation

3. It allows you to earn some of the money before you pay it -- say the deal pays $15mm in 2010-2012 and $18.5mm in 2013-2016 -- take the extra $3.5mm per year you are back-loading from year one to year four, and invest it -- the interest/return you earn defrays the added expense when it does come due, and is not on the books as a liability until you owe it

4. It allows the player to "get a raise"

5. It allows the player to enter negotiations for their next contract starting from a higher annual rate of pay

Got it. Thanks.

[Hungary Jack]

Backloading also can also lessen the payroll bite of one superstar's salary in an era of rising revenues. IIRC, MLB revenues grew an average of 10% per annum during the 2000 - 2008 period. Such revenue inflation can allow teams to structure deals with 10-20% raises in the later years without having to worry allocating a bigger chunk of payroll to one player.

Revenues are stagnant right now, but I still think baseball is a strong growth business and we'll return to high revenue growth in a few years.

[BigDCardlvr]

Is the fact that Holliday's contract isn't backloaded a good thing or a bad thing?

It seems like a good thing to me, but I don't completely understand the meaning behind backloading a contract.

Back-loading does several things:

1. It lessens the IMMEDIATE SHORT TERM impact to the team of adding a major contract. This buys time until you can clear off dead wood contracts (say for instance you've traded Edmonds but owe $6mm of his deal to SD), let players walk (say for instance Piniero is making $9mm in 2010 but it is his walk year and you intend to replace him with a promising minor leaguer next year), or move money around (say, trade Lohse and a promising minor leaguer in exchange for low prospects and payroll relief)

2. It allows you to capitalize on the time value of money; a dollar today is more valuable than a dollar in three years, due to inflation

3. It allows you to earn some of the money before you pay it -- say the deal pays $15mm in 2010-2012 and $18.5mm in 2013-2016 -- take the extra $3.5mm per year you are back-loading from year one to year four, and invest it -- the interest/return you earn defrays the added expense when it does come due, and is not on the books as a liability until you owe it

4. It allows the player to "get a raise"

5. It allows the player to enter negotiations for their next contract starting from a higher annual rate of pay

and some negatives

6. It could allow that a player past his prime is makeing more money than he is worth and therefore untradeable (unless you eat a lot of salary - which doesn't really help payroll anyway)

7. Potentially hamstrings payroll in the later years not allowing flexibility to fill holes.

You have to be careful with it, but certainly if Steve's number 1 is in play, somebackloading can help. I think you have to be cognizant of your chances of winning it all, the real quality of your minor league system, the dollars coming off the payroll in a year or two, potential free agents down the road, etc.

[stlouie_lipp]

Everyone has their opinion I guess, but I just don't know how anyone who wasn't privy to the negotiations can really "rate" how it turned out. If we knew everything, maybe we'd learn that Mo got fleeced; maybe we'd learn that Boras really screwed up. But, based on what we know, it truly looks like a win-win.

Your first sentence and your last sentence seem to contradict one another.

yeah, I realized that as I was typing it.