http://sports.yahoo.com/mlb/news;_ylt=AkaM...=yhoo&type=lgns

What will Pujols cost when it is his turn?

I read that Holliday's deal has deferred payments that stretch out until 2029. Something like 2 million a year after the contract ends.

Link to that story

Must be the only way the can afford both Holliday and Pujols.

Pujols is gonna get $30 million a year I'm betting.

Has this been done before? Sounds crazy. This is the kind of contract that ends up crippling franchises in the long term, never being free of money paid to players no longer contributing. It almost feels like those mortgages that people were taking out in 2006, 2007, that ended up in so many foreclosures -- borrow against the future, betting that tomorrow's income will rise sufficient to help defray today's cost.

On the other hand, St. Louis is basically sealing its "face(s) of the franchise" and returning to the old days of having a pair (or more) of stars be with them year in and year out, basically throughout their careers.

Ultimately, I think it's a bad move for both sides, bred from desperation on the part of the Cardinals. I'm quite glad we didn't attempt to get involved in this approach.

Do you agree? Or am I missing something?

I think it's a bad move for the Cardinals, but not Holliday.

The money's guaranteed, so he gets $2 mill a year to coach his kid in little league, or whatever he wants to do after he's done playing baseball? Seems like a winner to me.

I agree it's a stupid move for the Cardinals. Granted $2 mill isn't "a lot" in baseball salary terms, but if the economy crashes even more, or any other bad thing they could conceivably be hand tied by having to pay Holliday for that long.

Unless it has some sort of clause saying he has to work for the team? Nah that wouldn't make sense.

That's a lot to give up for the Cards.

The contract is creative. But I don't have a problem with the way it is structured. Deferred payments of $2 million per year for several years after the contract expires isn't ideal, but shouldn't be crippling in any way. If there were a hard salary cap imposed by MLB, that would be another matter, but there isn't nor is there one foreseeably coming.

As for the present state of the economy's affect on the contract, that doesn't matter. Those deferred payments don't kick in for another 10 years. The current economy has no affect on those payments, nor can we predict what the economy will be in 10 years based on what it is now.

EDIT: On the point about this being akin to a mortgage, a mortgage in and of itself isn't a bad thing. What is bad is when mortgages are handed out to anyone who applies for one, without regard to the traditional factors that should be considered before money is loaned or borrowed.

If inflation remains low this is a bad idea.

If we experience inflation similar to Zimbabwe, Matt Holliday won't be able to buy his own baseball card in 2029.

In other Cardinals news, La Russa wants to have McGwire as a pinch hitter...

http://www.mercurynews.com/sports-headline...?nclick_check=1

I wonder how that could screw with his eligibility.

Hmm. No one said mortgages are bad. I do think adjustable rate mortgages at the obscene rates of progression that so many people took on during the mid 2000s were foolish gambles, taken mostly on the grounds that if income didn't increase sufficient to cover the new monthly payments, that would be something they'd deal with later, without much thought, using the increased equity in their homes. Unfortunately, the equity didn't increase, and in many cases became negative equity, so when incomes couldn't possibly keep up with the absurd rate increases that people *knew* they wouldn't be able to handle, it all came crashing down with no escape.

Mortgages aren't a problem. ARMs aren't a problem, for those who know their income is likely to keep up. The ARM setups that started being offered in 2006 or 2007 that ended up in so many foreclosures were a foolish approach based on assumptions that money/assets would be available to bail em out when the time came.

I believe the concept that $2 million a year won't cripple an organization is based on the idea that this is a rare contract approach. My opinion is that this is precedent-setting, and if players/agents start expecting this sort of solution to get what they want, the cumulative burden may indeed bring a franchise down.

For that reason, it will be interesting to watch whether this is an isolated solution, or becomes the new demand in order to get the overall annual figure a player expects.

Now that is the only way I see the contract as becoming a problem; which is as a precedent. Thinking about it though, I don't see it happening because most ballplayers and their agents want their money up front. GMs will prefer to pay up front also.

On mortgages, I look at it from the other angle that lenders became overly optimistic and dazzled by the volume of interest they were collecting. I am not a financial expert, but my understanding is that banks lose money on foreclosures also. To that end, it appears that banks were not acting in their best interest either. It seems to me that the blame on that one should be a two-way street. Sorry to digress from baseball more than was necessary, but I actually find this particular topic interesting.

Oh so true. And that's what makes it HILARIOUS! :lol: :lol: :lol:

Turns out that it isn't precedent-setting, after all. Some of the names we found include George Brett (Royals, payments for life), ARod (Texas, with 2% interest), Randy Johnson (AZ), Manny Ramirez (Dodgers), Brad Penny (Dodgers), Ichiro Suzuki (Mariners, with 5.5% interest), Dave Stieb (Blue Jays)...I had no idea.

I had no idea either. I guess that answers all of our questions.

I understand these are business transactions, and there's no reason why rules of interest shouldn't apply. But does the notion of collecting interest on these deferred payments on these player contracts strike anybody else as being odd?