Quote:
Originally Posted by BobC
Probably. Also allows players to push and extend earnings for much longer in the future and ultimately make more in total on a contract. And aside from possibly helping to get some relief from the luxury salary tax, teams also recognize there's a time value to salary money. Instead of agreeing to pay an extra $10M to sign a player, if the team can instead pay that $10M out to a player as an extra $1M a year for 10 years, the team will likely view that as costing them less than it would seem. With inflation and such, $1 paid a year from now is going to be worth less than that same $1 were it paid today. And the $1 paid two years from now will be worth even less than the $1 paid after year one, and so on all the way out to year ten.
|
Not only that, if you can avoid paying the government 20-80 cents on the dollar and give it to the player instead you’ve just cut your offer by that same percentage.