Curious

ESPN.com – MLB – Braves give Hudson four-year, $47M extension

The deal is oddly frontloaded — a $10 million signing bonus on top of this year’s $6.75 million salary — and backloaded — $13 million in both 2008 and 2009. In the middle, he’ll make “just” $4 million next year and $6 million the year after that. I assume there’s some reason for it. The Braves clearing payroll space to re-sign Furcal? Waiting for a Jones contract or two to run out at the end? I don’t know.

9 thoughts on “Curious”

  1. You think this is to leave some space the next two years when Hamptons back-end loaded kicks in? Looks like that to me. Very Smart by the Braves. They have the money to pay him more this year, hence the signing bonus. I wouldn’t think Chipper was deferring anything with this sturcture.

  2. I would say this is definitely because of Hampton’s kickers. They are pretty sever the next two years. I really think furcal’s resign has a lot to do with how Langerhans and McCarthy do in the spring and during they year. To me they are not a steal threat , but seem like good top of the order OBP type guys to me.

    Things seem really set well for the future now dont they. Strong prospects coming up just about the time contracts come due at key positions. JS is truly amazing.

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  4. anyone have any idea if furcal has said whether or not he wants to return to the braves?

  5. Wouldn’t you imagine that the bonus is spread out over several years for tax purposes? Or would they report that. I thought the way the contract was structured was funny too. I’ve always wondered why teams back load contracts on guys that will almost always lose effectiveness as they age. Factoring in inflation? Anticipating revenue growth? Other contracts coming off the books? Probably answered my own question.

  6. In the financial world, it’s usually considered a rule that you want to put off paying out money as long as possible. (And that you want to get paid money as soon as possible.) Hence, backloaded contracts. In theory, you could invest the savings.

    In football, there’s the added point that the end of those backloaded contracts are never paid anyway because contracts aren’t guaranteed.

  7. I doubt the Hampton contract has anything to do with the way Hudson’s contract is contructed. As Johnny has said, I am sure the signning bonus will be spread over the duration of the contract. I think having a front-loaded contract is actually an incentive given by the Braves to Hudson as a way to compensate for the lower value of the contract. Considering we are in an upward side of the interest cycle at this moment, the large amount of signing bonus will increase the real value of the contract.

  8. I think they are doing it to save them real money down the road, but for accounting purposes showing losses or something else to give them breaks in future years.

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