MLBTR: Span (Others) discuss long-term deals

[Seth Stohs]

Nationals Discuss Pre-Arbitration Extensions: MLB Rumors - MLBTradeRumors.com

 

Obviously Denard Span is no longer with the Twins, but this article/interview has Span discussing what went into his decision to sign his long-term, pre-arbitration contract with the Twins.

 

I wouldn’t say it was an easy decision. It was something that me and my family had to pray about. It was a situation where we felt like if I were to get hurt and never play again, at least all the hard work that I’ve put forth in this game, I’d at least have something to walk away from.

[Han Joelo]

That was an interesting article. I'd probably do the same thing if I were in that position. I'd rather win $12 Million in the lottery today than $100 Million in 5 years.

[Mr. Brooks]

To expand on the lottery analogy, its just like taking the cash option instead of the annual payments.

[diehardtwinsfan]

this is pretty much what I think most of us would be weighing in that situation. You may be able to make a few million more, but the security is worth taking a discount. You could get hurt tomorrow and never play again, at which point the contract is a great deal for the player, and at 16M, they can be set for life.

[Seth Stohs]

To expand on the lottery analogy, its just like taking the cash option instead of the annual payments.

 

The difference is, as the players alluded, that long-term payment isn't guaranteed. It might be more, but it might be non-existent.

[John Bonnes]

I think one might be able to make a pretty good argument that if Span had not signed that deal, he might not have made as much money as he did. There were a lot of questions about him after that concussion. There still might be quite a few.

[IdahoPilgrim]

The difference is, as the players alluded, that long-term payment isn't guaranteed. It might be more, but it might be non-existent.

 

I was going to say, it's more like "Let's Make a Deal." Do you trade the money you know is in the envelope for what's behind door number two? If the money in the envelope is good enough, sometimes it's better to say no.

[ashbury]

It is also interesting going to the other articles linked in the comments section, with interviews with Lohse and Uggla and Mathis about actual arbitration; what stands out to me is that Lohse couldn't at the time and still can't seem to get past the personal aspect of arbitration, while Mathis and especially Uggla seemed to be very mature about it.

 

Risk and uncertainty can take simple calculations and make them so there is no clear-cut mathematical "right answer", sometimes not even if you are willing to define how much risk you are willing to accept.

 

Among the many things I lack is an understanding of how much money of a large contract actually can go into a player's bank account. There's the agent's cut, there are taxes that are hard to shelter against (unless you take on risk of another kind), and I don't know what else. When you see 4 years for $16M for instance, is it fair to estimate that about $6M of that will actually be the guy's nest egg for after his playing days?

 

It would be an interesting study to somehow correlate a player's upbringing (poverty versus middle class versus uppper-middle) with the willingness to go the safe route at this stage of the career.

[diehardtwinsfan]

The agents only get a few percent. Taxes take up the lions share of it as these guys are in the highest bracket. I'd guess that they loose about 35-40% right off the top. That will leave closer to 10M as a nest egg, and that's more than enough to be set for life.

[ashbury]

I was going to say, it's more like "Let's Make a Deal." Do you trade the money you know is in the envelope for what's behind door number two? If the money in the envelope is good enough, sometimes it's better to say no.

 

Back when Who Wants To Be A Millionaire was first on, I was talking with someone about how far to go in the game versus walking away with the cash. There was a marked difference of opinion, based on perceived change in lifestyle at the various prize levels, such as down-payment on a house versus finishing paying off one's house. I think something similar is going on here too, although at a higher level of money, with each ballplayer having his individual upbringing and expectations in the mix.

[twinsnorth49]

A bird in the hand is worth two in the bush.