Davis Signs With Baltimore (7/$161M, incl $42M deferred)

[24fps]

I think you'd be looking at some historically unseen lack of inflation for the PV = FV.

If you put a gun to my head I would bet on inflation. But you would have to put a gun to my head. On the subject of history, there's been a lot of it made in the last decade including many things that have been heretofore unseen. Let's see what things look like on, say, June 16.

On the subject of Chris Davis, I understand the strategy of this contract in the abstract. I just don't agree with deficit funding on principle. I'm old fashioned that way. I try not to be reactionary.

[scOtt]

Davis isn't a fat out of shape rotund piece of flubber. He's not Fielder. People need to get over the whole Davis is just waiting to breadown thing.

[video=youtube;ekoOqeXWr0s]

[Number5]

Ok 161 MM paid over a series of years. Lets say 25 years is not the same as 161 MM paid today.

Here is a little trick to prove it. If you think I am wrong please mail me a cashiers check TODAY for $10,000. Please give me your address as I will want to give your money back in 25 years. All $10,000 of it.

Not sure why you directing this at me. You are saying the same thing I am saying.

[BohKnowsBmore]

USA Today should talk to a tax attorney. MD is still going to tax the deferred money, as will every other state in which it was earned over the 7 years.

Sent from my iPhone using Tapatalk

No. Personal employee income taxes are based on the cash.

Sent from my iPhone using Tapatalk

[VeveJones007]

The true value of the contract is $161 million in January 2016 dollars. Davis' contract extends to 2037. No one has the slightest idea what the economic consequences of this contract will be much past 12 months from now. I'm not comfortable predicting the value of an invested dollar past a +/- 15% range over the next two weeks.

What truly matters is the share of budget Davis' contract represents in a given year. The payroll has increased from $88MM in 2011 to over $130MM in 2016.

If the budget continues to inflate at a comparable rate, then the long-term effects of this contract on the ability to field a competitive roster aren't strenuous.

Sent from my iPhone using Tapatalk

[BohKnowsBmore]

If you put a gun to my head I would bet on inflation. But you would have to put a gun to my head. On the subject of history, there's been a lot of it made in the last decade including many things that have been heretofore unseen. Let's see what things look like on, say, June 16.

On the subject of Chris Davis, I understand the strategy of this contract in the abstract. I just don't agree with deficit funding on principle. I'm old fashioned that way. I try not to be reactionary.

It's not just inflation. The Orioles could park the cash they intend to pay in the future (rather than today) in a U.S. Treasury and earn interest. Pretty much no matter what a dollar today is better than a dollar tomorrow. In the financial world, this nears a universal truth.

Sent from my iPhone using Tapatalk

[ReclaimTheCrown]

Guys, this contract is signed to win a World Series sometime in the next three years. 2016 may not be our year, but the FO is banking on our young arms being ready to roll within this time period and provide the starting pitching we desperately need.

It's all on the young arms and our ability to develop them (checkered as that may be). The lineup is in place for the next few years

Sent from my iPhone using Tapatalk

[BradyBunch]

Here are my thoughts, in no particular order:

1. This is too much money for too many years. Chances are we'll regret this by 2020 at the latest. The no trade clause makes it worse.

2. If we really had a shot at Cespedes for 5/$110 mm or less (rumored offer was 5/($90 mm), that would have been a better deal than this.

3. I'm interested to see how much of the money is deferred, and how long it is deferred. That may mitigate this somewhat.

4. Despite what I said in points 1 and 2, there is a chance that Davis could be valuable enough in the first four years to ultimately earn the value of his contract. I wouldn't bet on it, but I can't rule it out completely.

5. In the short run, I'm happy to have Davis back. Our team for 2016 has a better offense than in 2015, I think. He will help us remain competitive the next 3-4 years so long as we do other things right. With spring training five weeks away, I'm happy to have him in the fold for this year.

6. I'm not really worried about him having another 2014 in the next couple of years. It's the back end I worry about.

7. Tough to argue Angelos is cheap after this deal, or that he'll "never" do this or that.

8. If you had told me on the last day of 2015 that Davis, Wieters and O'Day all would be back, I wouldn't have believed it. I think clubhouse morale will be sky-high.

9. I'm interested to see if the O's have another significant acquisition in their arsenal. The team as it is would probably be no better than last year. Offense slightly better, but pitching slightly worse without Chen.

10. So much for Davis not signing without an opt-out. Eat crow, dan-O.

11. It's Manny I worry about. Extending him should be the highest priority. If this deal leaves us with insufficient resources to do that, then that's a disaster.

And finally....

12. Never, ever count Scott Boras out. So many people said he was crazy for not accepting Angelos' initial offer at the Winter Meetings. I said all along he was a master at fishing for something better without letting an opportunity off the hook. Well, he got something better. Davis earned another $1.4 mm for every week he waited. Well worth it from the player's/agent's point of view. Boras is one smart cookie and has proved once again why he gets so many high-dollar clients. He's the best at what he does.

If you do the math Boras did not win. $42m deferred with out interest makes the contract worth when adjusted for inflation at 7/151.

[25 Nuggets]

...so this thread has turned into an economics class.

[Can_of_corn]

...so this thread has turned into an economics class.

Considering how often posters want to front load contracts I for one am glad it did. Stuff like this raises the overall level of discourse.

[Moose Milligan]

This whole thing is kind of hilarious. First, I love Davis but I don't love the contract.

But the OH faithful never fails.

I WANT A BIG PAYROLL! Happy now? NO ITS SPENT ON THE WRONG PLAYERS

ANGELOS WILL NEVER SPEND OVER 100 MILLION ON A PLAYER!! Well, he just did. BUT IT SHOULD HAVE BEEN ON SOMEONE ELSE!

[weams]

This whole thing is kind of hilarious. First, I love Davis but I don't love the contract.

But the OH faithful never fails.

I WANT A BIG PAYROLL! Happy now? NO ITS SPENT ON THE WRONG PLAYERS

ANGELOS WILL NEVER SPEND OVER 100 MILLION ON A PLAYER!! Well, he just did. BUT IT SHOULD HAVE BEEN ON SOMEONE ELSE!

Buck appeared to want Upton.

[bobmc]

...so this thread has turned into an economics class.

<blockquote class="twitter-tweet" lang="en"><p lang="en" dir="ltr">Chris Davis will receive huge tax break on the deferrals since he lives in Texas.</p>— Bob Nightengale (@BNightengale) <a href="

">January 16, 2016</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script>

[Ohfan67]

If you do the math Boras did not win. $42m deferred with out interest makes the contract worth when adjusted for inflation at 7/151.

The original offer from Angelos included deferred money so it would not have been 7/150 when adjusted for inflation. We won't ever know the details of that deal, but I think it is safe to assume that Boras did not get the short end of the stick during the final round of negotiations. Angelos is a hard*** so he and Boras probably split the difference.

[DrungoHazewood]

The true value of the contract is $161 million in January 2016 dollars. Davis' contract extends to 2037. No one has the slightest idea what the economic consequences of this contract will be much past 12 months from now. I'm not comfortable predicting the value of an invested dollar past a +/- 15% range over the next two weeks.

But nobody in 2022 or 2035 cares a bit about the value of the dollar in 2016.