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Mookie Betts appreciation thread

Discussion in 'Red Sox Forum' started by Trotsky, Apr 26, 2018.

  1. Red(s)HawksFan

    Red(s)HawksFan Member SoSH Member

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    10,219
    Didn't the NHL see something like this when they first instituted the hard cap? A couple players getting 15+ year deals aimed primarily at reducing the cap hit the team took? Not that I expect other sports to see things like that and be proactive, but given it hasn't happened yet and we're well over a decade into the CBT era, I have to think there's a reason it hasn't happened in MLB. Either they guarded against it in the CBA or it really isn't fiscally reasonable for teams (or players) to engage in such contracts.
     
  2. Pitt the Elder

    Pitt the Elder Member SoSH Member

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    457
    There's some precedent for this type of contract with the Bobby Bonilla contract, right? However, given that no team is currently doing this to reduce the luxury tax hit makes me think that it wouldn't really work.
     
  3. Red(s)HawksFan

    Red(s)HawksFan Member SoSH Member

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    10,219
    Bonilla's annuity was actually a buyout of his contract rather than an original part of the deal. Rather than pay him ~$6M for the final year of his deal, they deferred it, with interest, for ten years. Basically so they could spend the money that season on a player they needed more (Mike Hampton). They did the deal that way figuring that their payoff to Bonilla (a total of almost $30M with interest) would be more than covered by the money they were making through investments with Bernie Madoff. Oops.
     
  4. EpsteinsGorillaSuit

    EpsteinsGorillaSuit Member SoSH Member

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    292
    Yes, I guess my question is why not? Is MLB preventing it to depress salaries? Is it the irrational fear from the players that they will be productive enough at the end of their careers to not want to give those back-end years away? Is it management not wanting to spread a cap hit long after a player's career would be over? I mean, $400/20 was just an example. One could do the same contract at $400M / 40 years, still structured with the same NPV (e.g., league minimum salary for the last 25 years) and reduce the luxury tax burden even more. But at some point it would be so ludicrous that I'm sure MLB would say no.
     
  5. brandonchristensen

    brandonchristensen mad photochops SoSH Member

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    I'm obviously not very smart, but the whole WAR = $10m model doesn't really make sense to me.

    I'm as big of a Mookie fan as anyone, I absolutely love watching him play, but I don't see how his worth in 2018 is $80m in that model. It seems like like that model should be like a bell curve or something, where once you hit like 5 WAR, each successive WAR is worth more.

    I don't know, it just seems like a flawed method of looking at how much someone is truly worth. I appreciate the work that goes into it, though. It's really fascinating...
     
  6. SirPsychoSquints

    SirPsychoSquints Member SoSH Member

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    3,909
    I'll see if I can find the sources later, but people have tried to show that concentrating WAR in one roster spot is more valuable than in multiple and they've largely failed to find that.

    Or are you saying something different?
     
  7. brandonchristensen

    brandonchristensen mad photochops SoSH Member

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    22,434
    I'm not really saying much unfortunately. Just commenting on the fact that, with the current WAR model, Mookie Betts was worth more than $80 million dollars, which is more than 10+ teams entire payrolls.
     
  8. SirPsychoSquints

    SirPsychoSquints Member SoSH Member

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    3,909
    The CBA spells out how to deal with deferrals. Basically, it attempts to bring the deferrals back to present-day value for the seasons that the player is actually playing.

    While I didn't find a specific provision, I bet the Commissioner and/or the MLBPA have the ability to object to specific tax-dodging that the CBA doesn't explicitly consider. That's what happened in the NHL.
     
  9. SirPsychoSquints

    SirPsychoSquints Member SoSH Member

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    Part of the consideration is contracts are offered for multiple years without knowing what a player's performance or health will be, and are guaranteed. We know for a fact that Mookie had an absurdly great year. The suggestion is that if a team could guarantee that year, they'd be willing to pay that much. Considering a couple years ago people expected Harper to get $40/year over 10 uncertain years, it's not that crazy.
     
  10. brandonchristensen

    brandonchristensen mad photochops SoSH Member

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    22,434
    I guess my thing is - pretend that Mookie could go 10 years at 2018's production - his worth is $800m. But he'd never get paid close to that, so the valuation of a player based on WAR seems flawed to me.
     
  11. SirPsychoSquints

    SirPsychoSquints Member SoSH Member

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    3,909
    He wouldn't get paid that because no one would be willing to commit to his continued health and production.

    If he were a free agent this year and was only willing to do 1 year deals, he might get $50M.
     
  12. Pitt the Elder

    Pitt the Elder Member SoSH Member

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    I'm not sure how $/WAR is actually calculated, but I think there are two ways to think of it.

    The first is trying to estimate how much WAR is valued by the market. If you could somehow start auctioning off units of WAR per player to all 30 teams in baseball, what would the price be? Would it be linear, or would you pay more to concentrate more WAR in one spot, as SPS has suggested that some argue?

    The second is trying to estimate how much incremental revenue a team makes for each additional win. In other words, how much revenue would the Sox have generated last year with 80 wins instead of 108? Is this also non-linear? This would be team-specific, of course. The Sox would probably net more money than the Rays by going from 90 to 95 wins.

    I have no idea which approach is right and I'm guessing that smarter people than me have tried, which is how I assume we got at the $8M/WAR. As a tool in estimating how much a player should be paid, it's probably directionally accurate but imprecise, with huge error bars.

    Another element is how much value Mookie creates for the Sox beyond pure WAR. The dude is a supremely marketable player and the Red Sox, more than perhaps most teams other than the Yankees, milk a lot of value from their legends. How much longterm value do you lose if Betts, instead of retiring as a beloved and maybe underperforming Red Sox player in 2032, inks a longterm deal with, I dunno, the Braves?

    edit: typos, clarity
     
  13. Hank Scorpio

    Hank Scorpio Member SoSH Member

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    4,863
    Not many teams are up against the luxury tax, and not many players are Mookie Betts. Perhaps if Mike Trout was a free agent, the Yankees or Dodgers would be looking at creative solutions to sign him long-term, without taking a massive luxury tax hit.

    Also, the Red Sox are in a fairly unique situation with an already high payroll and a core of beloved proven winners all heading towards free agency relatively soon... Betts, Bogaerts, Bradley, Sale, Porcello - and a lot of our younger players heading into arbitration in the next couple of years. We probably can't keep them all, but can maybe keep most of them.
     
  14. EpsteinsGorillaSuit

    EpsteinsGorillaSuit Member SoSH Member

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    292
    If Mookie could guarantee that level of production, he would have a reasonable argument for such a contract. But you are ignoring inevitable age-related decline and the substantial risk of non-performance, which manifests itself by reducing the value of a long-term guaranteed contract.

    The $/WAR calculation is a rough estimate of what teams pay for wins (which, as an aside, is now becoming disconnected from what they should be willing to pay because of collusion/reduced competitiveness). In 2018, the Red Sox earned 44 Fangraphs WAR at a payroll of $208M, so roughly $5M/WAR. The value of wins are not actually linear, as there is a premium for having a competitive team, making the playoffs, and winning the World Series. The other constraint is the 25-player roster and 9-player starting lineup, which is another reason why concentrating WAR in young, superstar players is more valuable than spreading it around. These are all reasons why 10 WAR seasons give astronomical financial values. There are only a handful of players capable of providing them, and these players are a non-trivial part of driving a multibillion dollar sport.
     
  15. EpsteinsGorillaSuit

    EpsteinsGorillaSuit Member SoSH Member

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    292
    Vince Gennaro studied the marginal value of wins to franchises about ten years ago, which is discussed in his book Diamond Dollars, and discussed briefly here.

    The numbers are no longer valid, but the concepts are likely still good. The value of wins (and therefore the value of WAR) is definitely non-linear, both in terms of value to teams (>90 wins better than 80-90 wins, greater value of wins to large-market teams, etc) and value of concentrating WAR in star players (as the only way to get to the high number of wins with that bump in marginal value).
     
  16. amfox1

    amfox1 Well-Known Member Lifetime Member SoSH Member

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    4,940
  17. BoSox Rule

    BoSox Rule Member SoSH Member

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    1,654
    So if you assume ~27 next year in Arb-3 for Mookie and 33-34 for his FA years I think an extension for Mookie right now looks like around 11/$360m.
     
  18. DeadlySplitter

    DeadlySplitter Member SoSH Member

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    Projection was 18.7 mil. So we basically conceded his value, probably partially to make up for last year and to set up extension talks
     
  19. BoSox Rule

    BoSox Rule Member SoSH Member

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    The projections are also from early October, before his MVP award was announced.
     
  20. EllisTheRimMan

    EllisTheRimMan Member SoSH Member

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    This is my take on the WAR system too. It gets funky at the extremes but these Elite Players drive the economics of baseball disproportionately. You can’t pay them for future value at that level, though. Often times you don’t have to right away because they’re under contract.

    It may be that a 40 man roster of more equally distributed WAR (Pitching and Hitting) is better for a 162 game season. Would love to see one of the computational guys here run some scenarios. It could be starting 9; 25 man and 40 man roster WAR distributions for maximum wins.

    That all said, these freakishly high WAR players are the reason we watch. Their exaggerated financial value may have a high variance but they add incredible value in branding that is a necessary and cumulative asset. The impact of a truly wonderful person like Mookie on branding could put him well north of $80 MM for his 2018 season.

    There’s an interesting counter discussion about the true value of negative WAR. There seem to be certain players that are so bad they also create fan interest and therefore some value. These are tantalizingly high ceiling players that give very little WAR but obtain iconic status. Sam *cough* Horn, for example.

    When’s Truck Day God Dammit?!
     
    #720 EllisTheRimMan, Jan 11, 2019
    Last edited: Jan 11, 2019
  21. PC Drunken Friar

    PC Drunken Friar Member SoSH Member

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    9,101
    There are maybe 4-5 people in the world that could do what Betts has done in the past 2 years (and that might be generous). Not to mention what he will do this summer. There are literally hundreds of people in Massachusetts who can do what I can do (and hundreds more qualified who can't even find jobs in the field).

    It should be pretty clear that Betts wants to hit FA. I hope he gets the biggest contract anyone has ever seen. He's given me more than enough pleasure in his short tenure so far. Honestly, in 2017, he brought me back into the fold. He alone was worth watching (well, him and Sale every 5th day).
     
  22. Plympton91

    Plympton91 bubble burster SoSH Member

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    11,593
    And, the worst hitting catcher in Major League Baseball gets $2.45 million.

    ‘merica!
     
  23. reggiecleveland

    reggiecleveland sublime Lifetime Member SoSH Member

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    I was so much better at basketball than I am at teaching. I made 15000 bucks in my life (above my tuition) playing ball. It is inconceivable for me to quantify how exponentially better Brian Scalibriene was than me. I can't imagine what a teacher would have to do to better my instruction to a comparable level of Timelord's game over mine. A kid goes from illiterate to published author in a semester? Mookie Betts level teaching? You drop your kid off for first grade then pick them up from grad school at 3:30?
     
  24. uncannymanny

    uncannymanny Well-Known Member Gold Supporter SoSH Member

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    5,730
    He’s still one of, what, the top 100 in the world at his job?
     
  25. Plympton91

    Plympton91 bubble burster SoSH Member

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    11,593
    Sure, though there are only 60 of those jobs.
     
  26. shaggydog2000

    shaggydog2000 Member SoSH Member

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    I was going to say something similar. We talk about the top handful of athletes and actors being paid incredibly high salaries, but it's a very sharp decline from there. The 5000th highest paid teacher is making a lot more than the 5000th highest paid actor or baseball player. And there is a huge amount of actors and athletes effectively working for free (or pocket money) in order to get a chance whereas professional teachers get paid something, no matter how relatively badly compared to some other professions. Would we really like a system where the vast majority of teachers make nothing and about a thousand of them make millions? There are only so many slots for major league ball players and big budget movie roles. There are far more jobs for teachers that all are pretty close to each other in required ability and economic effect. It's just not a comparable economic system.
     
  27. absintheofmalaise

    absintheofmalaise too many flowers Dope SoSH Member

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    12,648
    We all know that teachers are underpaid. Let's get the discussion back on track.
     
  28. Plympton91

    Plympton91 bubble burster SoSH Member

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    I agree with that. The economics of superstars and CEOs is a separate field from what you are going to learn in a set of undergraduate courses.
     
  29. Trotsky

    Trotsky Member SoSH Member

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    Sorry to derail
     
  30. uncannymanny

    uncannymanny Well-Known Member Gold Supporter SoSH Member

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    5,730
  31. brandonchristensen

    brandonchristensen mad photochops SoSH Member

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    Is there any reason why Betts wouldn't do a 5 year deal? Like $200/5?

    I don't get why everyone needs a 10 year deal all of a sudden.
     
  32. Saints Rest

    Saints Rest Well-Known Member Lifetime Member SoSH Member

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    My guess is that teams want to reduce lengths of contracts; not the outlay per year. Owners don’t want dead money on the books; it’s bad economics and bad PR.
    Players and agents are fixated on total $, over years. That’s their PR win, to be able to say “it’s a $250million contract.”
     
  33. Pandarama

    Pandarama lurker

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    30
    It’s also a “cold, hard cash” win. I mean, PR is an intangible win, but $250m in the bank is a nice rainy day fund.
     
  34. edoug

    edoug Member SoSH Member

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    Wouldn't that put them over the luxury tax for the entire deal? 40 mill is quite a chunk.
     
  35. brandonchristensen

    brandonchristensen mad photochops SoSH Member

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    I've seen people say 10/400 here.

    So drop it to 5/150-175.
     
  36. edoug

    edoug Member SoSH Member

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    1,843
    I think that's what I think the Sox would like and might work for Mookie as well.
     
  37. Pitt the Elder

    Pitt the Elder Member SoSH Member

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    Why would Mookie do 5/150? Do you not think he could get more on the open market? I haven't been keeping close tabs on the rumors on Machado and Harper's contracts, but it's been reported that the White Sox has offered Machado 8/175 (which he hasn't accepted) and that the Nats have offered Harper 10/300, and perhaps even more. I know the general sense is that the market for these 2 guys is cold, but do we not think that they'll end up with contracts in the 8-10 year range at $28-32M AAV? Mookie will be two years older when he hits the market, which is meaningful, but he's a better player than Machado and (arguably) a much better player than Harper. Those two guys also have positional inflexibility that limits their potential suitors while Betts could play outfield for any team in baseball.

    To drive the point home, here are how Betts compares to these guys in fWAR from 2015-2018, with Trout thrown in for good measure:
    -TroutBettsHarperMachado
    Birthday8/7/199110/7/199210/16/19927/6/1992
    Age27.4826.3126.2826.56
    20159.34.89.36.6
    20169.68.23.06.3
    20176.95.34.82.6
    20189.810.43.56.2
    Avg8.97.25.25.4

    If Harper can get 10/300 on the open market, why would Betts accept anything less than, say, 8/275? A five-year contract wouldn't get Mookie back on the market until he's 33 so he has no real incentive for a shorter-term contract to give himself a 2nd bite at the apple. If you're him, you go for 8-10 years to set yourself up for the rest of your career, right?
     
  38. Pitt the Elder

    Pitt the Elder Member SoSH Member

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    457
    Let's also not forget that the Sox gave Price a 7/217 contract going into his age 30 season.
     
  39. Savin Hillbilly

    Savin Hillbilly loves the secret sauce SoSH Member

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    Right, 5/150 is basically asking Mookie to settle for the first three years of his likely FA contract with no premium to compensate for giving up the rest of it. (Assuming he'll make close to $50M over the next two years, that's basically arb + 3/100). Granted, in return he's relieved of the risk of waiting two years for his first big(ish) payday, but that doesn't seem like an even tradeoff. Even if you hike it to $175M it doesn't seem like a real good idea from Mookie's POV, especially considering that at the end of that deal he's hitting his age-31 season, at which point big deals are not a given even for superstars.

    In short, if they want to shorten the years, they have to goose the AAV, and that's where they get into tax trouble. If they're serious about keeping him, a more promising approach might be a Pedroia-on-steroids kind of deal, like 12/$300M. Offer a relatively big payday right now, in exchange for going relatively light on the AAV to give the team flexibility. Of course that's a big risk for the Sox, but Mookie's in the driver's seat right now.

    The more I think about it, the more logical it becomes that nothing's happened yet--it really does seem to make the most sense for both parties to let the process take its course and see what can be done when the time comes.
     
  40. brandonchristensen

    brandonchristensen mad photochops SoSH Member

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    I had said 10/400, so just cut it in half then. 5/200.

    My point being, huge payday, but not spread into years where it might not be beneficial. I just don't get the obsession with 10 year deals when they never work out.
     
  41. bosockboy

    bosockboy Member SoSH Member

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    Because they work out exceptionally well for the player.
     
  42. effectivelywild

    effectivelywild Member SoSH Member

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  43. Pitt the Elder

    Pitt the Elder Member SoSH Member

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    Since Mookie isn't a FA, are folks talking about extensions that start in 2021 or contracts that buy out arb years in 2019 and 2020?. A five year contract at $40M aav that buys out two of Betts arb years and gets him to FA going into his age 31 season might make sense to him. A 31 yo Betts is probably still commanding 5-7 years at $30M+ AAV. If it's a 5 year extension that takes him to age 33, I think it makes a lot less sense.

    I still think he tests the market at age 28 and looks for 8-10 years at big money.
     
  44. effectivelywild

    effectivelywild Member SoSH Member

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    Can they even buy out his next "arb" year given that the already agreed to give him 20 million for it? Otherwise, he only has one arb year left. I suppose they could offer an extension that involves ripping up the contract he just signed---but I think if he wanted to go that route, there would have been some talk about him doing so already.

    Bottom line is, there is every indication that he will go to FA and want one of those big money-long years contracts. Contract suggestions to the contrary are just wishcasting.
     
  45. uncannymanny

    uncannymanny Well-Known Member Gold Supporter SoSH Member

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    5,730
    Does 10 years with an opt out after 5 move the needle here? Which party hates that structure?
     
  46. brandonchristensen

    brandonchristensen mad photochops SoSH Member

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    22,434
    I'm just having a general discussion, after watching the Harper/Machado market not do what everyone expected.
     
  47. In my lifetime

    In my lifetime Well-Known Member Lifetime Member SoSH Member

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    885
    Coming off an MVP and world championship year, Mookie has every right to be incredibly selective in considering the RS offers. The benefit of buying out an arb year and guaranteeing a player income a year early might not seem to be that great a benefit after a historic year. So I would think a long term contract is much more likely after next year. The Harper/Manny contracts are likely to set a floor. Assuming one gets 10 years, and one gets an AAV of 30 MM, while Betts finishes next year with a WAR of ~7. I think that would peg Betts at 10/320 - Arb yr buyout savings of 5 - security of getting contract a year early worth another 5. So that would put his contract at 10/310 with movement/length dependent on those contracts this year and his performance this year.

    For the RS sake, they hope the first 6-7 years pay for the entire contract since the back end of these 10 year contracts carry significant negative value. The value of the contract for 10 year contracts for the team is that they receive protection on $/WAR inflation and get value initially in underpaying $/WAR. While the value for the player is that they are protected against a decrease in performance for a long period of time.
     
  48. chrisfont9

    chrisfont9 Member SoSH Member

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    Seems like a pretty good bet? For starters, if a win is worth like $8m then he pays that thing off with about four prime seasons. But even if those numbers are super squishy, surely the salary structure will start to trend up in the next decade? Owners won't get away with their deflation tactics for that much longer, I'd think. I know that involves a million factors but Henry is a futures trader, right?
     
  49. In my lifetime

    In my lifetime Well-Known Member Lifetime Member SoSH Member

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    885
    I agree, but not as much as a no-brainer as you would think when you include injury risk and cost of luxury tax (will RS be at 50% for the majority of the contract?)

    Assuming ave. 7 War for the the 1st 4 yrs of the contract, then 5 War for the next 2:

    War
    Yr 1 (since Arb salary would be ~27 MM) is a loss of - 5.0 regardless, since salary is restricted by arbitration

    Yr 2 - 5 56/yr = 224 MM total value
    Yr 6-7 40/yr = 80 MM total value

    So at the completion of year 7 Betts would have been worth 299 MM. That leaves him close to the suggested 310 or another 11 MM needed in the last 3 years of the contract.
    In addition the RS get protection from inflation, paying today's value per win as opposed to the value per win in 5 years.
     
  50. chrisfont9

    chrisfont9 Member SoSH Member

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    4,191
    Sounds about right. Although I don't think you can factor in the extra LT cost, that's not Mookie's fault and not terribly foreseeable as to what amount they'd be over the tax.
     

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