Sunday, January 24, 2021

Front Loading a Young MLB Superstar's contract early on may be the key to keeping them beyond six years.

Many MLB teams are gleeful when one of their young prospects practically becomes an instant star. The young baseball player is under "team control" for the first six years of their career and he return on investment during those first three years can be a remarkable value to a many teams.

However, something definitely went "wrong" perhaps a decade or more ago when arbitration started amping up arbitration eligible players by surprising amounts. Teams that thought they had at least 5 years of affordable control found the fifth year could suddenly cost them 17 million. A four year player could command 10 million.

Even more frightening, players that had poor seasons or missed most of the season due to injury STILL got a raise.

It was as if 6 year control was really 3 year control and then hope that the fourth year was not too high of a jump so that maybe they could keep the player for the fifth year.

However, sometimes creative math can rebalance the playing field. For every player who is truly going to have a prolific career there are several others who may peak early, or, turn into solid players with untapped upside that may not reveal itself until their 7th or 8th season.

If a team is certain a player is going to be a can't miss then perhaps a front loading contract pricing strategy needs to be considered. If MLB arbitration players can now reach 22 million to 25 million by year six, then maybe the lure of front loaded contracts may be the next best move for an MLB team that wants to try and squeeze one or two more years from their young stars before they lose them to free agency.

Let's take a look at the Cleveland Indians Salary obligations for Francisco Lindor. The jump from season three to season four is remarkable. There is literally a 1,500% increase in Salary.

However, it should also be noted the remarkable return Mr. Lindor contributed over his first four seasons. The Indians tried to lock up Mr. Lindor after his second season. Lindor's first season was a mid season call up so it was his second season that counted towards his six years. The rumor I heard was the Indians offered around 105 million for probably 7 more seasons for a total of 8 seasons plus the 2/3's of a season that did not count towards his six year commitment.

Unfortunately for the Cleveland Indians, between the signing bonus money Mr. Lindor received, PLUS the New Balance Contract Mr. Lindor already had signed, Mr. Lindor felt comfortable biding his time until his six years were up.

In an ironic twist early on, Lindor's call up was delayed so the Indians could get an extra 2/3's of a season that would not count towards his six years. The irony was that was the year the Indians barely missed the playoffs and maybe if Lindor had been called up early enough, maybe he is a difference maker.  Although, it can also be argued that Jose Ramirez, who was called up first in that same year, got invaluable time at shortstop that help with his development.

Either way, how could the Indians have structured their offer to lure Mr. Lindor into staying in Cleveland for a couple more years?

Assuming the Indians did offer Mr. Lindor 106 million for a 7 year extension after his first official year in Cleveland, they probably offered something like 1 million, 5 million, 10 million, 15 million, 20 million, 25 million, 30 million.

I am totally ball parking the numbers but they probably are close enough to the offer that was made.

This is what I would have offered Mr. Lindor, a front loaded conract.... 15 million, 15 million 15 million, 15 million, 15 million, 15 million, 15 million

In the front loaded version after 4 years Mr. Lindor gets 60 million, in the original offer, after four years Mr. Lindor gets 31 million.  

The front loaded contract gives Mr. Lindor 14 extra million after year one, a total of 24 million after year 2, and a total of 29 million more after year three, a serious chunk of front loaded money to reinvest. While more conventional contracts are back heavy, the front loaded contract gives Mr. Lindor more opportunities to immediately start getting a bigger return on his contract which can also be a hedge in the event there is any kind of performance or injury clause in the contract. 

Even if there is no injury or performance clause, the odds are the front loaded contract might be worth signing since it is overall a better deal and does not put off paying Mr. Lindor in the future what he can earn today.

Now lets compare the front loaded deal to what Mr. Lindor has actually received. 

As it turns out, either of the Indians offers may turn out to be better because of the impact that the Coronavirus has had. But based on the published numbers which do not show any Coronavirus impact, Mr. Lindor will receive 52 million through his sixth season. Assuming his free agency lands him a 30 million a year contract, add two years in at 60 million for a total of 112 million. For a paltry 7 million "extra dollars",  Mr. Lindor will have to wait until his 9th year in the league to come out ahead when he could have come out ahead 7 tears earlier! And, if Mr. Lindor had made any kind of wise investments with a front loaded contract, the front loaded contract probably nets him anywhere from 5 million to 25 million extra since it was all guaranteed up front early on.

Mr. Lindor really has yet to see a return on his decision to wait it out. Lindor never delivered a championship season in Cleveland and his leaving does tarnish his overall love of the game reputation just a bit since in Cleveland not only was he highly regarded, but his health was valued and he was never rushed or forced to play when injured.

Mr. Lindor tries to take the position that he has never said he could lead or carry a team on his shoulders to a championship, and yet, he wants to be paid like someone who can.

Possibly the cruelest irony is Francisco Lindor is from Puerto Rico and the Cleveland Indians are the Puerto Rico of MLB, too poor to buy a championship, but too proud and strong enough to run together an impressive 7 years of .500 or better baseball and one of the best winning percentages during that seven year in all of baseball. 

The Indians never made it clear to Lindor that winning a championship in Cleveland would be almost identical to Puerto Rico winning the World Series and that this could happen if Mr. Lindor did not tie his value to getting the biggest contract possible. 

It appears Mr. Lindor wants to be on a team that can afford to pay their top 2 or 3 players 30 million a year. Yet that is a song and dance that has torpedo'd other teams with 2 or more future Hall of Fame players such as the Detroit Tigers and the California Angels.

It is very rarified air to find teams that can pay 2 players 30 million or more each, per season and still win a championship. It may be even thinner air to find a team that can pay 2 players 30 million a year and also be a perennial playoff and championship caliber team.

The Indians now face a similar situation with their star pitcher, Shane Bieber. It is my personal opinion that Mr Beiber's stuff did not look as good as the Yankees Gerrit Cole during the 2020 playoffs. And yet, during the regular season Beiber looked fantastic. 

Cole appears to throw about 3 to 4 miles an hour faster on his fastball and his pitches have an unhittable rise to them. Beiber seems better at pin point accuracy but it seems in terms of raw pitching, Cole has strike out pitches and Beiber has fake out pitches. During the regular season fake out pitches work well because a pitcher is constantly facing new opponents and he can feast on the more average teams. However, a disciplined team may not bite at Beiber's fake out pitches and suddenly he may only be a 5 or 6 inning pitcher.

Do the Indians risk a front loaded contract on Beiber or has he already maxed out and may ultimately be the second best pitcher on the team, rather than the best? Or is Bieber's work ethic and overall mental make-up and his overall demeanor a keeper and the Indians should make an effort to keep him here long term?

And if the Indians do make a long term offer, do they front load it, or not?

Monday, May 27, 2019

Sixty Minutes uses phrase "Simple Math" in it's Sunday, May 26, 2019 episode during their Horse Adoption Segment.

Nice to see Sixty Minutes acknowledge and use the concept of "Simple Math" to describe how the U.S. Government was able to save the lives of Wild Horses.

Perhaps due to the Memorial Holiday weekend I have been unable to find a link to the story. When I find it I will add it.

Sunday, April 7, 2019

2019 NBA Draft Lottery could produce some Disappointed Bottom 3 or 4 team Draft Position Results.

Edit update, (Monday, May 27, 2019) when I wrote this article I somehow had incorrectly concluded that the three worst records could not pick lower than five, so my prediction was of course much too generous as a result. end of update.

The NBA continues to tweak with the NBA Draft Lottery. In an effort to not reward teams that perennially lose and end up with really great draft pick positioning as a direct result, the NBA once again has changed the mathematical probabilities regarding how the bottom four teams will fare in terms of lottery positioning for the 2019 NBA draft.

The teams with the four worst records will have a cumulative chance of 56% of getting the first pick in the 2019 NBA Draft. Stated another way, the top three teams with the worst NBA records only have about a 44% chance of getting the first pick in the 2019 NBA Draft.

If the first pick in the Draft does not go to one of the three worst won loss record teams in the league, we could see a 3,4,5, draft position for those three teams. Of course all variations are in play. We could see 2,4,5 for the three worst records. 

Simple Math Detective is relatively certain we won't see a 1,2,3 finish for the three teams with the worst record in the NBA. Once one of the three teams does place, it just means at least one of the remaining two of the top three teams with the worst record will probably fall an extra position. I doubt we will see a 2,3,4 finish for the top three teams with the worst records in the NBA.

The 2019 NBA draft will probably leave a lasting bad memory for at least one if not two of the three teams with the worst records in the league.

What we won't see, we won't see a 1,2 finish among the three teams with the worst record, and we certainly won't see a 1,2,3, finish. Since we probably won't see the number one pick going to any of the worst three, that leaves a 2,4, and 5 scenario for the three teams with the worst record. 

After the 2019 draft is done, there is a clever tweak the NBA could make so the 2020 draft probably better reflects the delicate balance of the worst teams getting the best picks and the slightly better than worst teams retaining a chance to move up in the Draft.

Wednesday, March 13, 2019

College Bribery Enrollment Scandal Misses the Simple Math Solution.

The entire College Bribery Scandal seems to be another adventure in pointless class envy that everyone will take way too seriously, and could send some parents to jail. Or the Feds will use their Checkbook Justice Mafia to fine rich people so they can fund the Treasury. None of what is going to happen will help the people who need it most, Middle and Lower Income class kids who want a chance to attend a prestigious University.
I don't care how much the College bribes were. What I don't understand is why couldn't the Ultra Wealthy Parents simply pay into a College Scholarship fund that would give less affluent but deserving students a free ride? 

If a Parent is willing to pay a 1/2 million dollar bribe to get  a Daughter or Son into a prestigious college, and then pay the tuition for their own son or daughter on top of that bribe, why not just create a special fund in which Affluent Parents donate a 1/2 million dollars so a certain number of other kids get a free ride to the college, and their own kid gets to attend as well as long as they pay for their tuition.

While law and order will bellow that bribery is against the law, why isn't lack of common fiduciary sense against the law? If there are people out there willing to make extraordinary payments to ensure their kids get into a college, then just let them make the payment directly to the college so less wealthy families can benefit. 

Imagine if a half a million dollar bribery check had been split into ten 50,000 dollar scholarships. Would anyone really care that in exchange for that tremendous donation, the Donor could then pay the regular tuition price to have their own child admitted to the College?

In the absence of this common sense approach, I am hoping a Judge will see through the entire Federal Scheme to shame people who should have first been given the opportunity to make a significant donation to the school so those less wealthy could attend in exchange for the privilege of then paying full tuition price for their own child's enrollment.

Friday, February 22, 2019

Charlie Sheen earned more money from ONE episode of ANGER MANAGEMENT than Jussie Smollett's Total Salary for his first three years on EMPIRE.

Jussie Smollette is the victim of Financial Abuse by Fox. Charlie Sheen was paid more for ONE episode of Anger Management (2 million dollars), then Jussie Smollett's total salary for his first three years on Empire, around 54 episodes.
Both shows were created for Fox.

In October of 2016 Newsweek was reporting that Smollette was still being paid 20,000 dollars an episode. Huffington Post reported Smollette was making 65,000 per episode for this past 2018-2019 season. The Problem is that a 20,000 dollar starting Salary meant any raise would look significant and generous based on percentages so it may have taken Smollette several years to finally get to the 65,000 per episode mark, which for a four year actor on the first or second highest rated show on Fox, and the show is an hour long, is still well below where the salary should be. 

If Smollette had been paid based on Empire's rating's popularity, his Salary for this past Season should have been at least 100,000 per episode instead of 65,000. But just as importantly, the initial low salary creates a negative cascading affect in which each year's raise still keeps Smollette below what he should have been being paid all along.

It may be safe to presume that Smollette was basically underpaid by about 20,000 to 30,000 per episode over the life of the show, presently 74 episodes.  That's around 1.5 to 2.3 million dollars of underpayment Smollette never got. 

Smollette was taken advantage of by the same Network that paid Charlie Sheen 2 million dollars per episode when Anger Management hit its 100th show. However, Sheen was still making 1.8 million prior to the 100th episode of Anger Management.

It appears that Sheen's behavior, which included Drugs, Drinking, Prostitutes and eventually acquiring HIV and possibly sharing his HIV with others did not deter Fox from paying Sheen 2 million per episode for Anger Management. Even if the HIV news was after the Series Anger Management had concluded its run, the other unruly behavior sure didn't seem to have any type of negative affect on Sheen's salary.

Were the Female co-stars on Anger Management underpaid? Sheen may have gotten his female co star Selma Blair fired when she questioned his work ethic. When will Fox be investigated for their Contracting Practices that could be the equivalent of Financial Abuse for Minorities and Female Actors?

Although Smollette was a co-star on Empire and Sheen was the Lead on both 2 and 1/2 Men and Anger Management, the disparity between what Sheen was making per episode to what Smollette was getting per episode over the first year or two was a remarkable 9,000% to 10,000% difference. By the end of year four the percentage difference might have been reduced to perhaps 3,000% to 4,000% difference.

It's not as if Smollette wasn't talented. Compare Smollett and Sheen's Singing abilities...This is Charlie Sheen directly below.

How Can Jussie Smollett compete with Charlie Sheen?
Simple Math Detective is concerned that it is in Hollywood's best interest to keep the pay disparity between what Smollette should have been making and what he was making a secret and instead go with the Narrative that Smollette may have behaved criminally. 

I get that what Smollette is alleged to have done can be construed as illegal, but it seems that years of being underpaid, aka financial abuse, took its toll, and I hope that part of the Smollette Story does not continue to be obfuscated by the Media.

Meanwhile, Charlie Sheen attempts to rise for the third time.

Wednesday, February 20, 2019

A Presidential Popularity Puzzle for you to Figure out.

There is one President in the Presidential Chart Below that is different from all the other Presidents, can you find it? Hint, It is not about how long they served as President.