Why are most contracts backloaded?

[GamelToe]

I get the time value of money aspect, but is there any other reason? With football, you could always see a grab and hold-out type scenario. But, if you plan on keeping a guy (like Braun) throughout the duration of his contract, why heavily backload it? In case he spontaneously retires? Gets hurt?

[jjkoestler]

A dollar today is worth more than a dollar tomorrow.

 

Backloaded contracts provide better exit strategy

[GAME05]

at the same time, sometimes i wonder why we haven't really seen any front-loaded contracts. i understand that money loses value with inflation, and that a team can invest a lot of that money to recoup some. but we see a lot of big contracts signed with deferred money, that player declines in ability, but then becomes untradeable because of a high salary late in the contract. front-load the contract and you certainly lose some money from deferred payments, but you'd be benefitting the player's trade value. maybe you'd be able to trade a fading star if he's only owed $12 million more instead of that star being untradeable for being owed $20 million.

[Roderick]

at the same time, sometimes i wonder why we haven't really seen any front-loaded contracts.

There were some frontloaded contracts in the NFL to try and steal free agents away because of the hard cap. Seem to remember the offensive lineman that went to/from Vikings/Seattle because the other team couldn't make the numbers work for the next year.

 

I suspect the backloaded contract is because of the baseball inflation rate and trying to maintain a somewhat even budget. If the baseball salary inflation rate was 2% instead of 7% (or whatever it is), it wouldn't be such a big deal to frontload more. By this time next year, Wolf's 2013 option will probably look like a decent value, whereas a couple of years ago it seemed like a forgone conclusion that it wouldn't be exercised.

[Dollarbill13]

at the same time, sometimes i wonder why we haven't really seen any front-loaded contracts.

There were some frontloaded contracts in the NFL to try and steal free agents away because of the hard cap. Seem to remember the offensive lineman that went to/from Vikings/Seattle because the other team couldn't make the numbers work for the next year.

 

I suspect the backloaded contract is because of the baseball inflation rate and trying to maintain a somewhat even budget. If the baseball salary inflation rate was 2% instead of 7% (or whatever it is), it wouldn't be such a big deal to frontload more. By this time next year, Wolf's 2013 option will probably look like a decent value, whereas a couple of years ago it seemed like a forgone conclusion that it wouldn't be exercised.

The Viking/Seattle thing had more to do with a clause that would cause the entire contract to be guaranteed. But yes, front loaded contracts can work better in a league with a hard cap because there might be more cap space available in current years than future years due to raises built into other players' contracts.

[logan82]

at the same time, sometimes i wonder why we haven't really seen any front-loaded contracts.

There were some frontloaded contracts in the NFL to try and steal free agents away because of the hard cap. Seem to remember the offensive lineman that went to/from Vikings/Seattle because the other team couldn't make the numbers work for the next year.

 

I suspect the backloaded contract is because of the baseball inflation rate and trying to maintain a somewhat even budget. If the baseball salary inflation rate was 2% instead of 7% (or whatever it is), it wouldn't be such a big deal to frontload more. By this time next year, Wolf's 2013 option will probably look like a decent value, whereas a couple of years ago it seemed like a forgone conclusion that it wouldn't be exercised.

The Viking/Seattle thing had more to do with a clause that would cause the entire contract to be guaranteed. But yes, front loaded contracts can work better in a league with a hard cap because there might be more cap space available in current years than future years due to raises built into other players' contracts.

I thought that one had a clause that guaranteed he would be the highest paid lineman no his team. He would have cost more for the Vikings than Seattle because of another Viking lineman's contract.

[Dollarbill13]

It was that if he wasn't the highest paid offensive lineman on his team that his whole contract would immediately become fully guaranteed.