FA bidding

[KDoc09]

Just so I'm straight on this...

Under Colby's 90%+yr/130%-yr proposal, Matt Holliday's bidding could look something like this...

$20m/1 yr initial offer
followed by $18m/2 yrs, then $16.5m/ 3 yrs, $15m/4 yrs, $13.5m/5 yrs, as minimums by adding a year per bid

or

$20m/1 yr initial offer
followed by $18m/2 yrs, then $23.5/1 yr in a drop down back to a one year deal

Is that a correct breakdown?

[ChinMusic]

Just so I'm straight on this...

Under Colby's 90%+yr/130%-yr proposal, Matt Holliday's bidding could look something like this...

$20m/1 yr initial offer
followed by $18m/2 yrs, then $16.5m/ 3 yrs, $15m/4 yrs, $13.5m/5 yrs, as minimums by adding a year per bid

or

$20m/1 yr initial offer
followed by $18m/2 yrs, then $23.5/1 yr in a drop down back to a one year deal

Is that a correct breakdown?

That's my understanding of it.

Anyone can jump in and increase the bid on the current year, of course. You don't have to add or take away years, you can add dollars to the existing years

[Colby]

Anything from the RC?  If we are to pass this then it needs to be done ASAP as FA opens up on the 15th.

[Canada8999]

Just so I'm straight on this...

Under Colby's 90%+yr/130%-yr proposal, Matt Holliday's bidding could look something like this...

$20m/1 yr initial offer
followed by $18m/2 yrs, then $16.5m/ 3 yrs, $15m/4 yrs, $13.5m/5 yrs, as minimums by adding a year per bid

or

$20m/1 yr initial offer
followed by $18m/2 yrs, then $23.5/1 yr in a drop down back to a one year deal

Is that a correct breakdown?

Is this what you intended Colby, or would you still need to BEAT the previous offer?  Increasing years +1 for salary at 90% only MATCHES the previous offer...  I think any bidding scheme should force new bids to exceed the previous offer, where Colby's suggested valuation can be used to compare offers of different length (to determine what the equivalent salary would be at the different contract length).

[Colby]

Correct Ben... those numbers are used as an equivalence.  An additional $0.5m would have to be tagged on AFTER the conversion.

[rcankosy]

I believe that FA offers should be judged by the *total* dollars on the contract, not the amount per year.  This method would keep things simple and offer owners an interesting choice.  It would force owners to choose between longer guaranteed contracts at less dollars per year or shorter ones at larger dollars. 

[Dan Wood]

Roy that is true but what if someone offers 10 years at 12 mil a year = 120 mil, and someone offer 4 at 25 = 100 mil, then by total contract the person that offered 12 mil per, would be the winner.

[Colby]

I believe that FA offers should be judged by the *total* dollars on the contract, not the amount per year.  This method would keep things simple and offer owners an interesting choice.  It would force owners to choose between longer guaranteed contracts at less dollars per year or shorter ones at larger dollars.

This may force us into long contract situations.  Then again, I do like the simplicity part of it even though small market teams will drop out of bids that go over $40-50m. 

The other issue with this is that it creates a longer bid process.  How long would it take to get up to $90m total contract for Holliday?  I don't know, it may be worth a shot Roy.

[Colby]

Roy that is true but what if someone offers 10 years at 12 mil a year = 120 mil, and someone offer 4 at 25 = 100 mil, then by total contract the person that offered 12 mil per, would be the winner.

5-year term limit prevents that offer....

[Canada8999]

This may force us into long contract situations.  Then again, I do like the simplicity part of it even though small market teams will drop out of bids that go over $40-50m. 

The other issue with this is that it creates a longer bid process.  How long would it take to get up to $90m total contract for Holliday?  I don't know, it may be worth a shot Roy.

My personal preference is discounting using a time-value of money formula.  If we've decided not to go in that direction because we want to keep it simple, which I understand, then I'd personally prefer to keep it really simple and go with something like this (total value, no discounting schema).