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ProFSL Front Office => Franchise GM: Archives => Franchise GM: History Books => Franchise GM => MLB DYNASTY GM HOME => Franchise GM: FGM Commissioner News & Tid Bits => Topic started by: Colby on April 23, 2010, 07:38:26 AM
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Restructuring Contracts
To keep it simple, here is how I propose it.
- Deal must be multiple years -- can't be last year of contract.
- Annual salary must be $4m+
- Restructuring allows annual salary to be reduced if player's market value (extension price) is less than or equal to half that of what he is paid.
- Total reduction in salary is converted into a guaranteed signing bonus during the current (or upcoming for off-season) year.
No taxes or anything for this since much more is guaranteed to the player. Like the contract buyout, this would be a rarely used contract strategy, but it correlates well to real life and keeps all of the money there for the player.
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I like this a lot and would love it if it would have been a rule a year ago. I would certainly use this to front load Chipper's contract. One issue I have with this is that a GM could do this the last day of the season. Perhaps it shouldn't be allowed from the trade deadline to the end of the playoffs?
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I haven't had a chance to think this one through yet, but if we did pass it I think it should include a clause that the contract must be at least 1 year old before it can be restructured - we are not allowed to front-load contracts during FA, we shouldn't be able to circumvent that through this rule (would make bidding too complex).
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I haven't had a chance to think this one through yet, but if we did pass it I think it should include a clause that the contract must be at least 1 year old before it can be restructured - we are not allowed to front-load contracts during FA, we shouldn't be able to circumvent that through this rule (would make bidding too complex).
Correct. I want this to be used for special circumstances like the buyout. I think the buyout has only been enacted twice so far. Teams still avoid it because they want the cap room for the current year.
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I'll agree, a contract should have an age of at least one year before a GM can restructure. Everything else looks pretty good so far with this, when Colb wants a vote (and barring any other changes), I think I'll approve.
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This has been sitting around for two weeks, but I think we have everything ready for a vote. Jake appears to have support for this, as well as do Ben and I, but I want to hear something official.
I vote YES.
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Sadly, I do not have a vote but I think with the requirements being atleast a 1 year old AND before the trade deadline, makes this a very good option. I can't think of any loopholes with the current requirements.
~MTK
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Colby, does your proposal include Mike's idea of this transaction being prohibited from the trade deadling to the end of the playoffs?
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Colby, does your proposal include Mike's idea of this transaction being prohibited from the trade deadling to the end of the playoffs?
Correct... here is the updated proposal.
Restructuring Contracts
- Deal must be multiple years -- can't be last year of contract.
- Annual salary after such restructuring must be $4m+
- Restructuring allows annual salary to be reduced if player's market value (extension price) is less than or equal to half that of what he is paid.
- Total reduction in salary is converted into a guaranteed signing bonus during the current (or upcoming for off-season) year.
- Restructuring of contracts is not allowed during the period after the trade deadline and before the off-season.
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I'll approve.
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This will create a more liquid market for long-term contracts. This is a good rule to put in place.
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We need some voting action on this old topic.
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Not that I have a vote, but I am a little fuzzy on what is being proposed here. Can someone use an example of a current player to break it down for me?
Thanks
D
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Restructuring Contracts
- Annual salary after such restructuring must be $4m+
- Restructuring allows annual salary to be reduced if player's market value (extension price) is less than or equal to half that of what he is paid.
- Total reduction in salary is converted into a guaranteed signing bonus during the current (or upcoming for off-season) year.
- Restructuring of contracts is not allowed during the period after the trade deadline and before the off-season.
Deal must be multiple years -- can't be last year of contract.
This part was taken out because it doesn't matter if there is one year left. The annual salary would remain the same.
Here is an example using hypothetical rankings and market values with a real contract.
Derek Lowe, $15.5m (2012)
Let's say his market value is $5.5m, and the team owning him at the time has plenty of cap space. The restructuring says that his new annual say is $5.5m. However, the leftover money now front-loaded to him in the form of a bonus (100% guaranteed). The signing bonus is then a whopping $30m.
Now, let's say the team doesn't have that cap room, but they want to restructure the contract a little bit. Well, that example is the extreme... the team can play the middle ground and reduce the annual salary to $10.5m per say for a signing bonus of $15m.
Such restructuring of contracts is not allowed from August 1st to the end of the playoffs to prevent teams from abusing the restructuring to make it count for an additional season.
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I cringed when I read that name. D. Lowe is a cuss word around these parts lol.
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I'll approve.
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ill approve.......been a little busy, sorry fellas
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I do NOT approve. We already have a rule on the books for buyouts.
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I do NOT approve. We already have a rule on the books for buyouts.
Buyouts are for dropping the player.
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hey, like in the real leagues, do bonuses move around with a player? Say Lowe is signed to the 5.5, the bonus stays with the team who negotiated the restructure, right? If he's traded, from team A to team B, team A would still have the bonus on their books correct?
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hey, like in the real leagues, do bonuses move around with a player? Say Lowe is signed to the 5.5, the bonus stays with the team who negotiated the restructure, right? If he's traded, from team A to team B, team A would still have the bonus on their books correct?
Bonuses move around with players in this league.
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Approve
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Colby,
Thanks for the clarification, but I still don't approve. I don't feel this is something necessary or compelling enough to warrant a new rule.
Roy
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Bonuses move around with players in this league.
I don't believe that is true - signing bonuses are paid when the contract is signed (or in this case re-structured) and then final... the money has been spent, there is nothing to move.
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Colby,
Thanks for the clarification, but I still don't approve. I don't feel this is something necessary or compelling enough to warrant a new rule.
Roy
Personally I approve of the rule, but would be interested to heard the counter argument before committing - maybe this isn't a huge impact, but why not add it anyway?
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I don't believe that is true - signing bonuses are paid when the contract is signed (or in this case re-structured) and then final... the money has been spent, there is nothing to move.
We have kept things simple and the bonuses are basically a guaranteed part of the contract for one year. Therefore, bonuses on players have moved around. One example I can attest to is Max Ramirez (I signed to Pittsburgh, gave a bonus, but now that entire contract is Philly's).
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We have kept things simple and the bonuses are basically a guaranteed part of the contract for one year. Therefore, bonuses on players have moved around. One example I can attest to is Max Ramirez (I signed to Pittsburgh, gave a bonus, but now that entire contract is Philly's).
I guess that's another discussion, but I'll say in principle I don't agree - if the maintenance is too much of a pain then so be it, but I don't think it's ideal.
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I guess that's another discussion, but I'll say in principle I don't agree - if the maintenance is too much of a pain then so be it, but I don't think it's ideal.
The maintenance involves separating the bonus out. You bring a good point to the table that Dan needs to be part of the discussion on... but that doesn't play a role here.
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Well yes and no - I think how we handle this for prospects has no bearing here, but if we're going to apply the same ruling to re-structured contracts then whether or not those bonuses transfer in a trade is important.
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The maintenance involves separating the bonus out. You bring a good point to the table that Dan needs to be part of the discussion on... but that doesn't play a role here.
Im pretty sure my last trade I didnt inherit any prospect bonuses (Mier)...am I wrong?
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Im pretty sure my last trade I didnt inherit any prospect bonuses (Mier)...am I wrong?
I have in all of mine...
~MTK
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With it being made clear that bonuses stay with a team, let's vote on this issue. It is my understanding that Jake and I vote YES and Roy votes NO.
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With it being made clear that bonuses stay with a team, let's vote on this issue. It is my understanding that Jake and I vote YES and Roy votes NO.
Correct, my vote remains yes.
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:iatp:
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:iatp:
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approve
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Restructuring Contracts
- Annual salary after such restructuring must be $4m+
- Restructuring allows annual salary to be reduced if player's market value (extension price) is less than or equal to half that of what he is paid.
- Total reduction in salary is converted into a guaranteed signing bonus during the current (or upcoming for off-season) year.
- Restructuring of contracts is not allowed during the period after the trade deadline and before the off-season.
This part was taken out because it doesn't matter if there is one year left. The annual salary would remain the same.
Here is an example using hypothetical rankings and market values with a real contract.
Derek Lowe, $15.5m (2012)
Let's say his market value is $5.5m, and the team owning him at the time has plenty of cap space. The restructuring says that his new annual say is $5.5m. However, the leftover money now front-loaded to him in the form of a bonus (100% guaranteed). The signing bonus is then a whopping $30m.
Now, let's say the team doesn't have that cap room, but they want to restructure the contract a little bit. Well, that example is the extreme... the team can play the middle ground and reduce the annual salary to $10.5m per say for a signing bonus of $15m.
Such restructuring of contracts is not allowed from August 1st to the end of the playoffs to prevent teams from abusing the restructuring to make it count for an additional season.
:judge: Approved 5-1.
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:iatp:
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Are we allowed to restructure the same deal more than once? It seems that this could be an administrative nightmare. Also, many of the contract extension values will be lower next year because of this. It gives teams the ability to cheat and throw money under the cap for this year to change the entire market landscape in the future. I think the losing vote had something right when they voted against this.
Just me $0.02 but the RC should reconsider this and realize how destructive this could be for the league's future.
This was mentioned today about our recent legislation. This was not my intention with the original proposal, and I didn't think about this one upon it being passed.
I want the RC to consider a first-ever repeal this amendment to the rules. Roy may have been spot on when suggesting that we shouldn't do this and keep it simple with our current rules.
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Lets see how the discussion plays out in the other thread before we worry about a repeal... as I posted there, I'm not convinced yet that we made a mistake.
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Lets see how the discussion plays out in the other thread before we worry about a repeal... as I posted there, I'm not convinced yet that we made a mistake.
Okay, I'll process the Cubs restructuring of Meche. You bring up a good point how it causes inflation on the FA market pumping up the extension values.