Padres and Latos reach $35m extension.

[joeshmoe]

At long last the Padres would like to extend Mat Latos using the prospect extension clause.  I believe this would begin next season.  The math looks like this:

Mat Latos was 25th best in 2011 and 28th overall in 2010 (amongst SP).  25th best SP is due 11m.  With the Prospect Extension
2013 - 4.4 = 5m
2014 - 5.5 = 6m
2015 - 6.6 = 7m
2016 - 7.7 = 8m
2017 - 7.7 = 8m

What a deal for a 2 on most teams and still has potential!

[Colby]

Prospect extensions must have flat annual salaries.  You will take the $11m and multiply it by a factor.

[joeshmoe]

Prospect extensions must have flat annual salaries.  You will take the $11m and multiply it by a factor.

I know, and I did that.  10% of 11m is 1.1m  So if you subtract 60% in the first year you would do 11m - 6.6m = 4.4 rounded up = 5m

[h4cheng]

Only a single factor gets applied to the market value which in this case is 60%

[joeshmoe]

Only a single factor gets applied to the market value which in this case is 60%

Why 60%?

[nerwffej]

Any player who is currently under a prospect contract may be signed to a regular contract extension (see below), but they may also be signed to a prospect extension.  Such an extension must be a 5-year deal where the annual salary is X% of their market value.  The resulting annual salary must be no less than $4m.  No matter what the current prospect contract is, the prospect extension kicks in the following year at the rate based on when the contract is given.

For the 20XX season, the following percentages would be used per prospect status.

20XX - 60%
20XX+1 - 50%
20XX+2 - 40%
20XX+3, n/a - 30%

There is a window after the season in which the multipliers above are still in effect.  This was a rule effective June 16th, 2011 for expiring prospect contracts.  Prospect extensions on expired prospect contracts will be the only type of extensions allowable for expired contracts in the offseason.  Therefore, after the 2011 regular season is over, a P-2011 contract is still eligible for the prospect extension at the 2011 rate.  This window for prospect extensions is open until one week prior to the beginning of offseason free agency.

Latos in last year of prospect is elgible for 60% discount

[joeshmoe]

Any player who is currently under a prospect contract may be signed to a regular contract extension (see below), but they may also be signed to a prospect extension.  Such an extension must be a 5-year deal where the annual salary is X% of their market value.  The resulting annual salary must be no less than $4m.  No matter what the current prospect contract is, the prospect extension kicks in the following year at the rate based on when the contract is given.

For the 20XX season, the following percentages would be used per prospect status.

20XX - 60%
20XX+1 - 50%
20XX+2 - 40%
20XX+3, n/a - 30%

There is a window after the season in which the multipliers above are still in effect.  This was a rule effective June 16th, 2011 for expiring prospect contracts.  Prospect extensions on expired prospect contracts will be the only type of extensions allowable for expired contracts in the offseason.  Therefore, after the 2011 regular season is over, a P-2011 contract is still eligible for the prospect extension at the 2011 rate.  This window for prospect extensions is open until one week prior to the beginning of offseason free agency.

Latos in last year of prospect is elgible for 60% discount

so what will be the extension?

[MillerTime]

so what will be the extension?

If the 11m is correct on his ranking.

= 11 * .60 = $6.6m (2017)

He will remain at $0.5m in 2012.

[nerwffej]

If the 11m is correct on his ranking.

= 11 * .60 = $6.6m (2017)

He will remain at $0.5m in 2012.

Asking so have right in my head also
Isn't it since on last year -60% so should be 4.5?

[Paul S.]

$11m is the correct amount x 60% = $6.6m rounded to $6.5m from 2013-2017.  2012 will remain $0.5m (P-2012).