01-11-2010, 12:16 PM
<!--quoteo(post=75351:date=Jan 11 2010, 11:07 AM:name=jstraw)-->QUOTE (jstraw @ Jan 11 2010, 11:07 AM) <{POST_SNAPBACK}><!--quotec-->I'm no accountant but doesn't this reduce the opportunity costs? If I have to give you 20 million today, it costs me 20 million...but if I have to pay you a million a year for 20 years, it saves me a ton. I can buy an instrument that will do that for way less than 20 million.
Right?<!--QuoteEnd--><!--QuoteEEnd-->
Yes. But you are assuming the Reds buy the instrument this year. The Reds have been rumored to be in bad financial shape. My guess is that they don't buy the instrument and end up paying on the dates the contract specifies. This in turn would limit their felxibility in future years. Basically they are putting Chapman's salary on an interest free credit card, which can be a good thing, if planned correctly. But can also be a real bad thing if it is not.
Right?<!--QuoteEnd--><!--QuoteEEnd-->
Yes. But you are assuming the Reds buy the instrument this year. The Reds have been rumored to be in bad financial shape. My guess is that they don't buy the instrument and end up paying on the dates the contract specifies. This in turn would limit their felxibility in future years. Basically they are putting Chapman's salary on an interest free credit card, which can be a good thing, if planned correctly. But can also be a real bad thing if it is not.