MKnight82 Posted April 12, 2018 Share Posted April 12, 2018 1 minute ago, ny92jefferis said: Appreciate you taking the time to look this stuff over. But why is it the better deal? To me contract two still remains the better deal. When you compare the APY C2 is 23 million, C1 is 16.4 million. Both players would receive the 18 million in SB up front. So C2 would actually be paying their player 30 million year one, where C1 would be paying 26 million. The following year C2 is still paying more w/ a difference of 7.9 million. The 3rd year C2 is being paid almost 10 million more. From what I'm looking at C2 is clearly the better deal. Maybe looking at the first year of the deal with the full accelerated SB amount in the first year is something that should be worked into the formula. The difference is the formula cannot differentiate between guaranteed an non-guaranteed money. So the formula assumes the player WILL receive $14.5 mil in Year 4 and $$15 mil in Year 5. We talked about this last year, but you really need a well defined definition of what numbers in these contracts are guaranteed and which are non-guaranteed. For simplicity, I recommend you make all Base Salary non-guaranteed money, and make the signing bonus and all roster bonuses guaranteed money. Then you need varying discount rates for the different money. Signing Bonus - 0% discount rate - this should never change. You get this the day you sign, there is no reason to discount it. Roster Bonuses - 20% discount rate - have this at a pretty standard discount rate because you are going to receive it in the future, but you're losing the ability to invest it right now (or you're missing out on interest you could earn on it right now) Base Salary - 40% discount rate - hit this hard. Not only are you receiving this in the future, but there's inherent risk you might never receive it. Dump the APY from the formula. Add the NPVs of the SB + RB + BS. There's the value of your offer. Link to comment Share on other sites More sharing options...
MKnight82 Posted April 12, 2018 Share Posted April 12, 2018 Offer 1 Signing Bonus Base Salary Roster Bonus $18,000,000 $8,000,000 $1,000,000 $12,500,000 $1,000,000 $14,000,000 $1,000,000 $14,500,000 $1,000,000 $15,000,000 $1,000,000 Discount Rate 0.00% 40.00% 20.00% Present Value $18,000,000.00 $23,757,363.00 $2,990,612.14 $44,747,975.14 Offer 2 Signing Bonus Base Salary Roster Bonus $18,000,000 $12,000,000 $1,000,000 $18,000,000 $1,000,000 $21,000,000 $1,000,000 $0 $1,000,000 $0 $1,000,000 Discount Rate 0.00% 40.00% 20.00% Present Value $18,000,000.00 $25,408,163.27 $2,990,612.14 $46,398,775.41 From your example contracts, I added roster bonuses for visual effect. Both contracts have the same SB and RB. Offer 1 is heavily backloaded in base salary, but discounted so heavily that Offer 2 would win the Player. Link to comment Share on other sites More sharing options...
ny92mike Posted April 12, 2018 Author Share Posted April 12, 2018 8 minutes ago, MKnight82 said: Raise the discount rate and let teams know how the formula works. If a team wants to make a massive short term offer they are better off offering a big signing bonus. We did this, we explained the formula early. The short term deal is the popular contract, and after looking over this sample imo I see why teams are moving to the short term deals now. It's a better fit for both parties. Teams can trade or release players earlier in the contract without massive loss while still being able to offer the player more money. Link to comment Share on other sites More sharing options...
ny92mike Posted April 12, 2018 Author Share Posted April 12, 2018 10 minutes ago, MKnight82 said: Offer 1 Signing Bonus Base Salary Roster Bonus $18,000,000 $8,000,000 $1,000,000 $12,500,000 $1,000,000 $14,000,000 $1,000,000 $14,500,000 $1,000,000 $15,000,000 $1,000,000 Discount Rate 0.00% 40.00% 20.00% Present Value $18,000,000.00 $23,757,363.00 $2,990,612.14 $44,747,975.14 Offer 2 Signing Bonus Base Salary Roster Bonus $18,000,000 $12,000,000 $1,000,000 $18,000,000 $1,000,000 $21,000,000 $1,000,000 $0 $1,000,000 $0 $1,000,000 Discount Rate 0.00% 40.00% 20.00% Present Value $18,000,000.00 $25,408,163.27 $2,990,612.14 $46,398,775.41 From your example contracts, I added roster bonuses for visual effect. Both contracts have the same SB and RB. Offer 1 is heavily backloaded in base salary, but discounted so heavily that Offer 2 would win the Player. This definitely looks way better than the previous numbers. So you agree that C2 is the better deal? Not sure if you included the RB in offer 2 in your calculation but you've got it listed in years 4 and 5 when the contract is only a 3 year deal. The numbers I've got are really close to what you are showing. I did make one minor change to the NPV formulas in that it now matches the contract length. Meaning if the contract length is 5 years, its calculating cell range S16:S20, if the contract is 3 years its calculating cell range S16:S18, which eliminates the blank or zero data from the calculation. Would like to do some more testing obviously, but definitely much closer to having an answer, if not the answer. With moving into the other bonuses. I think we need to create limits to the amount the roster bonus can be for each year. This is the issue we ran into with the highly debated contract that allowed @jch1911 to sign a few players earlier on, by offering less base salary and a heavy roster bonus. By reducing the base salary to the vet min, and offering a 10 million roster bonus the first year. The quick fix was the 120% that you caught earlier. If you could give it a look over, I've opened up the editing rights to cover the additional cells. I changed up the roster bonuses in the first and 4th year of the first offer, so you can see what I'm talking about as it shifted the winning offer to team one, but I think with some building in some criteria that I couldn't have done when the mock was active, we could limit the other bonus amounts based on the base salary being offered, basically limiting the amount of bonus to being less than or equal to the base salary being offered that year. Link to comment Share on other sites More sharing options...
ny92mike Posted April 12, 2018 Author Share Posted April 12, 2018 Off topic slightly but after last years run, both current and future salary cap amounts determined how much a team could offer to any one player. So if you had 10 million and 50 million in available funds, no single contract could exceed that amount. This next run, I think it should be expanded to cover all fa contract offers, meaning if you have the 10 and 50 million in available funds, all 4 of the contract free agent offers cannot exceed that amount. This doesn't include the reserve bids, just the 3 UFA offers and the resign bid. I think this would force better game planning, budgeting as well as provide a more realistic free agency. Also, think it would create more realistic decision making. I haven't done a comparison of irl free agent deals vs the contract offers created in the mock draft. I'm interested to see how our bidding compared to irl, and seeing if we can't get closer to mirroring it. Link to comment Share on other sites More sharing options...
MKnight82 Posted April 12, 2018 Share Posted April 12, 2018 41 minutes ago, ny92jefferis said: This definitely looks way better than the previous numbers. So you agree that C2 is the better deal? Not sure if you included the RB in offer 2 in your calculation but you've got it listed in years 4 and 5 when the contract is only a 3 year deal. Right sorry. But the idea was to show it with the same RB and SB, so if you stuck with the $5 mil RB it would be spread evenly over the first 3 years which would frontload the contract even more, giving Contract 2 an even higher PV. Link to comment Share on other sites More sharing options...
MKnight82 Posted April 12, 2018 Share Posted April 12, 2018 46 minutes ago, ny92jefferis said: With moving into the other bonuses. I think we need to create limits to the amount the roster bonus can be for each year. This is the issue we ran into with the highly debated contract that allowed @jch1911 to sign a few players earlier on, by offering less base salary and a heavy roster bonus. I would recommend 2 actions. 1. Make Roster Bonuses be structured like the Signing Bonuses. Meaning you enter a total amount and the roster bonuses are spread out evenly over the entire contract. This prevents backloading or frontloading the roster bonuses. 2. Make a requirement that a minimum of 50.0% of the year's cap hit is Base Salary. From one of the example contracts it would look like this: Offer 1 Signing Bonus Base Salary Roster Bonus Pro Rated Bonus Cap Hit Required Base Salary $18,000,000 $8,000,000 $1,000,000 $3,600,000 $12,600,000 $6,300,000 $12,500,000 $1,000,000 $3,600,000 $17,100,000 $8,550,000 $14,000,000 $1,000,000 $3,600,000 $18,600,000 $9,300,000 $14,500,000 $1,000,000 $3,600,000 $19,100,000 $9,550,000 $24,000,000 $1,000,000 $3,600,000 $28,600,000 $14,300,000 Discount Rate 0.00% 40.00% 20.00% $18,000,000 Present Value $18,000,000.00 $25,430,772.89 $2,990,612.14 $46,421,385.03 Link to comment Share on other sites More sharing options...
ny92mike Posted April 12, 2018 Author Share Posted April 12, 2018 2 hours ago, MKnight82 said: I would recommend 2 actions. 1. Make Roster Bonuses be structured like the Signing Bonuses. Meaning you enter a total amount and the roster bonuses are spread out evenly over the entire contract. This prevents backloading or frontloading the roster bonuses. 2. Make a requirement that a minimum of 50.0% of the year's cap hit is Base Salary. From one of the example contracts it would look like this: Offer 1 Signing Bonus Base Salary Roster Bonus Pro Rated Bonus Cap Hit Required Base Salary $18,000,000 $8,000,000 $1,000,000 $3,600,000 $12,600,000 $6,300,000 $12,500,000 $1,000,000 $3,600,000 $17,100,000 $8,550,000 $14,000,000 $1,000,000 $3,600,000 $18,600,000 $9,300,000 $14,500,000 $1,000,000 $3,600,000 $19,100,000 $9,550,000 $24,000,000 $1,000,000 $3,600,000 $28,600,000 $14,300,000 Discount Rate 0.00% 40.00% 20.00% $18,000,000 Present Value $18,000,000.00 $25,430,772.89 $2,990,612.14 $46,421,385.03 I like both but the 2nd formula would create a circular reference which is why I suggested the roster bonus be associated with the base salary amount. irl last year there were only 95 contracts that contained a million or more roster bonus, 300 total had a roster bonus of any amount out of 1595 players, so while used teams seem to be getting away from this and shifting to the base guarantee, but unfortunately I've had a hard time trying to use it in a single season mock draft. Perhaps you might be able to figure this one out too, you're on a roll man. Thanks. Link to comment Share on other sites More sharing options...
MKnight82 Posted April 12, 2018 Share Posted April 12, 2018 3 minutes ago, ny92jefferis said: I like both but the 2nd formula would create a circular reference which is why I suggested the roster bonus be associated with the base salary amount. irl last year there were only 95 contracts that contained a million or more roster bonus, 300 total had a roster bonus of any amount out of 1595 players, so while used teams seem to be getting away from this and shifting to the base guarantee, but unfortunately I've had a hard time trying to use it in a single season mock draft. Perhaps you might be able to figure this one out too, you're on a roll man. Thanks. Can you clarify what you’re asking? Link to comment Share on other sites More sharing options...
sparky151 Posted April 12, 2018 Share Posted April 12, 2018 On 4/11/2018 at 1:12 PM, ny92jefferis said: For example: First contract: Contract Terms Length of Contract: 5 APY Amount: $16,400,000 Yearly prorated amount: $3,600,000 $0 Total Contract Amount $82,000,000 Year Status Team ID CONCATENATE Name Pos. Exp. Grade Vet. Min. Base Salary Base Guar. Prorated Roster Bonus W/O Bonus Cap Number Cap Hit 2018 UFA DAL 3736 3736 - Demarcus Lawrence - 43DE Demarcus Lawrence 43DE 4 99.3% $790,000 $8,000,000 $3,600,000 $11,600,000 -$10,000,000 2019 UFA DAL 3736 3736 - Demarcus Lawrence - 43DE Demarcus Lawrence 43DE 5 99.3% $805,000 $12,500,000 $3,600,000 $16,100,000 -$1,900,000 2020 UFA DAL 3736 3736 - Demarcus Lawrence - 43DE Demarcus Lawrence 43DE 6 99.3% $820,000 $14,000,000 $3,600,000 $17,600,000 $3,200,000 2021 UFA DAL 3736 3736 - Demarcus Lawrence - 43DE Demarcus Lawrence 43DE 7 99.3% $960,000 $14,500,000 $3,600,000 $18,100,000 $7,300,000 2022 UFA DAL 3736 3736 - Demarcus Lawrence - 43DE Demarcus Lawrence 43DE 8 99.3% $975,000 $15,000,000 $3,600,000 $18,600,000 $11,400,000 2023 $0 2024 $0 Pass $64,000,000 $18,000,000 $0 $0 $82,000,000 Second Contract: Contract Terms Length of Contract: 3 APY Amount: $24,000,000 Yearly prorated amount: $6,000,000 $0 Total Contract Amount $72,000,000 Year Status Team ID CONCATENATE Name Pos. Exp. Grade Vet. Min. Base Salary Base Guar. Prorated Roster Bonus W/O Bonus Cap Number Cap Hit 2018 UFA DAL 3736 3736 - Demarcus Lawrence - 43DE Demarcus Lawrence 43DE 4 99.3% $790,000 $18,000,000 $6,000,000 $24,000,000 $0 2019 UFA DAL 3736 3736 - Demarcus Lawrence - 43DE Demarcus Lawrence 43DE 5 99.3% $805,000 $18,000,000 $6,000,000 $24,000,000 $6,000,000 2020 UFA DAL 3736 3736 - Demarcus Lawrence - 43DE Demarcus Lawrence 43DE 6 99.3% $820,000 $18,000,000 $6,000,000 $24,000,000 $12,000,000 2021 $0 2022 $0 2023 $0 2024 $0 Pass $54,000,000 $18,000,000 $0 $0 $72,000,000 Of the two contracts, which team 1st or 2nd should be awarded the player? The second contract is obviously much better. The player gets the same signing bonus and higher salaries and is a free agent again 2 years sooner. Link to comment Share on other sites More sharing options...
ny92mike Posted April 12, 2018 Author Share Posted April 12, 2018 1 minute ago, MKnight82 said: Can you clarify what you’re asking? Sure. You suggested using a percentage of the total cap number that the base salary couldn't be below, and I just now realized I tossed you a squirrel....lol. You were talking about setting a limit for the base salary based on the total cap number, which would create a circular reference, so that wouldn't work. But I think we can still achieve something similar by using the roster bonus like signing bonus prorating the amount. The max amount could be configured by the average base salary being offered that we limit only the first 3 years of the contract. Most players receive these type of bonuses earlier and typically don't carry the full length. For example: Year Base Salary Prorated SB Prorated RB Cap Hit 2019 $ 8,000,000 $ 3,600,000 $ 2,433,333 $ 14,033,333 2020 $ 12,500,000 $ 3,600,000 $ 2,433,333 $ 18,533,333 2021 $ 14,000,000 $ 3,600,000 $ 2,433,333 $ 20,033,333 2022 $ 14,500,000 $ 3,600,000 $ 18,100,000 2023 $ 24,000,000 $ 3,600,000 $ 27,600,000 Sum $ 73,000,000 $ 18,000,000 $ 7,300,000 $ 98,300,000 Avg. $ 14,600,000 $ 3,600,000 $ 2,433,333 $ 19,660,000 The base salary average is 14.6M we split that number in half, 7.3M which becomes the maximum amount you can offer as a RB, that is prorated over a 3 year period. Link to comment Share on other sites More sharing options...
ny92mike Posted April 12, 2018 Author Share Posted April 12, 2018 4 minutes ago, sparky151 said: The second contract is obviously much better. The player gets the same signing bonus and higher salaries and is a free agent again 2 years sooner. Right,,,Agreed I think we're all on the same page now, @MKnight82 is resolving a lot of the issues just takes a few minutes of looking at it from different angles. Once we get something nailed down, which I think we're getting really close, we can start fine tuning it using more comparison deals that aren't so black and white. Definitely better than what we used last year already. Link to comment Share on other sites More sharing options...
MKnight82 Posted April 13, 2018 Share Posted April 13, 2018 19 hours ago, ny92jefferis said: Sure. You suggested using a percentage of the total cap number that the base salary couldn't be below, and I just now realized I tossed you a squirrel....lol. You were talking about setting a limit for the base salary based on the total cap number, which would create a circular reference, so that wouldn't work. But I think we can still achieve something similar by using the roster bonus like signing bonus prorating the amount. The max amount could be configured by the average base salary being offered that we limit only the first 3 years of the contract. Most players receive these type of bonuses earlier and typically don't carry the full length. For example: Year Base Salary Prorated SB Prorated RB Cap Hit 2019 $ 8,000,000 $ 3,600,000 $ 2,433,333 $ 14,033,333 2020 $ 12,500,000 $ 3,600,000 $ 2,433,333 $ 18,533,333 2021 $ 14,000,000 $ 3,600,000 $ 2,433,333 $ 20,033,333 2022 $ 14,500,000 $ 3,600,000 $ 18,100,000 2023 $ 24,000,000 $ 3,600,000 $ 27,600,000 Sum $ 73,000,000 $ 18,000,000 $ 7,300,000 $ 98,300,000 Avg. $ 14,600,000 $ 3,600,000 $ 2,433,333 $ 19,660,000 The base salary average is 14.6M we split that number in half, 7.3M which becomes the maximum amount you can offer as a RB, that is prorated over a 3 year period. Can you just have a formula that says the SB + RB cannot be more than 50% of the Cap Hit for the year? Link to comment Share on other sites More sharing options...
ny92mike Posted April 13, 2018 Author Share Posted April 13, 2018 1 hour ago, MKnight82 said: Can you just have a formula that says the SB + RB cannot be more than 50% of the Cap Hit for the year? I could but I don't want to have to police it. Want the formulas to sort it all out, as well as inform the GM if the contract passes inspection, prior to being submitted. Link to comment Share on other sites More sharing options...
ny92mike Posted April 13, 2018 Author Share Posted April 13, 2018 @MKnight82 https://docs.google.com/spreadsheets/d/1AO3GAh-WI7q4OiROvWUd-MVwg8v7h8tnhrsD_Ef4fXw/edit?usp=sharing Worked out another sheet (version 2) that uses your suggested proration of roster bonus. This doesn't include w/o bonus but we could add that similar to the roster bonus, w/ a lessor percentage amount than the roster bonus. As most workout bonuses do stretch the length of the full contract but is typically in the 250k or less range. You cool with that suggestion for w/o bonuses? If so, I'll work that into a new version. Again appreciate you taking the time to help out with this. Edit: I played around with the numbers, reducing the 3 year deal's signing bonus to see when the 5 year deal would outweigh the 3 year deal. Which happened close to once the SB was reduced to 14 million. However, even with offering less SB money the contract still seemed to favor the 3 year deal, so I increased the base salary NPV % rate to 46%. When you get some free time look it over and see if you'd agree. Link to comment Share on other sites More sharing options...
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