4 Years Deal for Bertuzzi
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10-27-2003, 11:02 PM
Join Date: Jul 2003
Originally Posted by
Hmm... I don't see how you logically come to this conclusion. Any business man would rip up a contract if he felt he would get a better deal by writing a new one. New CBA or not, Burtuzzi was in for a big raise, and by giving him more money now, they get him signed for certain, and more than likely for a better overall sum of money.
I can see why you might want to call it a three year deal, but the fact remains, there is now a contract that exists on paper that is for four years.
They had a legally binding contract that pays Bert 3.7 + incentives for this season. From a pure monetary perspective, it makes no sense (nor was it necessary) for McCaw to invalidate the remainder of this contract and drafts a new one that immediately increases the payment to 6.8 + incentives. Anyone with a little understanding of some basic financial concepts such as 1) the present value of money, and 2) opportunity costs, would agree that the sensible strategy would be to let Bert play out his present contract and then begin the new contract starting next season (whenver that may be). Under normal circumstances, McCaw would have let the present contract run out. However, this is not normal times due to an impending salary cap which might cause operational problems for the franchise. Therefore, by immediately beginning a new contract the requires a bigger payment, McCaw is effectively sacrificing some monetary leverage (power to pay later) to counter some operational risks (possible problems due to a salary cap).
I don't think the Nucks paid over-the-top money for Bert. But by no means do I think it's a bargain. It's pretty much in line with what other top stars are making. I also think that Bert should thank his lucky stars that this whole impending salary cap thing has played out so nicely in his favor, allowing him to make so much money up front, much earlier than he would have otherwise.
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