Capitals Free Agency II (Joey Crabb's Playground)
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07-02-2012, 01:04 PM
Waiting on the Isles
Join Date: Oct 2002
Location: Brooklyn, New York
Fwiw, the Kovalchuk contract, often cited as the stupidity of the long cap circumventing deal, has a NPV of $74.7 million. Assuming those loopholes aren't available, I believe Kovy could have gotten a 10 year $95 million deal. That carries a NPV $73.4 million. I'm using a discount rate of 5% on both. The rate doesnt matter as long as you use the same one on both.
Basically, the front loaded cap circumventing deals don't really hurt the owners in the pocketbook (at least in this case) and it makes the players happy.
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