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# Math of the UFA contract

 01-16-2013, 04:25 PM #1 Djp Registered User     Join Date: Jul 2012 Location: Seattle,WA Posts: 7,046 vCash: 500 Math of the UFA contract Based on my understanding of the new contract rules 1. A contract can only be 7 yrs if they change teams, 8 if the team is resigning him 2. year to year salary change cannot exced a 35% change 3. The max year of a contract can be no more than double the minimum of a contract. As a result of these rules.....some typical contracts are mow illegal.... For example....4 yr \$7M contract making \$1.0M, \$1.5M, \$2.0M, \$2.5M...it violates the max/min yr ratio >2. to satisfy it it needs to be restructured \$1.3M, \$1.6M, \$1.9M, \$2.2M IF a team signs a UFA for 7 rs and they structure the salary where the player get a raise every year can not exceed a year to year raise of 10% S=salary, S1=salray in year 1 r= pct rate of increase max salary in the salary in the final year of contract s8=S1*(1+r)^7 max/min <= 2 in other words (1+r)^7<=2 r<=2^(1/7)-1 = 0.10409....> .10=10%

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