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Math of the UFA contract

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01-16-2013, 04:25 PM
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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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