2K24: San Diego Padres

[Ken]

and if you don't get a MLB contract hopefully they don't have to pay back anything? I would hope that is part of the deal

correct.

[The Feral Slasher]

correct.

i was a bit worried they would be knocking on my door

[chancellor]

Are we still talking about Tatis? If so, some serious, epic proportion mismanagement would have to occur for him to be broke when he is done playing. Maybe Revo needs to reach out to the kid .

This!!

[Ken]

This!!

wait, "this" doesn't make sense considering I was talking about Sr, replying to the comment about his dad

[Bene Futuis]

I was replying to Bene but can't find his comment now.

I don't think this is a scam. In fact I think it's a great option to give some minor league players. The majority of them never make it and never have to pay it back. Those who do make it and get huge contracts are effectively paying for those who don't.

I deleted my comment because I don't really know if this is a scam or if it's legit. I deal with very, very similar offers relatively frequently and they are horrifically bad deals just about 100% of the time. I have no idea what the terms of Tatis' deal were, though.


Sounds like you're describing something akin to angel investing, as opposed to venture capitalism. I am skeptical about that claim but really have no idea at all. Angel investing would be a very novel idea for teenage baseball players.

[Ken]

I deleted my comment because I don't really know if this is a scam or if it's legit. I deal with very, very similar offers relatively frequently and they are horrifically bad deals just about 100% of the time. I have no idea what the terms of Tatis' deal were, though.


Sounds like you're describing something akin to angel investing, as opposed to venture capitalism. I am skeptical about that claim but really have no idea at all. Angel investing would be a very novel idea for teenage baseball players.

~80% of the players they pay never get mlb contracts, and never pay back the "loan". So in some ways they are boosting up the random minor league players. They use their own custom algorithm to determine which ones to invest in (often not top 100 type prospects), and their contracts are individual to each prospect based on their own projected ROI.

I think it's a really cool company, it was started by a former player.

[cavebird]

I don't see why people are saying that Tatis sold himself short with this deal. He got paid a premium. Acuna and Albies, sure. But Tatis got $340 million. The odds of career ending injury or performance decline (possibly caused by injury) are very real. This seemed like a fair deal for both sides.

[Sour Masher]

~80% of the players they pay never get mlb contracts, and never pay back the "loan". So in some ways they are boosting up the random minor league players. They use their own custom algorithm to determine which ones to invest in (often not top 100 type prospects), and their contracts are individual to each prospect based on their own projected ROI.

I think it's a really cool company, it was started by a former player.

I wonder what their algorithm is based on. Is it public who they decide to give money to? Might be interesting to see how good they are at identifying not top 100 prospects that make the majors. They have a strong financial incentive, obviously, to pick players who will be better than expected.

[Ken]

I wonder what their algorithm is based on. Is it public who they decide to give money to? Might be interesting to see how good they are at identifying not top 100 prospects that make the majors. They have a strong financial incentive, obviously, to pick players who will be better than expected.

No they are very private.

[ThatRogue]

I don't see why people are saying that Tatis sold himself short with this deal. He got paid a premium. Acuna and Albies, sure. But Tatis got $340 million. The odds of career ending injury or performance decline (possibly caused by injury) are very real. This seemed like a fair deal for both sides.

He didn’t get paid a premium. He took a discount, probably due to the factors you have identified (injury, performance and market risk).

[Ken]

He didn’t get paid a premium. He took a discount, probably due to the factors you have identified (injury, performance and market risk).

What pre-arb contact are you comparing to in order to call this a discount

[Sour Masher]

So, what is the over-under on saves for Pomeranz? 15? That bullpen is deep and could shake out as a committee, but Pom seems to be the best arm there.

[ThatRogue]

What pre-arb contact are you comparing to in order to call this a discount

Last season, Bellinger received $11.5 million in his first year of arbitration (the record). Arenado set the overall arbitration record with a $26 million dollar deal in his final year. So I'm using the following estimates for Tatis:

2021: $570.5K (final pre-arb season)
2022: $12M (1st arb season...slight increase over Bellinger's record)
2023: $20M (2nd arb season...halfway point of my 1st and 3rd arb year estimates based on Bellinger and Arenado)
2024: $28M (final arb season...$2M increase over Arenado's record)

So that's $60.57 million through his next four seasons, based on historical precedents. Tatis' contract is $340M over the next fourteen seasons, so backing out the $60.57M leaves $279.43M which will be paid over the final ten seasons (an average of $27.943 million per season for that time, as opposed to what he could potentially sign for as a 26 year old free agent).

As compared to free agent deals, Trout's AAV is $35.5M, Arenado's AAV is $32.5M, Betts AAV is $30.4M, Harper & Machado's AAVs are $30M. So, by not letting his arb years run their course, and then signing a FA deal, he locked into a contract with an AAV that's less than other players of his caliber. In exchange, he got the security and protection against injury, performance and market risk.

[GwynnInTheHall]

I am happy he'll be a Padre for quite a while--deal or not.

[cavebird]

Last season, Bellinger received $11.5 million in his first year of arbitration (the record). Arenado set the overall arbitration record with a $26 million dollar deal in his final year. So I'm using the following estimates for Tatis:

2021: $570.5K (final pre-arb season)
2022: $12M (1st arb season...slight increase over Bellinger's record)
2023: $20M (2nd arb season...halfway point of my 1st and 3rd arb year estimates based on Bellinger and Arenado)
2024: $28M (final arb season...$2M increase over Arenado's record)

So that's $60.57 million through his next four seasons, based on historical precedents. Tatis' contract is $340M over the next fourteen seasons, so backing out the $60.57M leaves $279.43M which will be paid over the final ten seasons (an average of $27.943 million per season for that time, as opposed to what he could potentially sign for as a 26 year old free agent).

As compared to free agent deals, Trout's AAV is $35.5M, Arenado's AAV is $32.5M, Betts AAV is $30.4M, Harper & Machado's AAVs are $30M. So, by not letting his arb years run their course, and then signing a FA deal, he locked into a contract with an AAV that's less than other players of his caliber. In exchange, he got the security and protection against injury, performance and market risk.

Yes, and I don't think that is a discount. Of course, every long term deal will be worth less than shorter ones because with fully guaranteed contracts, the short deals have the player assume the performance/injury risk while the team does with the longer ones. Trevor Bauer apparently is determined to be the poster boy for maxing AAV. It will be interesting to see how it works out for him.