The Mets and David Wright’s agents are having a disagreement about deferred money in the proposed contract, Mike Puma reports in the New York Post, according to an industry source with knowledge of the negotiations.
Puma believes the contract offered to Wright translates to significantly less dollars in the short term, although its unclear as to how much money would be deferred.
Matthew Cerrone, MetsBlog.com:
This is actually a pretty big sticking point, since the Time Value of Money can significantly reduce how much cash ultimately ends up in Wright’s bank account.
The way I understand this, similar to Johan Santana and other big-name free agents of the past, the Mets likely deferred money to be paid to Wright long after his deal expires. For instance, the present-day value of Santana’s contract (when it was signed) was actually said to be $121 million, as opposed to the $136 million that was announced. Why? According to reports, $5 million of his salary was deferred annually at 1.25% compounded interest (payable starting seven years after the season in which the salary was earned). It’s a nice, stable retirement plan, I suppose. But, it’s also less cash-in-hand now, which may have gotten more than a 5% return had it been better invested.
It seems to be a recurring tactic with this Ownership. And, while Santana and others seemed to have no problem with it, clearly Wright does. That’s his prerogative, especially if he believes he’d do a better job investing than the Mets. On the other hand, the Mets no doubt prefer to defer the payments so they have more capital on hand in the short-term (either to pay down debt or add new players to the roster).
Frankly, this is all a little technical for me. I simply want to see Wright sign a deal and I want the Mets to know how best to move forward on rebuilding the roster this winter. But, I get it. It’s David’s life and personal finances, and so I’d be a stickler too; and probably equally angry if it was all made public, as well.