Did The Cubs Overpay For Sori?

Yes, but not as much as you might have thought, according to David Gassko, who claims in his Hardball Times article “Present Value” that Soriano’s deal is worth about 12.5M per year over eight years in present value.  Fun stuff: ARod’s deal in 2001 is worth $300 million in 2007, and to receive a present value 10 year contract for $300 million today?  $446 million.  More fun stuff: Ted William’s famous $98,000 dollar contract in 1955 is worth $14 million in 2007 dollars.  For those of you who really want to feel queasy, pay close attention to the numbers on Kevin Brown.

6 comments… add one

  • I would consider Sori’s contract basically what the Knicks kept on proposing to Jordan – at 20 mil a year for 3 years, but Jordan would only play for 2..
    Though if it’s backloaded, it might not be that bad, especially considering the increasing rate FA’s keep getting every year..

    Lar November 27, 2006, 1:08 pm
  • Economic forecasting is crucial to these deals, except that the dollars aren’t always worth what they project out to be. Also, the inflation we’ve seen over the last few years is not likely to maintain over the next ten, with a new labor structure in place and revenues coming close to their ultimate caps. (By now, everyone has a new stadium…..) Also worth noting that the the old dollar numbers can be a bit misleading. What $100 1906 dollars equals in 2007 and what $100 in 1906 could by in relation to the dollar equivalent in 2007 is something else.

    YF November 27, 2006, 2:58 pm
  • Yeah. My grandparents own a nice house on the beach, with water rights, a pier, and just about an acre of land that they only paid 34K for. Imagine that?
    Boggles my mind every single time I try to break it down. My father says that at the time, my grandfater, who worked in the iron workers union, made about 20k/year.
    Imagine getting what he got for 2X the normal yearly salary?

    Brad November 27, 2006, 4:22 pm
  • Hey, there are houses here in West Texas you can buy for $34,000. I think the meth lab even comes included!

    Paul SF November 27, 2006, 5:06 pm
  • The house I grew up in in the late 70s/early 80s cost 46k when my dad bought it, he sold it for 200k in the late 80s….
    That same house just sold for 4.3 million.
    Location, location.

    LocklandSF November 27, 2006, 5:37 pm
  • What is this, the Century 21 weblog?
    The part that I find a little spooky about Sori’s deal is not really the annual salary. It’s the 8, Eight, VIII years. Long time.
    We might not know if the Cubs overpayed until 4 or 5 years from now. If he’s starting to lose it as he gets into his mid-thirties, striking out a ton, which he’s already prone to, and the Cubs are still looking at paying him 17 mil. a year or whatever it is, for several more years, then this contract will look bad.

    whatever November 27, 2006, 8:54 pm

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