gbs<\/p>\n
There are a lot of different ways to calculate the value of the contract <\/p>\n
IMO, the three most important ways are: <\/p>\n
1) the straight way: 4 years, $240 million. Not the best way, but that\u2019s what you\u2019ll see reported. <\/p>\n
2) The CBT value: this is important in baseball terms. It can seem a bit convoluted because it was bargained for. So there are compromises in it. Teams don\u2019t want payments to be discounted players do. It makes the contract look bigger if future payments aren\u2019t discounted. <\/p>\n
The CBT value is the AAV which is calculated by: the total amount paid during the life of the contract (including the signing bonus) divided by the contract length. In this case it\u2019s ($240 million \u2013 $30 million in deferrals) $210 million\/4 years = $52.5 million. Then the deferrals are added back in. Any money that is deferred 10 or more years gets discounted. That\u2019s why most deferrals are paid 10 years later. Assuming this is true for Tucker those are 4 payments of ($30\/4) $7.5 million made starting 10 years from now. <\/p>\n
You can use a calculator like this to estimate their value. <\/p>\n