Blue Jays Discussion: Almost through the off-season - Bautista keeping his bat-flipping talents in Toronto

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deletethis

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Mar 17, 2015
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I'll try:

Based on him turning down $17M for 1 year and finding soft interest in an oft-injured, surly slugger...

1st year: $15M
2nd year: $3M option buyout + $17M
 

Canada4Gold

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Dec 22, 2010
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Deal not done yet? I figured it'd be done once I got back to a computer today since it sounded so close last night. Hopefully it gets done tonight.

Question. Would the buy out be applied to this years budget or next years?

Next years. I think. Wouldn't make much of any sense accounting wise for it to be on this years budget since you wouldn't know until long after the year is over.
 

theaub

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Not that budgeting is GAAP compliant by any stretch, but historically the accounting policy is to split the buyout number over the life of the contract. So in this case it would be 50% 2017, 50% 2018.
 

Discoverer

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Apr 11, 2012
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Question. Would the buy out be applied to this years budget or next years?

When Anthopoulos was in charge, he used to talk about having to budget for the buyouts for the current year rather than the option year.
 

shakes

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When Anthopoulos was in charge, he used to talk about having to budget for the buyouts for the current year rather than the option year.

It's probably because of when they actually have to pay the bonus. It's a team budget so they care when the real dollars come out most likely.
 

Canada4Gold

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Dec 22, 2010
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It just feels a little weird if you account for buyouts on the current year.

Just say we had a 165 budget this year, and we sign Jose to a 1 year contract for 15 million with a 2nd team option year for 20 million with a 5 million buyout. Now lets say this along with another move here to there brings us to 160 this year. If we factor in the buyout this year then we're at our limit now despite only really at 160. Then if we accept the player option for next year it turns out we went 5 million under our budget this past year that we could have used had we knew in advance?

I guess you would say that you went at 165 this year and then consider you're only paying him 15 from the budget next year but that's a little odd as well. I guess I just assumed you only count money paid out until you know you're going to pay it out, and if you have a buyout you may or may not pay and instead it just goes to salary next year when you accept the option you wouldn't count that out of the current budget.
 

theaub

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You're missing the inverse though. If you go up to $165M and then the buyout happens, now you're at $170M and everyone is mad at you.
 

Canada4Gold

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You're missing the inverse though. If you go up to $165M and then the buyout happens, now you're at $170M and everyone is mad at you.

If you go up to 165, and the buyout happens that's next years money, it's a decision you had to make with regards to next year. 20 million for Jose to play for us or 5 million for Jose not to play for us. Now assuming you had a budget of 165 next year then you can only go to 160 on actual players. That's how I'd factor it in. Yeah it's probably not ideal for ownership to have to fork over 5 million of the 2018 budget in November 2017 or whatever. I'm not accountant but that way more more sense to me.
 

theaub

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If you go up to 165, and the buyout happens that's next years money, it's a decision you had to make with regards to next year. 20 million for Jose to play for us or 5 million for Jose not to play for us. Now assuming you had a budget of 165 next year then you can only go to 160 on actual players. That's how I'd factor it in. Yeah it's probably not ideal for ownership to have to fork over 5 million of the 2018 budget in November 2017 or whatever. I'm not accountant but that way more more sense to me.

If the money is paid in 2017, it goes into the 2017 budget.
 

Canada4Gold

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If the money is paid in 2017, it goes into the 2017 budget.

Why though? At that point the season is over, and the decisions for 2018 for everyone are already underway. At that point it's the next season. Don't see why Dec 31/Jan 1 needs to be the cutoff.

If the MLB playoffs ended on December 31st, would the buyout suddenly go on next years budget because the decision is final shortly after Jan 1st? That doesn't really make logical sense.

In reality the mlb calendar rolls Dec 1st, 2017 through Nov 30th, 2018 I think, isn't that when the CBA expired? That would be the by the book deadline. If we were going to talk this is still a this season payment v. next season payment, but it's pretty much all up to the team how they deal with the budget.

The team can decide which season to put the buyouts a part of. Nobody is certain of exactly what management does. Discoverer said AA did it that way, but nobody knows for sure if they still do. I'm just explaining logically why it makes sense to me the other way. It's a 2018 decision so even if it's made in the year 2017, or even before Dec 1st, it's made after that season is over and the eye is towards next season. I'm just explaining my logic until someone can say for sure this is for sure what they do.
 
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