japhi
Registered User
- Jul 7, 2014
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By The Numbers: Exploring Carolina’s Future Cap Situation
And this right here is why this deal works well for the Canes. Right during a time when we are going to need to figure out what to do with players like Hamilton, Mrazek, Martinook, Svechnikov and Necas the actual money we will be paying out to Aho will drop off. So even if you are under the impression that the Canes are cash strapped, when it comes to Aho its more about the cap hit than the actual cash being paid because its basically frontloaded 50% in the first 2 years.
In the end, what was supposed to be the biggest reason we wouldn't be able to do this is likely going to be one of the bigger reasons why we should.
Sorry but that article is embarrassing. Having to lay out half of the total owed in the first 12 months is not a cash flow win. It is exactly the opposite.
Have a 15 year mortgage? Just pay it off over the next 7, think how great your cash flow will be! Managing cash flow involves keeping as much cash on hand as reasonable possible. If cash flow is a problem you reduce payments not increase them.
This IS great for Aho’s cashflow, he can invest the 21mm and live on a combo of salary plus interest. 2mm per year and he doesn’t even need to touch the 21mm ( i get that this number will be smaller after tax) Use leverage to buy property. At the end of the 5 years he still has his 21mm invested.
Bottom line there is no benefit to the team to a front loaded deal. The money still has to come from somewhere and the longer the team holds it the more value they get from it.