Kessel to get 8yr/$64M deal

[Scotto74]

option 1
------------------Years 1 - 10 earning compouding interest at 4%
Year 1---- 10,000,000 - 10,400,000 - 10,816,000 - 11,248,640 - 11,698,586 - 12,166,529 - 12,653,190 - 13,159,318 - 13,685,691 = 14,233,118
Year 2---- - 9,000,000 - 9,360,000 - 9,734,400 - 10,123,776 - 10,528,727 - 10,949,876 - 11,387,871 - 11,843,386 = 12,317,121
Year 3---- - - 8,000,000 - 8,320,000 - 8,652,800 - 8,998,912 - 9,358,868 - 9,733,223 - 10,122,552 = 10,527,454
Year 4---- - - - 7,000,000 - 7,280,000 - 7,571,200 - 7,874,048 - 8,189,010 - 8,516,570 = 8,857,233
Year 5---- - - - - 6,000,000 - 6,240,000 - 6,489,600 - 6,749,184 - 7,019,151 = 7,299,917
Year 6---- - - - - - 5,000,000 - 5,200,000 - 5,408,000 - 5,624,320 = 5,849,293
Year 7---- - - - - - - 4,000,000 - 4,160,000 - 4,326,400 = 4,499,456
Year 8---- - - - - - - - 3,000,000 - 3,120,000 = 3,244,800
Year 9---- - - - - - - - - 2,000,000 = 2,080,000
Year 10--- - - - - - - - - = 1,000,000
Total after 10 years ---------------------------------> 69,908,393


option 2
Year 1 1,000,000 - 1,040,000 - 1,081,600 - 1,124,864 - 1,169,859 - 1,216,653 - 1,265,319 - 1,315,932 - 1,368,569 = 1,423,312
Year 2 - 2,000,000 - 2,080,000 - 2,163,200 - 2,249,728 - 2,339,717 - 2,433,306 - 2,530,638 - 2,631,864 = 2,737,138
Year 3 - - 3,000,000 - 3,120,000 - 3,244,800 - 3,374,592 - 3,509,576 - 3,649,959 - 3,795,957 = 3,947,795
Year 4 - - - 4,000,000 - 4,160,000 - 4,326,400 - 4,499,456 - 4,679,434 - 4,866,612 = 5,061,276
Year 5 - - - - 5,000,000 - 5,200,000 - 5,408,000 - 5,624,320 - 5,849,293 = 6,083,265
Year 6 - - - - - 6,000,000 - 6,240,000 - 6,489,600 - 6,749,184 = 7,019,151
Year 7 - - - - - - 7,000,000 - 7,280,000 - 7,571,200 = 7,874,048
Year 8 - - - - - - - 8,000,000 - 8,320,000 = 8,652,800
Year 9 - - - - - - - - 9,000,000 = 9,360,000
Year 10 - - - - - - - - = 10,000,000
Total after 10 years ---------------------------------> 62,158,785




at the end of 10 years option one will have a bank account of this much more then option 2 ---------------------> 7,749,608 all earned from the same 55 million dollar contract the only difference is front loading the deal and taking the money in the begining of the contract not the end of the contract.

 

[DoubleAAAA]

Kessel starts at 10, works his way down to 6.

One thing I'll never understand...why do players allow agents to do that to them? Inflation goes up, and their pay goes down? Meanwhile, the agent laughs all the way to the bank because he got his bonus % of the 10 up front?

Why does this never ever click in the players head? "Gee, price of gas tripled, maybe I should look to increase my money as time goes on, not decrease it"

Time value of money, a $ today is worth more than a $ in the future. If you can't be smart enough with your money to outpace inflation with your return when you're making 8 figures, get a new advisor.

 

[DoubleAAAA]

As I said earlier, if you take everything off the top of the 6, and put it in 5% tax free bonds...then by year 8, you've got 16 million that is putting 800k in your pocket.

Meaning you're still down 3.2 mil on cash, plus whatever inflation is doing to your buying power at that time.

If you're going to the market instead of tax free bonds, you're still stuck with the task of trying to make 16 million of the extra cash turn into 40ish million to generate the gap in income. If you've got a trick to do that, myself and my clients would love to know

This only holds water if he's spending all of his money, every year, which I would hope he isn't.

 

[VanIsle]

78 percent of NFL players face bankruptcy or serious financial stress within just two years of leaving the game (due to joblessness or divorce), and 60 percent of NBA players face the same dire results in five years.

http://articles.chicagotribune.com/...806_1_athletes-nfl-player-financial-stability


Brutal statistics, I wonder how NHL players stack up to the other 2 sports?

 

[member 96824]

We're talking about yearly income here...not a lump sum at the end. I never said it will lead to more total dollars, cause it won't.

I get what you guys are saying, and youre right...when he invests it, it comes out more money on a lump sum total basis...but im thinking strategically.

Using my muni bond example again because thats real life application for HNW

The application of strategy here is increasing buying power even after inflation year by year...even in year 8, where in my situation he's bringing in about 11 in income when things cost more compared to cutting his income to 7.

And yes, I do invest money for clients based on strategies of whats best for the client, like generating more income when costs rise. No need for insults.

Unfortunately I havent had the situation of investing lump sums of 10 mil yet

 

[member 96824]

78 percent of NFL players face bankruptcy or serious financial stress within just two years of leaving the game (due to joblessness or divorce), and 60 percent of NBA players face the same dire results in five years.

http://articles.chicagotribune.com/...806_1_athletes-nfl-player-financial-stability


Brutal statistics, I wonder how NHL players stack up to the other 2 sports?

More than likely lower because NHL players tend to be more down to earth, but they are still fairly uneducated...which is where alot of the issue really stems from.

 

[member 96824]

This only holds water if he's spending all of his money, every year, which I would hope he isn't.

I would hope not either, but % saved isn't an option in the contract structure.

 

[member 96824]

option 1
------------------Years 1 - 10 earning compouding interest at 4%
Year 1---- 10,000,000 - 10,400,000 - 10,816,000 - 11,248,640 - 11,698,586 - 12,166,529 - 12,653,190 - 13,159,318 - 13,685,691 = 14,233,118
Year 2---- - 9,000,000 - 9,360,000 - 9,734,400 - 10,123,776 - 10,528,727 - 10,949,876 - 11,387,871 - 11,843,386 = 12,317,121
Year 3---- - - 8,000,000 - 8,320,000 - 8,652,800 - 8,998,912 - 9,358,868 - 9,733,223 - 10,122,552 = 10,527,454
Year 4---- - - - 7,000,000 - 7,280,000 - 7,571,200 - 7,874,048 - 8,189,010 - 8,516,570 = 8,857,233
Year 5---- - - - - 6,000,000 - 6,240,000 - 6,489,600 - 6,749,184 - 7,019,151 = 7,299,917
Year 6---- - - - - - 5,000,000 - 5,200,000 - 5,408,000 - 5,624,320 = 5,849,293
Year 7---- - - - - - - 4,000,000 - 4,160,000 - 4,326,400 = 4,499,456
Year 8---- - - - - - - - 3,000,000 - 3,120,000 = 3,244,800
Year 9---- - - - - - - - - 2,000,000 = 2,080,000
Year 10--- - - - - - - - - = 1,000,000
Total after 10 years ---------------------------------> 69,908,393


option 2
Year 1 1,000,000 - 1,040,000 - 1,081,600 - 1,124,864 - 1,169,859 - 1,216,653 - 1,265,319 - 1,315,932 - 1,368,569 = 1,423,312
Year 2 - 2,000,000 - 2,080,000 - 2,163,200 - 2,249,728 - 2,339,717 - 2,433,306 - 2,530,638 - 2,631,864 = 2,737,138
Year 3 - - 3,000,000 - 3,120,000 - 3,244,800 - 3,374,592 - 3,509,576 - 3,649,959 - 3,795,957 = 3,947,795
Year 4 - - - 4,000,000 - 4,160,000 - 4,326,400 - 4,499,456 - 4,679,434 - 4,866,612 = 5,061,276
Year 5 - - - - 5,000,000 - 5,200,000 - 5,408,000 - 5,624,320 - 5,849,293 = 6,083,265
Year 6 - - - - - 6,000,000 - 6,240,000 - 6,489,600 - 6,749,184 = 7,019,151
Year 7 - - - - - - 7,000,000 - 7,280,000 - 7,571,200 = 7,874,048
Year 8 - - - - - - - 8,000,000 - 8,320,000 = 8,652,800
Year 9 - - - - - - - - 9,000,000 = 9,360,000
Year 10 - - - - - - - - = 10,000,000
Total after 10 years ---------------------------------> 62,158,785




at the end of 10 years option one will have a bank account of this much more then option 2 ---------------------> 7,749,608 all earned from the same 55 million dollar contract the only difference is front loading the deal and taking the money in the begining of the contract not the end of the contract.

Still aware of how it works, but real world...this guy has gone from living a 10 million dollar lifestyle to making 1 million while costs have risen for 10 years...and correct me if I am wrong, but youve got him never taking home or spending a dime here.

 

[Oates2Neely]

This train has gone off the tracks...

 

[member 96824]

And fwiw, if Phil Kessel saw my username, told me that he likes Pearl Jam as well and wanted to do business...my plan would be a bit more complex than "reverse your contract" haha...but thats a different convo for a different day

 

[member 96824]

This train has gone off the tracks...

Ehh yeah but made for good talk

 

[DoubleAAAA]

Still aware of how it works, but real world...this guy has gone from living a 10 million dollar lifestyle to making 1 million while costs have risen for 10 years...and correct me if I am wrong, but youve got him never taking home or spending a dime here.

That's definitely a valid point. I think we're making the assumption that Phil's choice of lifestyle would be sustainable at his lowest earning point, while you're not. Again, I'd hope he's not spending $6M a year (albeit pre-tax), but I suppose you never know

 

[member 96824]

That's definitely a valid point. I think we're making the assumption that Phil's choice of lifestyle would be sustainable at his lowest earning point, while you're not. Again, I'd hope he's not spending $6M a year (albeit pre-tax), but I suppose you never know

I know how people are. Even the millionaires live beyond their means

Phil definitely doesn't seem like that type, but I think we have accurately summed up the difference between advisors and analysts and why companies need both

 

[finchster]

More than likely lower because NHL players tend to be more down to earth, but they are still fairly uneducated...which is where alot of the issue really stems from.

NHL players tend to be from well off families, how else can they afford to put their kids through years of an expensive sport? People from well off backgrounds tend to spend money differently than a kid from the ghetto who never had anything in his life. Not to say no NHL players go bankrupt, but it's far less of an issue than NFL or NBA players. Another reason is NHL players tend to have longer careers than NFL or NBA players, even if it's just one year that extra cash makes a difference.

 

[Scotto74]

Still aware of how it works, but real world...this guy has gone from living a 10 million dollar lifestyle to making 1 million while costs have risen for 10 years...and correct me if I am wrong, but youve got him never taking home or spending a dime here.

I don't have him spending a dime you are correct because this is just an example. I understand what you are saying about him lowering his income (take home pay) over time but the fact is it is still more profitable to get his contract dollars in the front loaded deal as he will end up with more money.

If he is the type that is going to blow 64 million dollars he will do it regardless of if he gets the 10 million at the front of the deal or the end of the deal. Fact still remains if you get offered that deal you accept the front loaded deal every single time.

 

[GloryDaze4877]

Ehh yeah but made for good talk

If you say so...

I honestly prefer just bashing Thrill and looking at CamFan's incredible gif's over and over

Seguin stealing the bride off the cake kills me too


ps although if I am ever suffering from insomnia, I know where to go

 

[BRUINS since 1995]

You don't pay a winger 8 M to play defensive hockey anyway.

----------
NO!

I Thought Gm and teams pay players for two things.
1) win games
2) win championships

Il you are on the ice for more goals against than you are on the ice for your team goals, than you will likely lose more game than you're gonna win!

Leafs will pay PK that 8 M. because they believe he can help them win.... that's there bet, like it or not. He certainly would not be my man.

 

[BRUINS since 1995]

Bruins 2011.

---
disagree.

Both Bergeron and DK proves the opposite.

 

[Ron Quixote]

I'm here for today's Finance class...

I brought my pencil. Give me something to write on, man!

Oh man, I think the clock is slow. I don't feel tardy...

 

[Bruinswillwin77]

Why are we still talking about this Bruin-fallen angel.

 

[BobbyAwe]

He many Tim Horton's franchises do you think that kind of money could buy?