Max Scherzer and When $210 Million Isn’t $210 Million
Scott Boras has done it again. After months of what appeared to be mild interest from the clubs one would assume would be in the bidding for the best free agent on the market, Boras found an unexpected bidder with $200 million burning a hole in their pockets. Or, more precisely, $210 million in this case, as the Nationals joined the club of teams paying $30 million per year for premium talent.
Or, at least, they did on paper. Scherzer signed a seven year contract, and in exchange for pitching for them for those seven years, the Nationals have agreed to pay him $210 million in salary. Divide $210 million by seven years and you get $30 million in AAV, which is how this deal will be reported. But because of how this deal was structured, it’s not really $30 million per year.
Instead, the Nationals will pay Scherzer $15 million per season, but do so for 14 years; essentially, they’ve deferred half of each season’s salary seven years into the future. Effectively, they signed Scherzer for $105 million over the seven years that he’ll pitch for them, and then they’ll pay him the next $105 million after the contract ends, making this the most deferred money contract in baseball history.
Teams have been deferring money in contracts forever — the most famous case is Bobby Bonilla’s deal with the Mets that has them paying him through the 2035 season — but never before have we seen this size of a deferral, and so this deal serves as a nice reminder that the payment terms of a deal can have an impact on the actual value of contract. And in this case, the significant deferral has a pretty big impact.