BigRedMO said:
To actually physically pay out money that you dont have in earnings or capital requires that somebody loan it to you. The Cards can promise larger salaries in out years of contracts but that present value of the money is less than if that increased amount were paid now. You are saying players are willing to take less money now for the promise of more money in the future. That still has less value to players than that same increased amount of money paid in this years earnings. The Cards would still be operating at a disadvantage to teams that could pay the money now instead of making them wait.
If that increased revene does not occur or is significnatly smaller than thought Bidwill would be in deep do do. His players will walk.
We were not talking about physically paying out money. We were talking about spending or if you prefer committing anticipated revenues. All the top players sign multi year contracts with salaries agreed for each year of the contract. Now the Cardinals with increased revenues can match or go over what other teams are offering in the latter years of the contracts. They can commit to those payouts down the road because they anticipate increased revenues. No one has to loan them money for them to do that. They just have to be certain enough of the revenues to make the commitment.
Just like any business that has lease agreements, employees etc.
Businesses fail all the time because they did not generate anticipated revenues necessary to meet expenditures. In the NFL though if the money is not there the team cuts the players or lets them leave via free agency and signs cheaper ones. That is why you want to be very certain in your projections of future revenues.
Your bit about the present value of money is irrelevant because the use of long term contracts is common throughout the league. Of course a team has to consider if other teams are offering shorter terms for the same money but that is just part of the planning that goes into negotiations for the players services.
Must be tough for the Bidwill family knowing they have the lowest valued NFL franchise at ONLY around $500 million or so.
Wonder what the capitol gain be on that $35,000 investment? Stupid Bidwills.