What Exactly Is Miami Offering Finley?

[George O'Brien]

One of the odd things about the discussion of where Finley will go is that we don't know what the Heat have offered. If they offered a full $38 million five year deal, then Nash or Nash, the Suns haven't got a chance.

In theory, the Suns could ask Finley to wait a year and then pay him from next season's MLE, but that is not a likely scenerio. For one thing, my guess is that at least some of that is promised to Grant if he does well, though not for more than three years if that long. Second, I'm not sure I'd want Finley for that price even if the Suns had the cap space.

He's coming off knee surgury in a position that requires quickness to be effective. At the age of 32, I would not think he would be effective for more than two or three more years. He might be a nice bench guy, but hardly worthy of the back end of a five year MLE.

It will be interesting to see what the Heat are prepared to offer. Considering the apparent buyer's remorse on the Brent Barry deal, you would think the Heat would be reluctant to make the same mistake. But, if they only offer a one year deal, I'm not sure the extra money will be worth it to him.

 

[redsox]

Didn't Finley have ankle surgery? Or am I wrong?

 

[George O'Brien]

Didn't Finley have ankle surgery? Or am I wrong?

You may be right. In any case, it slowed him down a lot last season.

 

[Dan H]

In theory, the Suns could ask Finley to wait a year and then pay him from next season's MLE, but that is not a likely scenerio.

That's the sort of thing that cost the T-Wolves five first round picks . . .

 

[JCSunsfan]

Didn't Finley have ankle surgery? Or am I wrong?

Spurs, certainly a painful and debilitating condition short-term, but easily corrected with surgery.

 

[Drop D]

Spurs, certainly a painful and debilitating condition short-term, but easily corrected with surgery.

I hope the Spurs are only painful and debilitating for a short-term. With luck, Amare will prove to be an effective treatment.

 

[JCSunsfan]

That's the sort of thing that cost the T-Wolves five first round picks . . .

Actually, i don't think signing at FA to the minimum this year and promising him the mle next year is against the rules.

The CBA is different now since the days of Joe Smith.

 

[cly2tw]

First, for the next three years, the full MLE is worth about 3+ mil a year since about 2+ mil goes back to Cuban. So, it'd be more like a 5-year 26mil deal in real money. So, if Finley plays 3 years at min and then get a 3 year deal for 27mil, he'd get 30mil for 6years. Plus the 51 mil he gets from Cuban, he expects over 80mil for his remaining career where ever he goes.

Second, Suns franchise is well known for taking care of players who do them favors by accepting small deals to come here. We won't be as stupid as the Wolves to make any kind of former promises.

 

[Dan H]

Actually, i don't think signing at FA to the minimum this year and promising him the mle next year is against the rules.

The CBA is different now since the days of Joe Smith.

Any sort of promise would be considered under the table IIRC. It may be different with the MLE (Did the T-wolves sign him to a 3-year deal to get his Bird rights when his contract expired?)

 

[Mrh182]

i dont understand why he would decide based on money since dallas is already forced to give him a HUGE payday..if playing with a best friend for a team that drafted you isn't good enough...then I dont want him to play here.

 

[Joe Mama]

i dont understand why he would decide based on money since dallas is already forced to give him a HUGE payday..if playing with a best friend for a team that drafted you isn't good enough...then I dont want him to play here.

the payday isn't quite as large as originally thought because he's going to get deferred payments. He will get under $5 million per season from Dallas.

I know that I would not be excited about giving Michael Finley a five-year deal. I know the Phoenix Suns couldn't do it until next summer, but I would probably be less excited then.

You never know what Miami, or Detroit for that matter, is offering. Even if they are thinking rationally there's always Denver as well.

Joe Mama

 

[devilalum]

That's the sort of thing that cost the T-Wolves five first round picks . . .

You're right. You can't make specific unwritten agreements but you can say, "We promise to take care of you. We have a proven track record of taking care of our players that are willing to sign for less."

 

[Joe Mama]

You're right. You can't make specific unwritten agreements but you can say, "We promise to take care of you. We have a proven track record of taking care of our players that are willing to sign for less."

technically I'm not even sure you can do that, but practically it's done all the time.

Joe Mama

 

[George O'Brien]

the payday isn't quite as large as originally thought because he's going to get deferred payments. He will get under $5 million per season from Dallas.

I know that I would not be excited about giving Michael Finley a five-year deal. I know the Phoenix Suns couldn't do it until next summer, but I would probably be less excited then.

You never know what Miami, or Detroit for that matter, is offering. Even if they are thinking rationally there's always Denver as well.

Joe Mama

The fact that the money is deferred doesn't mean Finley isn't going to get it. Since the whole point of big contracts is to get money for the future when not being able to play, the deferral will reduce the net present value of his deal but not the hard dollar value.

In any case, it is probably just as well that the Suns don't have much to offer. They can't really justify a bidding war on a guy who is 32. If Finley comes, he comes because he likes the team, the style, and the likelihood he would start on a possible champion. But it the Heat go crazy, he might pass it up for another big payday - but I think it would have to be pretty big.

 

[Joe Mama]

The fact that the money is deferred doesn't mean Finley isn't going to get it. Since the whole point of big contracts is to get money for the future when not being able to play, the deferral will reduce the net present value of his deal but not the hard dollar value.

In any case, it is probably just as well that the Suns don't have much to offer. They can't really justify a bidding war on a guy who is 32. If Finley comes, he comes because he likes the team, the style, and the likelihood he would start on a possible champion. But it the Heat go crazy, he might pass it up for another big payday - but I think it would have to be pretty big.

Once you factor in splitting the new contract between himself and Dallas, taxes, agent fees, etc. the difference between the Phoenix Suns' and Miami Heat's offers this year will not be huge. Still, you're not going to convince me that deferred payments are the same as getting the money in a third the time. If he gets $5 million per season instead of $15 million that's $10 million (minus taxes, agent fees, etc.) that he can't spend or more importantly invest.

Again, there's a reason every Powerball winner takes the cash instead of the annuity payments despite the fact that overall they are paid about half as much.

Joe Mama

 

[elindholm]

Again, there's a reason every Powerball winner takes the cash instead of the annuity payments despite the fact that overall they are paid about half as much.

Hmm, I'm not sure that's a great comparison. Aren't lottery annuities spread out over something like 30 years? That gives inflation a lot of time to catch up. Finley's installments would take less than ten years, reducing the impact of inflation significantly.

Also, the amount of money is much different. If someone wins $10 million in the lottery and takes it in 30 installments, that's "only" about $300,000 per year, or half of that after taxes. That's still a lot, but it's not an amount of income that would completely change most people's lives. If someone wants to feel "rich," living in a mansion and so forth, they have to take the seven-figure sum up front. Finley, on the other hand, already has ungodly amounts of money, and an income of $5 million annually is still overwhelming.

Maybe I'd feel differently if I were the one with the NBA bankroll, but I don't think the deferral should make much difference.

 

[Joe Mama]

Again, there's a reason every Powerball winner takes the cash instead of the annuity payments despite the fact that overall they are paid about half as much.

Hmm, I'm not sure that's a great comparison. Aren't lottery annuities spread out over something like 30 years? That gives inflation a lot of time to catch up. Finley's installments would take less than ten years, reducing the impact of inflation significantly.

Also, the amount of money is much different. If someone wins $10 million in the lottery and takes it in 30 installments, that's "only" about $300,000 per year, or half of that after taxes. That's still a lot, but it's not an amount of income that would completely change most people's lives. If someone wants to feel "rich," living in a mansion and so forth, they have to take the seven-figure sum up front. Finley, on the other hand, already has ungodly amounts of money, and an income of $5 million annually is still overwhelming.

Maybe I'd feel differently if I were the one with the NBA bankroll, but I don't think the deferral should make much difference.

to believe it's actually 20 years although that might not be right. I also see the differences in the sum of money. I mentioned the Powerball because the sums are usually much larger. If someone wins $100 million in the Powerball and takes the cash payment I believe they end up with about $55-60 million before taxes. If they took the annuity payments over 20 years that would be $5 million per year.

Eric, you're good enough at math. Figure out what the difference is over 20 years if you were to invest that all of the money at 6% interest. Figure in one scenario he gets the $51 million over the next 3 years, and in the other it takes in 10 years to get it. For simplicity's sake you can figure being taxed at 50% on the salary.

I would do it myself, but frankly I've forgotten most everything passed the simplest algebra.

Joe Mama

 

[playstation]

Once you factor in splitting the new contract between himself and Dallas, taxes, agent fees, etc. the difference between the Phoenix Suns' and Miami Heat's offers this year will not be huge. Still, you're not going to convince me that deferred payments are the same as getting the money in a third the time. If he gets $5 million per season instead of $15 million that's $10 million (minus taxes, agent fees, etc.) that he can't spend or more importantly invest.

Again, there's a reason every Powerball winner takes the cash instead of the annuity payments despite the fact that overall they are paid about half as much.

Joe Mama

speaking of what's illegal under the CBA, i have no idea how this deferrment deal was cool with the CBA. i mean, finley is now a free agent, but has his options limited by a past employer.

 

[elindholm]

Figure out what the difference is over 20 years if you were to invest that all of the money at 6% interest. Figure in one scenario he gets the $51 million over the next 3 years, and in the other it takes in 10 years to get it.

I did this very quickly, using some simplifying approximations, while trying to keep my daughter away from the keyboard, so it might be off. But I get $154.5 million vs. $127.6 million pre-tax.

For simplicity's sake you can figure being taxed at 50% on the salary.

But the 6% yield is taxed as well. In fact, I'd guess that it's easier to find tax havens for $5 million per year than for $17 million per.

Also, it would be great if one could get a guaranteed 6% flat rate of return with no effort, but in reality it doesn't work that way. If the money is in the stock market, for instance, with the average yield fluctuating, you're facing less uncertainty if you spread your investments out over many years. (Financial advisors call this “dollar cost averaging.”)

I’ll admit that the difference is more than I thought, but it still isn’t huge. If you factor in the risk of Finley blowing all of his money in the first few years after retirement (say, in a tempting but bad investment), the disadvantage of the deferral becomes even less.

 

[sunsfn]

Speaking of money...........I think this is right in regards to the power ball.

100 mil winnings taken in a lump sum is figured this way.

100 mil divided in half = 50 mil, times 66% = 33 mil check to someone.

Is this right? I think it is.