Wouldn't it be a good idea for the Cubs, since they have some money to spend, to front load Giles contract? It seems to me that as he ages his value will go down and keeping his salary in tune with that would help the Cubs move him if they had to. OK, I've held out as long as I can on this. The finance whizzes at the Trib (and if this is over their head my services are available for slightly less than the major league minimum) are entirely capable of separating the timing of the cash payments from the value provided under the contract. Ignoring the time value of money (it complicates the numbers but doesn't alter the conclusions), if you negotiate a contract with a player for $6M, $8M, and $10M, but you think his production is likely to look more like $10M, $8M, and $6M, you just allocate $10M against your budget in year 1, with $6M going out in cash and $4M held in reserve for year 3. I don't think there is anything that would prevent the Cubs, or any team, announcing at the signing of a contract how they were going to allocate the expense over the course of the contract. This would also make it easier to understand trading a player near the end of a back loaded contract and picking up some of the cost. In the previous example, if you trade the player after year 2 but have to pick up $4M in year 3 salary to make the deal work, you don't feel cheated. In terms of whether a front-loaded deal could be negotiated, the answer is of course. Both parties to the negotiation will be looking at the present value of the deal (my services are available to agents as well as team owners). If all the money is guaranteed, the only thing that might affect the timing of the payments are different discount rates for the time value of money between the teams and the player. The only caveat I would add is that a team using this approach would need to establish the allocation at the time of signing the contract. I would be surprised (shocked) if the Cubs and other teams don't use this type of analysis, they just don't generally bring it up because they think the unwashed fans wouldn't understand. To summarize, all guaranteed contracts should be analyzed over the length of the contract and allocated according to expected production over that period. Now, to analyze contracts with options, we need to break out the old Black-Scholes option pricing models... [i was looking for a smiley for cha-ching]