Answer these questions:
You are Russel Wilson’s agent, and Wilson’s contract is about to expire. Two teams have made offers. Both contracts are 5-year contracts that pay out a total of $80 million over the life of the contracts. One contract will pay the $80 million in equal installments over the five years. The other contract will pay the $80 million in installments, but the installments increase 5% per year. Which deal received the better deal?
You have built a successful athletic brand over the years, and two companies have made you an offer to buy your company. The first company is offering $650,000 for your company, a one-time payment. The second company is offering you $810,000 and will pay you one year from now. You found a municipal bond for a new stadium with a rate of return of 6% for one year. Which deal do you accept?
July 1st is known as Bobby Bonilla Day in sports. Explain how Bobby Bonilla ended up being paid a lot more money from the New York Mets than what other players receive.
Why do professional sports teams need to calculate future value when signing players?
Do you think professional athletes should be considered assets?
Sample Solution