07-12-2022, 10:37 AM
(07-12-2022, 10:17 AM)WeezyBengal Wrote: If he has sufficient cash on hand and it's not a problem for him, then he'd be dumb to get a loan and pay interest on it. The same could be said about ownership and player contracts.
I mean, it would make sense it it were a different business or a different investment.
You have 50M sitting around and want to put 25m into a new commercial development. Your 50 is probably making 7-10% annually - so just use that cash to get a large loan at 5%, and the borrower is 'making' or saving 3-5%.
But, what this McLuvin guy is saying, is that Owners/Teams 'dont have have a ton of cash' sitting around for player contracts.
Which is ludicrous; these teams have huge operating budgets and inflow of cash (That is why there is a Salary Cap).
No one is going to personally borrow 100M/200M/300M dollars to pay year-to-year players, whose contracts are not fully guaranteed, who may get traded, cut, injured, sit out, etc. They will structure the contacts and the commitments to work within their cashflow and budgets.
What he said was 100% wrong. He should just admit it was dumb
