Breaking down the draft’s major league contracts and two-sport deals from the first 10 rounds into their net present value (NPV):
Stephen Strasburg, Nationals (No. 1 overall)
Big league contract: $7.5 million bonus; $15,107,104 total guarantees; $14,196,346 NPV
Draft records for largest bonus, largest guarantee
Dustin Ackley, Mariners (No. 2 overall)
Big league contract: $6 million bonus; $7.5 million total guarantees; $6,793,359 NPV
Donavan Tate, Padres (No. 3 overall)
Two-sport deal: $6.25 million bonus; $5,920,919 NPV
Draft record for largest high school bonus
Jacob Turner, Tigers (No. 9 overall)
Big league contract: $4.7 million bonus; $5.5 million total guarantees; $4,818,245 NPV
Draft record for largest high school pitcher bonus
Aaron Crow, Royals (No. 12 overall)
Big league contract: $1.5 million bonus, $3 million total guarantees; NPV unavailable
Shelby Miller, Cardinals (No. 19 overall)
Two-sport deal: $2.875 million bonus; $2,744,431 NPV
Billy Hamilton, Reds (second round)
Two-sport deal: $623,600 bonus; $574,326 NPV
Kyrell Hudson, Phillies (third round)
Two-sport deal: $475,000 bonus; $447,377 NPV
David Renfroe, Red Sox (third round)
Two-sport deal: $1.4 million bonus; $1,238,663 NPV
Todd Glaesmann, Rays (third round)
Two-sport deal: $930,000 bonus; $849,716 NPV
D’Vontrey Richardson, Brewers (fifth round)
Two-sport deal: $400,000 bonus; $375,204 NPV
Daniel Fields, Tigers (sixth round)
Two-sport deal: $1,625,000 bonus; $1,467,339 NPV
Brandon Jacobs, Red Sox (10th round)
Two-sport deal: $750,000 bonus; $683,924 NPV
Jake Locker, Angels (10th round)
Two-sport deal: $200,000 bonus; $191,073 NPV
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What discount rate is used for the NPV calculation?
Posted by Mike | August 18, 2009 at 2:22 am | Shortcutwhat are you using as a discount rate? what is the cost of capital for a major league baseball team?
Posted by Brad | August 18, 2009 at 12:16 pm | Shortcut