The case follows sport agent Whitney Regine as she reviews contract offers for her client, baseball player Adam Scialomie. Regine receives four offers, and though they are all for five years of playing time, the payments are structured in wildly different ways. Regine must use her knowledge of Time Value of Money and the TVM Decision Tree to determine which contract will provide her client with the largest contact in terms of PV. She will find that the contracts with the largest nominal values--i.e., the figures that get reported in the media--are not necessarily worth the most in terms of present value. She will also see the impact that different discount rates can have in making her decisions
Notes
Originally Published InTyler, B. D. (2017). Using the time value of money decision tree to calculate an athlete's contract offers. Case Studies in Sport Management, 6(1), 48-57