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Originally Posted by Schneed10
One of these days I'm going to create a cookie cutter post to put up whenever somebody misunderstands the salary cap as is done in this post.
First off, Snyder is a great business man. He has people who can project the salary cap limits in future years based on the league's growing finances. Actually, as smart as Snyder is with numbers, he can probably do it himself in his head.
The signing bonuses are only part of the equation. The team schedules roster bonuses to occur in lumpsum halfway through the contracts. These bonuses make it very easy for the team to keep the player by restructuring them to signing bonuses. Because of the growth taking place in NFL salaries, once players are 3 years removed from their original signing bonus, the allocated portion of said bonus takes up a lot lower % of the growing salary cap limit. That growing limit is why we never run into "cap hell."
While our cap figure for 2006 looks crappy now, it's very easy for the Skins to fit under the 2006 limit just by cutting a few chumps like Matt Bowen, and then restructuring a bunch of roster bonuses. Our cap figure will come down by about $20 million from where it is now, and we won't have to get rid of any core players. And in future years, the cap will either cease to exist or continue to grow. And Snyder's financial projections will be right on the money.
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I found an artice that basically says exactly what I have been saying about all this restructuring and reworking of the bonuses that you and other people seem to think they dont hurt our cap figures down the road.
In our example, let's say the Falcons need to save some extra space so they need to restructure some contracts. Say it is the offseason prior to Year 3 of Ed's contract, so it would not be a good idea to cut him (would add an extra $1 million to the Falcons cap). So they decide to restructure Ed's contract. A common form of restructuring is lowering the player's base salary. In this case, the Falcons can lower Ed's base salary of $1.5 million to $500,000. Now the Falcons have cleared $1 million off Ed's contract. But now what happens to that $1 million? Usually teams treat it as a signing bonus. In that way, it becomes prorated over the remaining years of his contract just like a normal signing bonus. That means that there will be a $333,333 cap hit ($1 million / 3 years) in Years 3, 4, and 5. Although this frees up $666,667 in cap space in Year 3, it adds an additional $333,333 to the Falcons cap in Years 4 and 5.
So although restructuring is a quick way to gain cap space without losing a player, but it also can hurt a team down the road. When you begin to restructure contracts with large bonuses, it can be very detrimental to the salary cap in future years.
Now, I dont see how people can keep arguing with me in regards to all this restructing crap. It says it right here, load and clear.