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Originally Posted by itvnetop
So if I understand this correctly, an owner has the option to slash salary cap by converting cap money into guaranteed up front? If this is the case, what's the point of a salary cap? Not that I'm complaining (since this helps us) but theoretically, the cap can be loopholed as deep as an owner's pockets go... correct? I wonder why more owners don't do this... I guess Danny boy is just too rich to even care about parting with guaranteed money.
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Sort of.....NFL contracts are not guaranteed. The only guarantee is the signing bonus and the current year's salary. What a restructure does is "guarantee" (by paying the player up front) money that would have been due in later years of his contract. However if the player is released or traded this "guaranteed" money must be accounted for against the next year's salary cap. This is the "dead cap" cost or release fee.
What it boils down to is; if you have confidence the team will not be releasing the player and he is a solid performer a restructure is a good strategy. Where it kills you is if you pay a large signing bonus or restructure a player and he gets injured or his production declines (Brandon Lloyd, Arch last year) and you want to get rid of the player the cost against that year's salary cap hurts you. For example to release Brandon Lloyd it will cost about $ 7M against the 2008 cap. He'll be gone but the guaranteed money he was paid has to be accounted for in the salary cap.
I may be off on a couple of details but that is pretty much how it works. Schneed & Crazy Canuck do some great work on salary cap info. If you search the site there is a link to our current salary cap sheets.