Salary Cap Analysis

[Schneed10]

Originally Posted by Pocono

http://www.askthecommish.com/salarycap/numbers.asp

I expect an extension also but many teams are in good cap shape and might like nothing better than to see the new CBA delayed past 3/1 and pick up some good players from the teams in most trouble. I think many would love nothing better than to see Al Davis and Danny Snyder put in a horrible position and made to twist in the wind.

Nice link. But the guys who have been the driving force behind letting the CBA expire have been Dan Snyder and Jerry Jones. There are a few other select owners in their corner, but Danny and Jerry are both over the cap according to your link. It's in their interests to see the CBA get extended, and they have previously represented the faction that wanted the end of the CBA. They will cave in the 11th hour, if not before.

[Gmanc711]

Originally Posted by Schneed10

Nice link. But the guys who have been the driving force behind letting the CBA expire have been Dan Snyder and Jerry Jones. There are a few other select owners in their corner, but Danny and Jerry are both over the cap according to your link. It's in their interests to see the CBA get extended, and they have previously represented the faction that wanted the end of the CBA. They will cave in the 11th hour, if not before.

Becuase, correct me if I'm wrong, if the CBA isnt extended, then 2007 (and possibly beyond) is an uncapped year? I know Snyder would LOVE that.

[FRPLG]

Originally Posted by Schneed10

Nice link. But the guys who have been the driving force behind letting the CBA expire have been Dan Snyder and Jerry Jones. There are a few other select owners in their corner, but Danny and Jerry are both over the cap according to your link. It's in their interests to see the CBA get extended, and they have previously represented the faction that wanted the end of the CBA. They will cave in the 11th hour, if not before.

Let's clear up what is actually going on with the CBA.
There are 2 issues causing the problems. First is the agreement amongst the owners as to the sharing of revenues. Then there is the CBA negotiations. Now the CBA will never get agreed upon until the owners have agreed on revenue sharing. The reason the CBA negotiations have dragged on is that the owners simply can't agree on how to share the revenues any more. I am not greatly versed in the revenue sharing specifics but I believe they currently share the TV money, ticket sales, league based apparrel contract money, and some other smaller revenue streams. What they don't share is concessions, local tv revenue, team specific apparell sales and such, and other locally produced monies. These local monies are huge for teams like the Skins and Ciowbys and not very huge for teams like KC or Arizona. Of course the Dan doesn't want to share his extra money because he feels he is better at marketing than most of these other teams so why should he give them the spoils of his work.
Once they work this out the CBA can be tackled in full. They'll be able to negotiate from a position of understanding what monies everyone has so they can better work the deal successfully.

So Snyder is not directly holding the CBA up but he is indirectly.

[#56fanatic]

Another salary cap discussion, man this is dangerous territory. Everyone keeps going down the restructure road, thats fine for a year or two, but you still have to pay the original signing bonuses too. I know the skins have done a great job of circumventing this cap for a while, I just dont see how they are going to be able to keep doing things this way. They are eventually going to either have to start cutting really good players or bite the cap figures.They are just putting it off by restructuring, plus they keep having roster turnover because they have to cut 10 to 15 people every year. I found this about restructing deals.



If a player decides to renegotiate his contract, how does the bonus money he received in the original contract count against the cap? Answer:If a player renegotiates his contract and gets a new signing bonus, the new signing bonus is prorated over the remaining years of the original contract AND over the extension. The allocation of the original signing bonus remains unchanged.

For example, Player X is currently in the third year of a four-year deal (2000–2003) that paid him a $1 million signing bonus. In 2002, Player X renegotiates his deal extending his contract to the 2005 season while getting a $2 million signing bonus. The original $1 million signing bonus is allocated at $250,000 per year over 2002 and 2003 just as it would be if there were no renegotiations. However, the new $2 million signing bonus is allocated at $500,000 per year over the remaining two years of the original contract (2002–2003) and the extended two years (2004–2005).

[Schneed10]

Originally Posted by #56fanatic

Another salary cap discussion, man this is dangerous territory. Everyone keeps going down the restructure road, thats fine for a year or two, but you still have to pay the original signing bonuses too. I know the skins have done a great job of circumventing this cap for a while, I just dont see how they are going to be able to keep doing things this way. They are eventually going to either have to start cutting really good players or bite the cap figures.They are just putting it off by restructuring, plus they keep having roster turnover because they have to cut 10 to 15 people every year. I found this about restructing deals.



If a player decides to renegotiate his contract, how does the bonus money he received in the original contract count against the cap? Answer:If a player renegotiates his contract and gets a new signing bonus, the new signing bonus is prorated over the remaining years of the original contract AND over the extension. The allocation of the original signing bonus remains unchanged.

For example, Player X is currently in the third year of a four-year deal (2000–2003) that paid him a $1 million signing bonus. In 2002, Player X renegotiates his deal extending his contract to the 2005 season while getting a $2 million signing bonus. The original $1 million signing bonus is allocated at $250,000 per year over 2002 and 2003 just as it would be if there were no renegotiations. However, the new $2 million signing bonus is allocated at $500,000 per year over the remaining two years of the original contract (2002–2003) and the extended two years (2004–2005).

You're right about how bonuses are allocating. It's just a matter of how much a team can afford to kick down the road. There's often a little more wiggle room than there appears to be, because the cap limit goes up every year. Last year the limit was $85 million. This year it will be $93 million. The next year it will be near $100 million. The key is not to kick too much of the bonus down the road.

For example, Portis originally signed for a bonus of $11.6 million over 8 years. This year, he's due a $3 million roster bonus. If you renegotiate that into a signing bonus, here's the bonus allocation:

2004: $1.45 million
2005: $1.45 million
2006: $1.45 million + $0.5 million = $1.95 million total
2007: $1.45 million + $0.5 million = $1.95 million total
2008: $1.45 million + $0.5 million = $1.95 million total
2009: $1.45 million + $0.5 million = $1.95 million total
2010: $1.45 million + $0.5 million = $1.95 million total
2011: $1.45 million + $0.5 million = $1.95 million total

That's adding half a million per year, very manageable. In 2007, he's due another roster bonus in the amount of $1 million. Renegotiating that would add another $0.2 million to each year from 2007 onwards. It's not an extraordinary amount.

You can keep a core group of players together in this manner. We can go through the next five years (assuming the CBA gets resigned) and not have to ditch any of our core 15-20 guys. The problem with running your cap in this manner is that if you try to add a high-priced free agent to the mix, you're talking about having the cap blow up in your face.

[CrazyCanuck]

Originally Posted by Schneed10

You're right about how bonuses are allocating. It's just a matter of how much a team can afford to kick down the road. There's often a little more wiggle room than there appears to be, because the cap limit goes up every year. Last year the limit was $85 million. This year it will be $93 million. The next year it will be near $100 million. The key is not to kick too much of the bonus down the road.

Agreed.

Originally Posted by Schneed10

For example, Portis originally signed for a bonus of $11.6 million over 8 years. This year, he's due a $3 million roster bonus. If you renegotiate that into a signing bonus, here's the bonus allocation:

2004: $1.45 million
2005: $1.45 million
2006: $1.45 million + $0.5 million = $1.95 million total
2007: $1.45 million + $0.5 million = $1.95 million total
2008: $1.45 million + $0.5 million = $1.95 million total
2009: $1.45 million + $0.5 million = $1.95 million total
2010: $1.45 million + $0.5 million = $1.95 million total
2011: $1.45 million + $0.5 million = $1.95 million total

That's adding half a million per year, very manageable. In 2007, he's due another roster bonus in the amount of $1 million. Renegotiating that would add another $0.2 million to each year from 2007 onwards. It's not an extraordinary amount.

With the current CBA you can only prorate 4 years out for 2006. It used to be a max of 7 years, but has been declining every year as the CBA approaches expiry.

So Portis' $3M bonus would be spread out over the next 4 years at a hit of $750K per year. If a new CBA is signed, I'd assume the max proration would go back to 7 years.

[70Chip]

A few thoughts on the Sportsline article about the cap.

First, it seems to me to be shoddy reportage to rely on other teams' cap people to comment, without giving the Redskins a chance to reply. As usual, these sources are anonymous. Que Cosell's rant about the de plor a bull state of sports jour na lism.

Second, if there is no new CBA, my understanding is that a number of teams will have to make radical cutbacks in 2006-not just the Skins. After 2006 it's Katey bar the door (as Ken Beatrice used to say) and we can spend as much as we like.

Third, if there is a new CBA and I realize the clock is ticking, the overall revenue pool will go up because of the demand from smaller teams to include more revenue streams. In addition, the players share of that overall pie will be higher because this is Upshaw's central demand and he cannot face his members without some victory on this front. Therefore isn't it likely that a renewed CBA means that the cap will spike way up and save the Redskins from the article's hellish scenario? Would this increase the 2006 cap or would the affect/effect be delayed?

I would like to hear from our resident experts, Schneed and Canuck. Their projections are a little more crowd pleasing. Am I right in my basic asessment? No CBA = bad news for us and all other teams over the cap in 2006 and, Renewed CBA = much higher caps bail us out. I know we've been over this but the article makes it seem that we are screwed regardless and I don't see it that way.

[Schneed10]

Originally Posted by CrazyCanuck

Agreed.

With the current CBA you can only prorate 4 years out for 2006. It used to be a max of 7 years, but has been declining every year as the CBA approaches expiry.

So Portis' $3M bonus would be spread out over the next 4 years at a hit of $750K per year. If a new CBA is signed, I'd assume the max proration would go back to 7 years.

True that. I forgot about that. I tend to live in the land of milk and honey, where the beer flows like beer, there are no hephalumps or woozles, and the CBA never has a chance of expiring. It may be a bit utopian and the danger of the CBA expiring is surely real and tangible at this point, but I really don't think either side wants to let it expire. I think they'll get it done at the last minute, even if it takes postponing the March 3 start of free agency.

[dmek25]

the guy has 10 tackles and an interception without playing on third down and he is worthless!on comcast this morning without reading into an interview i get the feeling he will be back,as long as the numbers are right.i want him back minus the soap opera every week.a dynamic force in this league when healthy

[Schneed10]

If Arrington will restructure to save cap room, I'm fine with keeping him. But I still wouldn't want him playing on 3rd downs until he gets up to speed a bit more on the defense.

[FRPLG]

Originally Posted by Schneed10

If Arrington will restructure to save cap room, I'm fine with keeping him. But I still wouldn't want him playing on 3rd downs until he gets up to speed a bit more on the defense.

Up to speed? The guy has had over 2 years to learn the D. If he doesn't know it by now I wouldn't expect him to know it ever. I think his lack of explosiveness due to the knee kept him off the field on third downs mostly. He seems to me to fit perfectly into what Williams likes to do. Bring pressure from everywhere. If he comes off on 3rd when you want to bring pressure then that says something about his ability to bring said pressure. I am hoping it is temporary and he'll be back better next year. He can still play I am sure of it. He didn't become a terrible football player all of a audden and I sat and watched Gregg Williams compliment him about how fun he is coach when he is at the top of his game. Williams will keep him if Lavar has sufficiently bought into everything.

[CrazyCanuck]

Originally Posted by Schneed10

Salary Cap $ Scheduled in 2006: $109.6 million
Expected NFL Salary Cap Limit: $93 million

Expected Cuts - Cap Savings:
Brandon Noble - $1.7 million
Walt Harris - $2 million
Matt Bowen - $2 million
Corey Raymer - $1 million
Antonio Brown - $450,000
Jimmy Farris - $450,000
Derrick Frost - $450,000
Total Cap Savings from Cuts: $8 million

Salary Cap $ Scheduled in 2006 after Cuts: $101.6 million

Expected Trades/Post June 1 Cuts - Cap Savings
Patrick Ramsey - $2.2 million
Lavar Arrington - $7 million
Total Cap Savings from Trades/Post June 1 Cuts: $9.2 million

Salary Cap $ Scheduled in 2006 after Cuts, Trades, Post June 1 Cuts: $92.4 million

Roster Bonuses Restructured - Cap Savings

(assuming 2006 roster bonuses are restructured to become signing bonuses pro-rated for the remaining length of the current contract)

Sean Taylor: $1.8 million
Clinton Portis: $2.5 million
Casey Rabach: $1.5 million
Shawn Springs: $2.5 million
Cornelius Griffin: $2.0 million
Marcus Washington: $1.9 million
Chris Samuels: $3.7 million
Total Cap Savings from Roster Bonus Restructures: $15.9 million

Salary Cap $ Scheduled in 2006 after Cuts, Trades, Post June 1 Cuts, and Roster Bonus Restructures: $76.5 million

Projected Cap: $93 million

Expected Cap Room for Signing Free Agents, Draft Picks, and any Contract Extensions beyond Roster Bonus Restructures: $16.5 million

Great post Schneed.

I updated my cap sheets (should be up soon) and my starting cap number is $114.5M (including $3.5M in deadcap).

In addition to the savings you mentioned, I would add another $6M for salary restructures on Brunell, Jansen, and Thomas. That brings the cap number down to about $75.5M leaving us about $20M to spend.

However like Pocono mentioned, this is all dependent on a new CBA. Without a new CBA we won't be able to restructure the roster bonuses because of the 30% rule, and we won't be able to push the $7M Arrington deadcap to next year. Removing these savings brings our cap number to $98.5M.

So it looks like we definitely need a new CBA in place, or we may be in trouble.

[RedskinPete]

Originally Posted by CrazyCanuck

Great post Schneed.

I updated my cap sheets (should be up soon) and my starting cap number is $114.5M (including $3.5M in deadcap).

In addition to the savings you mentioned, I would add another $6M for salary restructures on Brunell, Jansen, and Thomas. That brings the cap number down to about $75.5M leaving us about $20M to spend.

However like Pocono mentioned, this is all dependent on a new CBA. Without a new CBA we won't be able to restructure the roster bonuses because of the 30% rule, and we won't be able to push the $7M Arrington deadcap to next year. Removing these savings brings our cap number to $98.5M.

So it looks like we definitely need a new CBA in place, or we may be in trouble.

What if there is no cap. It is thrown out in the agreement? There has been talk out there about that!!!

[JET]

Here's what I don't get. If we violate the salary cap, what penalty would there be if there is no more salary cap? Loss of draft choices? We'll just pick up more free agents. Am I missing something?

[amorentz]

Originally Posted by JET

Here's what I don't get. If we violate the salary cap, what penalty would there be if there is no more salary cap? Loss of draft choices? We'll just pick up more free agents. Am I missing something?

It is impossible to disregard the salary cap because the NFL has to approve every contract. They keep track of the cap numbers and implications. So if a contract or acquisition would put a team over the cap they league would simply not allow it; the player would continue to be a free agent and could not play under the illegal contract, or in the case of a trade, returned to his original team.