was searching around on howstuffworks.com to find out more on the sallary cap and found this out.
Say, for example, a player wants a seven-year, $60-million contract. Let's say that the owner decides to give that player an $11-million signing bonus, which is all paid out in the first year but gets factored into the cap as prorated over the course of the seven-year contract ($11-million / 7 years = $1.57-million per year). Most NFL contracts are "back-ended" -- most of the base salary is located in the last two or three years of the contract. If we suppose that our player's contract is structured so that he has a base salary of $2-million the first year, with higher base salaries in the final two years of the contract, the $13-million (base salary + signing bonus) paid out in the first year appears as $3.57-million to the cap! The advantage of signing bonuses for the owner is that he now has more money to spend under the cap. This is how the Washington Redskins ran up a total payroll of $92.41-million in the 2000 season when the cap was $67-million. The advantage for the player is that all signing-bonus money is guaranteed to be paid, whereas an NFL contract is not guaranteed.
fan4life28 wrote:was searching around on howstuffworks.com to find out more on the sallary cap and found this out.
Say, for example, a player wants a seven-year, $60-million contract. Let's say that the owner decides to give that player an $11-million signing bonus, which is all paid out in the first year but gets factored into the cap as prorated over the course of the seven-year contract ($11-million / 7 years = $1.57-million per year). Most NFL contracts are "back-ended" -- most of the base salary is located in the last two or three years of the contract. If we suppose that our player's contract is structured so that he has a base salary of $2-million the first year, with higher base salaries in the final two years of the contract, the $13-million (base salary + signing bonus) paid out in the first year appears as $3.57-million to the cap! The advantage of signing bonuses for the owner is that he now has more money to spend under the cap. This is how the Washington Redskins ran up a total payroll of $92.41-million in the 2000 season when the cap was $67-million. The advantage for the player is that all signing-bonus money is guaranteed to be paid, whereas an NFL contract is not guaranteed.
You can only prorate a Signing Bonus over six years not the full length of the contract if it is more than 6 years. And contracts are back-loaded not back-ended.
"the Danny" added a twist to these contracts recently,by splitting the signing bonus up and paying the second part in a future year as a option bonus. This way instead of a ten million dollar bonus counting $1.6M every year for 6 years it comes out $833K the first year, $1.6 the next 5 years then drops to $833K again the last year if a seven year deal.
that's pretty impressive
