What does $31M contracts do to the Salary Cap?

[1niksder]

The quick answer would be “NOT MUCH.” The response to this answer is normally taken to mean the person that answered the question does know much about the cap.

The honest answer is “it depends on the structure of the contract” this doesn’t answer the question but it sounds good and it is a answer although it doesn’t tell you anything.

The Redskins gave out a few $30M contracts over the pass few days so I figured I’d try and answer the question. My answer would be a combination of both answers above.

The Randle El deal looks to be $31,250,000.00 over seven years. Saying it won’t do much to the cap would sound crazy without looking at the structure. So here we go:

$31M over 7 years including $11.5M in guaranteed money.

So with about a third of the monies guaranteed, there is about $20M that needs to be accounted for, and that’s 7 years worth of salary. I’ll get back to the guaranteed money in a minute, there more money in the salary so I’ll deal with that first.

Rumor has it that ARE’s yearly base will be:

$585,000.00 in 2006
$595,000.00 in 2007
$820,000.00 in 2008
$4,000,000.00 in 2009
$4,250,000.00 in 2010
$4,500,000.00 in 2011
$5,000,000.00 in 2012

The yearly base would count each year towards the cap, so we see here Randle El’s base is under a million dollars the first 3 years then rockets in years 4. Remember this number will only affect the cap if he is on the team.

Now back to the Bonus money. He got $11.5M right?

Same rumor said it would be:

$5M signing bonus - $1.5M Roster bonus (to be paid in 2009) and $5M in a option bonus (to be paid in 2007 and this will allow 2012 to be voided)

So the only guaranteed money being paid or counted against the cap this year appears to be $5M. With the New CBA that will be pro-rated over 5 years meaning $1M against the cap years.

In other words Randle El’s cap hit looks to be about $1,585,000.00 in 2006 or should I say “NOT MUCH”

In 2007 his salary jumps $10K but he’ll be due another $5M of that original $11.5M Bonus (there is still $6.5 unpaid). This money will be pro-rated over 6 years because the CBA allows it. That’s another $833,333.00 added to the 2007 cap. Again “NOT MUCH” or $2,428,333.00

In 2008 it’ll be $2,653,333.00 but then it will get crazy with a $4M base and the last of the guaranteed money ($1.5M Roster Bonus). I’m not going to get into what will happen here, I could see 2 years being added to his contract (2012 was voided, so I’m talking though 2013), most of the base and all of the roster bonus being converted to signing bonus (because of the 2 years extension) then prorated over the 5 years. To be honest, at this point my answer to the original question would be I have no clue what the cap impact will be in 2009.

How does a $31M contract affect the Cap?

In the end I’ll say no NFL contract is what it appears to be, and Randle El signed a seven year contract worth $31,250,000.00

Before he signed it I’m sure his agent told him what you are really signing is a contract that’s half the size that will be reported and it’s only worth $16,666,667.00 but you’ll get almost $12M the first 2 years.

If he let go before the Roster Bonus is due in 2009 his cap hit would be $5,333,333.00 if he is on the roster his cap hit would be $7,333,333.0

After 3 years if “the Danny” isn’t getting his money’s worth after 3 years he has a contract structure in a way that he can cut his losses. ARE gets a lot up front but has the opportunity to make a whole lot more if he plays as expected.

I heard lloyd and AA’s contracts are structured the same way, so my question is. If “the Danny” has figured it out why haven’t others?

[Hoss]

1niksder,

nice post. i've wondered also why other teams don't do the same. seems to me to be pretty good business.

again, thanks for the breakdown.

[Irn-Bru]

Shhh. Don't spread Danny's secrets.

[MyrtleBeachRedskin]

thanks for the good post though 1niks

[gay4pacman]

nice man

[SkinsFanInHawai'i]

Great post.
Other teams fans need to look at this before they start talking all their crap.

My guess for why other teams don't do this is because they are cheap and want to pocket as much money as possible.

[roybus14]

This is why I don't understand why so many so-called skins fans are up in arms over these signings. Danny has finally stepped back and let the people that know how to run things, run things. I am sure that he had his finance folks study this cap thing night and day so that they can make these moves.

Questions to those skins fans that are drinking the "haterade" on our off-season moves:

1. Who else was out there that we could have gotten for these prices?

2. The season hasn't even started yet, so we don't know how these guys will perform, so why not just wait and see?

3. How many of these signed players are over 30? So not only did we get some good talent but some young and good talent.

[Englands Team]

Ah this salary cap buisness is finally making sense. I understand it a little better now. Thanks

[joebagadonuts]

See, I could read all that mumbo jumbo and have to use my brain, or I could just trust the experts like Pastabelly to think for me, which is just so much easier. That way, I can be at the water cooler saying, 'Man, did you see how much the skins overpaid for [enter free agnet name here]?!?' and be cool.

[JansenFan]

Yeah, but we overpaid for him!!!

right?

[patjam77]

Yeah Danny raised ticket prices on me but I don't care. He takes my money and puts it back into the team. As long as Snyder owns this team there may be 1 or 2 years of rebuilding but we can always expect him to do and spend what it takes to make this team competitive. Thanks Danny!

[Fios]

Nicely done, why ESPN is incapable of (or simply refuses to do) that kind of analysis is beyond me

[REDEEMEDSKIN]

Danny raised ticket prices on me but I don't care.

You know, I have a flying carpet you might be interested in. Really, it'll get you in and out of the stadium quickly. And it'll only cost you $1.5 million dollars. Some proceeds from that sale will go directly to the Redskins organization as well (via Redskins Store purchases for me).

Are you interested?

You must buy now!!!!

[thaiphoon]

Shhh. Don't spread Danny's secrets.

Yes.... shhhhhhhhh

[HEROHAMO]

The quick answer would be “NOT MUCH.” The response to this answer is normally taken to mean the person that answered the question does know much about the cap.

The honest answer is “it depends on the structure of the contract” this doesn’t answer the question but it sounds good and it is a answer although it doesn’t tell you anything.

The Redskins gave out a few $30M contracts over the pass few days so I figured I’d try and answer the question. My answer would be a combination of both answers above.

The Randle El deal looks to be $31,250,000.00 over seven years. Saying it won’t do much to the cap would sound crazy without looking at the structure. So here we go:

$31M over 7 years including $11.5M in guaranteed money.

So with about a third of the monies guaranteed, there is about $20M that needs to be accounted for, and that’s 7 years worth of salary. I’ll get back to the guaranteed money in a minute, there more money in the salary so I’ll deal with that first.

Rumor has it that ARE’s yearly base will be:

$585,000.00 in 2006
$595,000.00 in 2007
$820,000.00 in 2008
$4,000,000.00 in 2009
$4,250,000.00 in 2010
$4,500,000.00 in 2011
$5,000,000.00 in 2012

The yearly base would count each year towards the cap, so we see here Randle El’s base is under a million dollars the first 3 years then rockets in years 4. Remember this number will only affect the cap if he is on the team.

Now back to the Bonus money. He got $11.5M right?

Same rumor said it would be:

$5M signing bonus - $1.5M Roster bonus (to be paid in 2009) and $5M in a option bonus (to be paid in 2007 and this will allow 2012 to be voided)

So the only guaranteed money being paid or counted against the cap this year appears to be $5M. With the New CBA that will be pro-rated over 5 years meaning $1M against the cap years.

In other words Randle El’s cap hit looks to be about $1,585,000.00 in 2006 or should I say “NOT MUCH”

In 2007 his salary jumps $10K but he’ll be due another $5M of that original $11.5M Bonus (there is still $6.5 unpaid). This money will be pro-rated over 6 years because the CBA allows it. That’s another $833,333.00 added to the 2007 cap. Again “NOT MUCH” or $2,428,333.00

In 2008 it’ll be $2,653,333.00 but then it will get crazy with a $4M base and the last of the guaranteed money ($1.5M Roster Bonus). I’m not going to get into what will happen here, I could see 2 years being added to his contract (2012 was voided, so I’m talking though 2013), most of the base and all of the roster bonus being converted to signing bonus (because of the 2 years extension) then prorated over the 5 years. To be honest, at this point my answer to the original question would be I have no clue what the cap impact will be in 2009.

How does a $31M contract affect the Cap?

In the end I’ll say no NFL contract is what it appears to be, and Randle El signed a seven year contract worth $31,250,000.00

Before he signed it I’m sure his agent told him what you are really signing is a contract that’s half the size that will be reported and it’s only worth $16,666,667.00 but you’ll get almost $12M the first 2 years.

If he let go before the Roster Bonus is due in 2009 his cap hit would be $5,333,333.00 if he is on the roster his cap hit would be $7,333,333.0

After 3 years if “the Danny” isn’t getting his money’s worth after 3 years he has a contract structure in a way that he can cut his losses. ARE gets a lot up front but has the opportunity to make a whole lot more if he plays as expected.

I heard lloyd and AA’s contracts are structured the same way, so my question is. If “the Danny” has figured it out why haven’t others?

Thank you very much this is why the Gms get paid the big bucks this is there job!

[reggiebrooks4life]

They have figured it out...the thing is 90% of NFL owners are too cheap to shell out the guaranteed money

[SkinsFanInHawai'i]

Yeah I wish other teams fans would criticize there owners for not trying to put the best possible team on the field, rather than say we must be cheating or what we do is not right.

I think most of them are just ignorant to how the cap works.

[skinsfan1]

check here for contract info....
http://www.skinsfans.com/pcinoz/Contracts%20Chart.htm

[1niksder]

check here for contract info....
http://www.skinsfans.com/pcinoz/Contracts%20Chart.htm

This one isn't bad and should be current in a few days

[Deadskins]

If ARE works out, the Danny will renegotiate his contract prior to the 2009 season. Most of that money will be pushed back again.