What does $31M contracts do to the Salary Cap?
Posted: Thu Mar 16, 2006 11:07 pm
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?
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?
