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Bloomberg: Buffalo Bills Attempt Better Football Team Through Bookkeeping

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Buffalo Bills Attempt Better Football Team Through Bookkeeping

By Aaron Kuriloff

    April 27 (Bloomberg) -- Buffalo Bills General Manager Marv
Levy says his team, which hasn't made the National Football
League playoffs in seven seasons, is rebuilding the old-
fashioned way: through conservative accounting.
    Levy, whose Bills pick 12th in tomorrow's NFL player draft,
says the franchise is ignoring the bookkeeping some teams use to
put off the full effect of the annual salary cap imposed by the
league. Instead, the Bills are accounting for certain player
costs in the year they're incurred.
    The Bills' aim is to avoid a harsh fiscal day of reckoning.
Buffalo should know. After four consecutive Super Bowl
appearances during the 1990s, the team was driven into the NFL's
cellar because it didn't have enough room under the salary cap
to acquire younger players. The Bills have now decided it's
better to book player costs up front rather than amortize them.
    ``You view the salary cap as a credit card,'' says Jeffrey
Littmann, the team treasurer. ``You can run it up, but it isn't
going away.''
    Accountants become as important as quarterbacks in the NFL
off-season as teams sign free agents and select rookies at the
league's draft, which begins tomorrow at Radio City Music Hall
in New York City. They are tasked with squeezing as much talent
as possible under the $109 million salary cap, created in 1994
to keep rich teams from buying up all the good players.


    Much of that talent arrives this weekend, as the league's
32 teams select 255 of the nation's best college prospects in a
seven-round draft spanning two days. Deciding how to pay those
players without setting the team up for a financial crunch can
consume weeks of the off-season.
    A common method is to account for bonuses -- typically the
only money a player is guaranteed -- over the life of the
contract, even though the player is paid in full right away.
Under that method, a $3 million signing bonus as part of a
three-year contract would count $1 million against the cap in
each of three successive years.
    The team takes a hit if the player is cut or retires before
his contract expires: It still needs to account for the entire
$3 million, even though the player is no longer on the team. NFL
executives call that ``dead money.''
    That's what crippled the Bills after a team anchored by
such stars as quarterback Jim Kelly, running back Thurman Thomas
and defensive end Bruce Smith won the American Football
Conference championship an unprecedented four straight seasons
from 1990 through 1993. When the salary cap rule took effect in
1994, Buffalo tried to keep the team together.

                         Bonus Trouble

    As top players left or retired, the Bills ended up with
their prepaid bonuses still counting against the cap. That kept
the team from spending on talented younger players to replace
them. After winning more games than they lost four of five
seasons from 1995 to 1999, the Bills finished the 2001 season 3-
13. They've had one winning season since.
    ``We kept that team together a few years after our Super
Bowl run at great cap expense,'' Littmann says. ``Then we went
through the bust and ate the dead money and had to rebuild.''
     At the time, the Bills chose to borrow cap room from
future seasons, Littmann says. That'll be different this year.
    ``We're managing our household expenses with a debit card
instead of a credit card,'' he says.
    Levy, 81, who coached the four AFC championship teams and
became general manager last season, underscores the point.
``We're not going to amortize away the future,'' he says.
    The Bills aren't the only team wrestling with bookkeeping
issues, says Philadelphia Eagles President Joe Banner. Last
year, rule changes prohibited teams from recovering some bonuses
if players misbehave or refuse to play without a new contract.
That's left teams wondering if Buffalo's conservative approach
might be a model for the future.

                         Close to Cap

    Banner says ``every team is evaluating'' whether it should
try to reduce financial swings and stay closer to the cap each
    Most NFL teams with strong records have been through a
similar experience as the Bills, Littmann says, estimating that
half of the league now tries to achieve some kind of balance.
    Some franchises simply allow players to depart when they
become high-priced, he says. The Bills lost starters to free
agency last month, including linebacker London Fletcher-Baker
and Pro Bowl cornerback Nate Clements, and the team traded away
starting running back Willis McGahee and Pro Bowl linebacker
Takeo Spikes.
    At the same time, the Bills started spending some of about
$30 million they had left under the salary cap by retaining many
less-accomplished free agents while acquiring players such as
Darwin Walker, who started at defensive tackle for the division
champion Philadelphia Eagles last season.
    ``If you keep your feet underneath you, then you can make
those decisions, rather than having events outside your control
make those decisions,'' Littmann says.

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