Potential Salary Cap Credits - More Cap Space ?

[Est.1974]

I'll start this by stating this is purely my opinion. No hard facts anywhere, just something that may be out there that is of general interest, probably more to those who look more closely at the salary cap, but you never know

I've been taking a look at the available salary cap information for the 2009 season & think we may have a little extra knocking around than many suggest. It may not be an earth shattering number, but it may be a few million more than I have seen quoted elsewhere.

I've been looking at the 'salary cap credits' process & found that teams use this to push cap space back into future years. There is a loophole in the system that allows teams to include incentives into players contracts that are essentially unachievable. However, for cap purposes, these are deemed 'likely to be earned' ( LTBE ) & go straight against the current year cap. Following the season, the value of these LTBE incentives that were not reached ( nor paid ), get 'given' back & allocated to the following seasons cap. So, to explain for the 'skins ;

Towards the end of the 2007 season, we had circa 2m in spare cap. We included 1.8m into the contract of Randall Godfrey for LTBE incentives. These were not reached.

At the start of the 2008 cap year, the NFL cap was 116.7m ( most people understate this at 116m). The NFL also gave us back the 1.8m 'cap credit', Our actual cap became 118.5m for 2008.

Back to real time. Most people state that we finished up about 113m in the cap & suggest we were 3m under ( against the 116m ). I think this is understated & is more likely to be 5.5m under ( 113m v 118.5m )

The key is, this would still be available to carry into 2009 if we have included some LTBE incentives into contracts at the back end of the season. We've done it before with Randall Godfrey so we are not going to lose any available space this year.

Two things could happen here ;

1- We use the space to resign players now ( 5.5m is not to be laughed at in our situation ) or,

2- We have utilised the loophole again & our projected cap space for 2009 increases from the predicted 123m to 128 / 129m region.

This does happen & as an example, last year the Vikings gained circa 15m in cap credits.

Putting the 5m in context, it would cover the rookie pool, or one major FA signing, or 3-4 resignings / depth guys.

Is anyone else familiar with this process / think this may happen / find this totally boring etc etc.

I also promise to bump this thread if it happens

[Gibbs Hog Heaven]

I must prefess I've never heard of "cap credits", but interesting to find out about them.

The incentives for Randall Godfrey still applied as recent as '07 huh? Wow, just shows you how these contracts are set out so many years in advance.

Whichever way you look at it, be we use the "bonus" space now, or defer it through next year, every little helps, especially when you live right on the edge as we constantly do as regards the cap.

Good, enlightening research UKSF. Thank you. :applause:

Hail.

[Est.1974]

The incentives for Randall Godfrey still applied as recent as '07

I'm sure he was here for the 2007 season on a 1yr deal,

I bet he made something out of it for his part in the process

[Kurd Cudins]

You are right, this is a great tool that many teams have utilized over the last few years. However, why do you think the value of less than $3M is understated?

[Gibbs Hog Heaven]

I'm sure he was here for the 2007 season on a 1yr deal' date='

I bet he made something out of it for his part in the process [/quote']

Awww ****, ignore me. I remember the Godfrey pick up now during that season.

I was thinking about two other long standing pro's, Stubblefield and Wilkinson, for some bizarre reason, given they were different positions to Godfrey. :doh:.

Again, good, informative post all the same UKSF.

Hail.

[Est.1974]

You are right' date=' this is a great tool that many teams have utilized over the last few years. However, why do you think the value of less than $3M is understated?[/quote']

Only because of the 2008 salary cap stuff I have seen on the 'net, most state that our cap for the year ( 2008 ) is 116m. I think this number was 118.5m

The sites imply we used 113m for the year ( so far ), which against an opening cap of 118.5m, gives us 5.5m spare.

I think the starting position is understated, but don't know 100% for sure.

But, I am far from being an expert, just a boring accountant playing with a few numbers (& therefore my statement may be far from accurate )

[Kurd Cudins]

Only because of the 2008 salary cap stuff I have seen on the 'net' date=' most state that our cap for the year ( 2008 ) is 116m. I think this number was 118.5m

The sites imply we used 113m for the year ( so far ), which against an opening cap of 118.5m, gives us 5.5m spare.

I think the starting position is understated, but don't know 100% for sure.

But, I am far from being an expert, just a boring accountant playing with a few numbers (& therefore my statement may be far from accurate ) [/quote']The sites I use for cap info have since taken down their 2008 numbers, but they used 118.5M as a base and at least one had us having less than a $1M of cap room by the end of the season. Because of injuries we had to put guys on IR and sign replacements, which is hell for cap management. I think we'll be lucky to get $1.5M in credits, but you are absolutely right that every little bit helps.

PC's Redskins Salaries and Contracts Pages

http://www.thewarpath.net/WarpathRedskinsCap.htm

[Est.1974]

At the expense of asking a really stupid question, when does the 2008 cap year finish ?

Is it the end of Feb 2009 prior to Free Agency starting ? ie, when we must be under our new cap number ?

Edit : Thanks for the info & links, LMB

[SkinFanNM]

I don't mean to change topic here, but I enjoy reading the posts that have to do with the salary cap... and I find that very few fans actually know what is going on (I'm certainly no pro, but I've been closely following the skins cap for about 2 yrs now).

So I thought I would pose a few questions for you all:

1) Correct me if I'm wrong... but according to the cap sites that Lloyd's Mongolian posted (I look at the exact same sites), there is NO WAY for the skins to maneuver in FA/draft without releasing players like Taylor, Springs, Washington, Griff, Daniels (etc... players with low release fees).

I realize that we could continue to restructure, but GOOD GRIEF, who?! Most of the contracts have been restructured to the point of lunacy... I really wouldn't restructure anyone aside from Landry, Rabach, and maybe Moss (maybe we could get another 4 million here).

2) What is the deal with release fees? I was under the impression that we could "take the hit" over the remainder of a player's contract length... however, recently I read somewhere that the CBA changed the rules, saying that a team not has to take the full cap hit the same year they release the player.

[ToaCommander]

...saying that a team not has to take the full cap hit the same year they release the player.

I think the cap hit would come the following year/season against our cap space.

[Kurd Cudins]

I don't mean to change topic here, but I enjoy reading the posts that have to do with the salary cap... and I find that very few fans actually know what is going on (I'm certainly no pro, but I've been closely following the skins cap for about 2 yrs now).

So I thought I would pose a few questions for you all:

1) Correct me if I'm wrong... but according to the cap sites that Lloyd's Mongolian posted (I look at the exact same sites), there is NO WAY for the skins to maneuver in FA/draft without releasing players like Taylor, Springs, Washington, Griff, Daniels (etc... players with low release fees).

I realize that we could continue to restructure, but GOOD GRIEF, who?! Most of the contracts have been restructured to the point of lunacy... I really wouldn't restructure anyone aside from Landry, Rabach, and maybe Moss (maybe we could get another 4 million here).

2) What is the deal with release fees? I was under the impression that we could "take the hit" over the remainder of a player's contract length... however, recently I read somewhere that the CBA changed the rules, saying that a team not has to take the full cap hit the same year they release the player.

1) Restructuring is an extremely complicated thing. There are many different things you can do to save money. The most popular/easiest is to turn a roster bonus or base salary into signing bonus money by guaranteeing it. This spreads the amount evenly over the remainder of the contract. However, I don't feel we need to make all the moves you suggest, just to get maneuverability. We are currently somewhere between $3-$5M over the 2009 cap(depending on which site is accurate). Our rookie pool, as it stands, will be pretty small, maybe $4.5M. Cutting Jason Taylor saves $8.5M, which basically covers that. We can save ~$4M in total by guaranteeing Landry's and Carter's roster bonuses. The key is that signing players is very inexpensive(salary cap wise) for the first year, because of the way we structure contracts. The alleged 6yr, $48M contract for Hall with $12M guaranteed would have a hit of $2.62M

2)If you release a player before June 1st, his remaining signing bonus is accelerated and counts entirely on that years salary cap. If a player is released AFTER June 1st, or designated as a June 1st cut(each team is allowed two designations), his signing bonus allocation for that year is all that counts, but the remaining signing bonus is then accelerated and counts against the following years cap.

[SkinFanNM]

Thanks for the clarification.

Just curious... How much would you guess it would cost to "take care of our own" aside from Hall? (Montgomery, Evans, maybe Golston, Khary Cambell, Doughty, Fincher, etc.)

[Kurd Cudins]

Thanks for the clarification.

Just curious... How much would you guess it would cost to "take care of our own" aside from Hall? (Montgomery, Evans, maybe Golston, Khary Cambell, Doughty, Fincher, etc.)

Montgomery, Golston and Doughty(along with Suisham and Geisinger) are RFA's. The estimated tenders for this year are:

$1.01 million = original draft pick compensation

$1.545 million = 2nd-round pick

$2.198 million = 1st-round pick

$2.792 million = 1st + 3rd-round picks

Evans is anyone's guess. We may value him more than others because he knows the system and Blache likes him. However, another team may see his value and push his price really high(relatively). Campbell/Fincher could get a multi-year deal from a team that already has a solid LB core and wants to upgrade their special teams. Otherwise, they'll be vet min players with a base salary of $845K, and signing bonus of $50K(cap hit of $510K).

[SkinFanNM]

Wow.

So given that Monty and Golston were 5th and 6th rounders, respectively, we could potentially have them on board for pretty cheap.

If we were to re-sign them in such a fashion, would they become UFA's the following year?

[Est.1974]

2)If you release a player before June 1st' date=' his remaining signing bonus is accelerated and counts entirely on that years salary cap. If a player is released AFTER June 1st, or designated as a June 1st cut(each team is allowed two designations), his signing bonus allocation for that year is all that counts, but the remaining signing bonus is then accelerated and counts against the following years cap.[/quote']

This is an issue at the moment, isn't it ?

My understanding is that without an agreed CBA for 2010, this June 1st cut rule does not apply in 2009. Plus there is also this 30% rule to deal with.

Thats makes restructuring deals far from straight forward at the moment.

When is the CBA due for discussion within the NFL ?

[e16bball]

This is an issue at the moment' date=' isn't it ?

My understanding is that without an agreed CBA for 2010, this June 1st cut rule does not apply in 2009. Plus there is also this 30% rule to deal with.

Thats makes restructuring deals far from straight forward at the moment.

When is the CBA due for discussion within the NFL ?[/quote']

Was going to post just the same.

Normally, LMB's post would have been absolutely correct. However, since 2009 is the last capped year, the rules function differently. June 1 cuts don't exist, at least from the cap ramifications standpoint, and restructuring contracts won't be nearly as effective an approach for us.

Honestly, the writing is absolutely on the wall for guys like Springs, Washington, Daniels, possibly Griffin, hopefully Taylor. Those five guys are on the books for $32M next season (more than 1/4 of the salary cap), and simply aren't earning that kind of coin. In lieu of a paycut, they should probably all be let go.

[Est.1974]

However, since 2009 is the last capped year, the rules function differently. June 1 cuts don't exist, at least from the cap ramifications standpoint, and restructuring contracts won't be nearly as effective an approach for us.

I agree, for teams with limited cap space like the 'skins, this is a big deal.

Using Jon Jansen as an example, as most people want us to cut him ;

His 2009 cap number is 3.4m

If we cut him now, without a June 1st rule, he has 6.2m of cap bonus for 2009-2011 that must hit this years cap. That stuffs us to the tune of an extra 3m.

If we cut him now, an are able to designate him a post June 1st cut, the cap bonus gets spilt over two years. We get 2.1m against the 2009 cap & the remaining 4.1m ( for 2010 & 2011 ) hits the 2010 cap as 'dead cap'.

Whilst the negative is that we get 'dead cap' in 2010, it is much easier to accomodate the cap hit this year ( by using the June 1st rule ).

If the CBA is not sorted very soon ( 2-3 months ), it will be harder to make these tough calls with regards to cutting / retaining players with multiple years left on their contracts.

[SkinFanNM]

If we cut him now, without a June 1st rule, he has 6.2m of cap bonus for 2009-2011 that must hit this years cap. That stuffs us to the tune of an extra 3m.

If we cut him now, an are able to designate him a post June 1st cut, the cap bonus gets spilt over two years. We get 2.1m against the 2009 cap & the remaining 4.1m ( for 2010 & 2011 ) hits the 2010 cap as 'dead cap'.

I'm a bit behind... so what is the rule as of right this second? Is there or is there not a June 1st rule?

If there IS NOT, I assume that we must take the "cap hit" for a player the same year we release them.

Also, you said we could designate who the "post June 1st" cuts are now. What happens to these players in the meantime? Are they allowed to hit free agency this year or are they not allowed to negotiate until after June 1st?

Sorry for all the questions.

[SkinFanNM]

As you can see, I'm still learning how to "quote"

[Est.1974]

I'm a bit behind... so what is the rule as of right this second? Is there or is there not a June 1st rule?

If there IS NOT, I assume that we must take the "cap hit" for a player the same year we release them.

Also, you said we could designate who the "post June 1st" cuts are now. What happens to these players in the meantime? Are they allowed to hit free agency this year or are they not allowed to negotiate until after June 1st?

Sorry for all the questions.

I'm sure as of now, there is no June 1st rule ( which does not help us )Previously, you could designate 2 such cuts to help against the cap. Those players were free to re-sign elsewhere whenever they wanted.