Salary Cap Questions

[Virgil]

I thought it might be helpful to have a salary cap/contract questions thread for those of us who don't follow the details as well as others.  If anyone wants to answer these, or add other questions, I will update the original post.  If it dies out, okay.

 

1 - If Josh signs an extension this offseason, when does the money kick in?  Does the bonus hit now or is it all at the end of his 5th year?  Same for Edmunds I guess

 

2 - If someone like John Brown restructures their contract into mainly bonus money, how does that affect the cap?  What gets spread out?

 

3 - For FA's like Milano, if they make a back heavy deal with a good bonus, what does that hit look like?

[17islongenough]

Its really hard to answer these questions. You have to know how long these contracts are for.  Bonus money gets spread out evenly over the contract length(cap wise).  

 

For Allen it depends on how they set it up.   Like Tres contact isn't effective until next year. I could be wrong on Tre though.  

[SlimShady'sSpaceForce]

8 minutes ago, Virgil said:

I thought it might be helpful to have a salary cap/contract questions thread for those of us who don't follow the details as well as others.  If anyone wants to answer these, or add other questions, I will update the original post.  If it dies out, okay.

 

1 - If Josh signs an extension this offseason, when does the money kick in?  Does the bonus hit now or is it all at the end of his 5th year?  Same for Edmunds I guess

 

2 - If someone like John Brown restructures their contract into mainly bonus money, how does that affect the cap?  What gets spread out?

 

3 - For FA's like Milano, if they make a back heavy deal with a good bonus, what does that hit look like?

no earlier than the 2022 season. 
 

the Bills just don’t have the cap space this year.  
 

 

[Virgil]

4 minutes ago, 17islongenough said:

Its really hard to answer these questions. You have to know how long these contracts are for.  Bonus money gets spread out evenly over the contract length(cap wise).  

 

For Allen it depends on how they set it up.   Like Tres contact isn't effective until next year. I could be wrong on Tre though.  

 

Agreed, but I figured examples couldn't hurt.  I feel like it's going to be a fun few months of shoulda, coulda, woulda speculation

 

[ColoradoBills]

5 minutes ago, 17islongenough said:

Its really hard to answer these questions. You have to know how long these contracts are for.  Bonus money gets spread out evenly over the contract length(cap wise).  

 

For Allen it depends on how they set it up.   Like Tres contact isn't effective until next year. I could be wrong on Tre though.  

 

Signing Bonus money must be paid out over a MAXIMUM of 5 years.  

 

One interesting and I'm sure "negotiable" aspect of the signing bonus is this.

Teams can convert base salary into signing bonus after the new extension contract is signed.

What that means is if there is still a year left on the rookie contract and/or a 5th year option some of the signing bonus does

not necessarily increase the original cap hit.

[Seventeen]

If Josh were to sign a long-term deal this year, I would assume that 1/5 of the new signing bonus would be added to the 3.3 mil already on the books for his rookie signing bonus for 2021 and the rest of the contract would be applied starting with the 2022 season. 

[ColoradoBills]

29 minutes ago, Virgil said:

I thought it might be helpful to have a salary cap/contract questions thread for those of us who don't follow the details as well as others.  If anyone wants to answer these, or add other questions, I will update the original post.  If it dies out, okay.

 

1 - If Josh signs an extension this offseason, when does the money kick in?  Does the bonus hit now or is it all at the end of his 5th year?  Same for Edmunds I guess

 

2 - If someone like John Brown restructures their contract into mainly bonus money, how does that affect the cap?  What gets spread out?

 

3 - For FA's like Milano, if they make a back heavy deal with a good bonus, what does that hit look like?

 

1.  First off all "franchise type QBs" signing an extension have their 5th year option picked up.  Mahomes, Watson, Goff all did this.

It's a way for the drafting team to get another year on the contract.  Whether the cap goes up after the extension is signed is a negotiable

aspect.  I feel with the situation the Bills are in this year Josh will accept that the "cap hit" will remain low for 2021.

This 5th year option is a teams decision and the player has no choice.  He either signs it or not.

 

2.  Restructures typically come in 2 types.

1.  A pay cut.  This is not done very often though it does happen.

2.  Restructure to decrease the upcoming years cap hit.  In Browns case he only has 1 year left on his contract so this can't be used.

It could IF he signs for additional years,

Typical restructure is done with players that have 2 or more years left on their contract with available non guaranteed salary.

Simple way is a player has a non guaranteed $10M cap hit for 2021 with 10 million due in 2022 and 2023.  A restructure of 6 million means that the

6M is "split" over the 3 years.  What happens is this.

2021- 6M cap hit. (4M unguaranteed salary + 2M restructure bonus).  Team saves 4M in 2021 and pays the rest over the next 2 years.

2022- 12M cap hit.  (10M unguaranteed salary + 2M restructure bonus)

2023- 12M cap hit.  (10M unguaranteed salary + 2M restructure bonus)

 

3.  Lots of room for negotiations in the "Milano" situation.

Lets just say he signs a 3 year 33M deal.  That's an average of 11M a year.  The 1st year hit could be as low as lets say 6M.

But that means the other 2 years would be averaged of 13.5M.

[Alphadawg7]

Anyone know where we are currently at heading into the offseason with our cap space?  How much cap space do we have right now?

[ColoradoBills]

6 minutes ago, Roy Hobbs said:

If Josh were to sign a long-term deal this year, I would assume that 1/5 of the new signing bonus would be added to the 3.3 mil already on the books for his rookie signing bonus for 2021 and the rest of the contract would be applied starting with the 2022 season. 

 

Typically yes.

His new contract will start the extension in 2023.  2022 will be a 5th year option.

4 minutes ago, Alphadawg7 said:

Anyone know where we are currently at heading into the offseason with our cap space?  How much cap space do we have right now?

 

$6M over (in the hole) at the $175M cap "floor".  It's already being talked about that the 175M will be higher.

How much no one knows yet not even Beane.

[Seventeen]

5 minutes ago, ColoradoBills said:

 

Typically yes.

His new contract will start the extension in 2023.  2022 will be a 5th year option.

 

$6M over (in the hole) at the $175M cap "floor".  It's already being talked about that the 175M will be higher.

How much no one knows yet not even Beane.

 

Thanks - Mahomes' new contract would start in 2022, not Allen.

 

Also, if the Bills pick up Josh's 5th year option, it sounds like his salary will be pretty high (and the cap hit) based on this ... 

 

The option for top-ten picks is set at an amount equal to the salary of the Transition Tender (set in Article 10, Section 4 of the CBA) for the player’s fourth contract year. This salary is calculated, to put it simply, by finding the average of the top ten highest Prior Year Salaries for players at the same position. Positions are defined by where a player spent the most plays during the previous season (Sec. 7, (a), 31), unless you ask Jimmy Graham.

[ColoradoBills]

3 minutes ago, Roy Hobbs said:

 

Thanks - Mahomes' new contract would start in 2022, not Allen.

 

Also, if the Bills pick up Josh's 5th year option, it sounds like his salary will be pretty high (and the cap hit) based on this ... 

 

The option for top-ten picks is set at an amount equal to the salary of the Transition Tender (set in Article 10, Section 4 of the CBA) for the player’s fourth contract year. This salary is calculated, to put it simply, by finding the average of the top ten highest Prior Year Salaries for players at the same position. Positions are defined by where a player spent the most plays during the previous season (Sec. 7, (a), 31), unless you ask Jimmy Graham.

 

For sure it's pretty high but it's a lot less than the yearly average on the extension contract.

For example:  Mahomes signed a 10 year $450M ($45M yearly average) but he will be playing on his 5th year this coming 2021 season.

His cap hit this coming year is ONLY $24.8M.  LOL, only $24.8M.

[Hapless Bills Fan]

29 minutes ago, Virgil said:

I thought it might be helpful to have a salary cap/contract questions thread for those of us who don't follow the details as well as others.  If anyone wants to answer these, or add other questions, I will update the original post.  If it dies out, okay.

 

1 - If Josh signs an extension this offseason, when does the money kick in?  Does the bonus hit now or is it all at the end of his 5th year?  Same for Edmunds I guess

 

2 - If someone like John Brown restructures their contract into mainly bonus money, how does that affect the cap?  What gets spread out?

 

3 - For FA's like Milano, if they make a back heavy deal with a good bonus, what does that hit look like?

 

Excuse if this is more basic than you're looking for.  Your questions are hard to answer as written.

 

Generally, signing bonus money gets paid immediately (why it's called a signing bonus) and amortized over the life of the contract.  But there are wrinkles.

Tre' White is probably a good guy to use as an example, because his new contract uses some of the creative wrinkles available to a team.

 

As the #27 pick in the 2017 draft, Tre White signed a 4 year contract with a signing bonus of $5.479M.  This was paid up-front, but for cap purposes divided into 4 annual cap hits of $1.37M. 

 

When Tre signed his 4 contract extension, he was given a signing bonus of $10.5M.  Since it includes this year, that was effectively a 5 year contract starting this season and the bonus was divided into 5 $2.1M portions.  Thus, his signing bonus for this season became $3.47M.  This was a neat trick to give him a bigger signing bonus - it's actually an $18M signing bonus - without slamming Tre's taxes super hard and with benefits to our cap structure.

 

BUT!  Next year, his amortized signing bonus is shown as $3.6M; what's up with that?  Welllll that's trick #1.  The Bills will give him an option bonus of $7.5M this spring that extends his contract an additional year, thus adding $1.5M to his signing bonus amortization for this season. 

 

Upon signing, White also got a nice bump-up in salary, probably of about  $6.4M, up from ~$1.8M to $8.25M.

https://www.spotrac.com/nfl/buffalo-bills/tredavious-white-21768/cash-earnings/

https://overthecap.com/player/tredavious-white/5611/

 

Other wrinkles, which can be seen in Matt Stafford's contract, would be putting some money in roster bonuses (trick #2), and the addition of a "voidable year" (trick #3) to amortize the signing bonus of a 5 year contract over 6 years.  Up front, I don't understand what the cap or other benefit to the team may be in putting money in roster bonuses.  Sometimes it's a way of hedging bets on guaranteed money as they may only guarantee near the start of the league year, but sometimes they are fully guaranteed or guaranteed for injury.

 

So to take a whack at your questions:

1) if Josh signs next year and wants up front money when he signs (most guys do), any signing bonus will kick in next year, divided over the length of the contract

But, as with Tre White, we can add tricks like an "option bonus" that extends his contract and essentially gives him a second signing bonus NEXT year.  He would also likely want a salary boost, and that would be added in immediately, but sometimes players take a low salary initially and more in bonuses.

 

2) If Brown renegotiates his contract into largely signing bonus money, the bonus money would get spread out over the length of the renegotiated contract, whatever that may be

 

3)  Too many variables for a meaningful answer.  Let's say for example, Milano were to sign a 5 year contract similar to Anthony Barr (of "Josh Allen Jumping Over Things fame).  Barr received a $13M signing bonus so $2.6M/ yr.  That's what he put in his bank account immediately.  His first year salary was only $2.9M, fully guaranteed, giving him $15.9M fully guaranteed.  In 2021, his salary goes up to $10M, which vests from injury-only to fully guaranteed at the start of the new year.

 

Does this help?

[eSJayDee]

I'll add that WRT Milano's situation, one of the ways I think this regime is fiscally responsible is to not give large bonuses.  What some teams do, is give large bonuses w/ small initial yr(s) salaries.  This allows you to easier afford signings by pushing fwd the liability.  Problem w/ this is if the player doesn't work out, you're left w/ substantial dead cap when you release them.  As much as possible, I think we currently pretty much "pay as you go".

[NoSaint]

1 hour ago, Virgil said:

I thought it might be helpful to have a salary cap/contract questions thread for those of us who don't follow the details as well as others.  If anyone wants to answer these, or add other questions, I will update the original post.  If it dies out, okay.

 

1 - If Josh signs an extension this offseason, when does the money kick in?  Does the bonus hit now or is it all at the end of his 5th year?  Same for Edmunds I guess

 

2 - If someone like John Brown restructures their contract into mainly bonus money, how does that affect the cap?  What gets spread out?

 

3 - For FA's like Milano, if they make a back heavy deal with a good bonus, what does that hit look like?

signing bonus will amortize evenly across the first 5 years of any deal. 
 

the rest would depend greatly on the contracts themselves. For instance josh could rip up the rest and start fresh, or simply add years. Where they add the money would effect the cap hits. If he had a signing bonus, obviously would be the case, that gets amortized 

[NoSaint]

6 minutes ago, eSJayDee said:

I'll add that WRT Milano's situation, one of the ways I think this regime is fiscally responsible is to not give large bonuses.  What some teams do, is give large bonuses w/ small initial yr(s) salaries.  This allows you to easier afford signings by pushing fwd the liability.  Problem w/ this is if the player doesn't work out, you're left w/ substantial dead cap when you release them.  As much as possible, I think we currently pretty much "pay as you go".

russ Brandon really ruined some of you by selling the cash to cap structure. 
 

it’s not the overwhelming structure here nor is it particularly viable. The only way you are getting low bonus, and low guaranteed salary guys is if you are getting either bad or high risk players.

[Tommy Callahan]

Sucks to be a free agent this year.  No one has cap room.  Lots of good players/vets will be on the market 

[eSJayDee]

8 minutes ago, NoSaint said:

russ Brandon really ruined some of you by selling the cash to cap structure. 
 

The "cash to cap" was really just a clever marketing slogan so as to justify not spending TO the cap.  You're obviously limited by the cap for amortized money, but if you also constrain yourself by "cash to cap" it really means you're gonna spend (well) below the cap.

 

There's a difference between the previous regimes "cash to cap" "strategy" & actually a "pay as you go" (to the extend practical) that we currently seem to employ.

[Buddo]

45 minutes ago, Alphadawg7 said:

Anyone know where we are currently at heading into the offseason with our cap space?  How much cap space do we have right now?

 

Roughly around -$6 million, if the cap is at its agreed 'floor' of $175million. https://www.spotrac.com/nfl/buffalo-bills/cap/

 

Tbh, I don't think the cap will be as low as $175m. For a variety of reasons, not least of which will be the NFLPA won't want it that low.

 

I've read somewhere, that a number of owners are more keen on taking an immediate 'bath' for the cap hit, so would like it to be at the $175m floor, but I don't think they will manage that. The current number was around $198m and about half the league is going to be comfortably over the $175m floor.

 

Get the cap to about $185 million, and it then gets only about 10 teams over it immediately.

 

Another reason why it might not hit the 'floor', is that a whole load of TV deals are coming back up for renewal, within a couple of years time. After 2021, Fox has to renew, and I think most of the other networks are the year after. That means that there will be increased resources available after next season.

[Mat68]

2 hours ago, Virgil said:

I thought it might be helpful to have a salary cap/contract questions thread for those of us who don't follow the details as well as others.  If anyone wants to answer these, or add other questions, I will update the original post.  If it dies out, okay.

 

1 - If Josh signs an extension this offseason, when does the money kick in?  Does the bonus hit now or is it all at the end of his 5th year?  Same for Edmunds I guess

 

2 - If someone like John Brown restructures their contract into mainly bonus money, how does that affect the cap?  What gets spread out?

 

3 - For FA's like Milano, if they make a back heavy deal with a good bonus, what does that hit look like?

With Allen the benefit of now vs 2 years from now.  You pick up the 5th year option and extend 4,5,6, 7 years.  Next year and the 5th year you picked up cap hit is the same.  Its really a 6,7,8,9 year total deal.  The reason the player does it?  The guaranteed money, a large % is given upfront.  Money paid to a player as signing bonus can be spread to any year of the contract as the cap hit.  

 

With brown you would be spreading the hit out further down the line.  The question Buffalo has to ask themselves.  Is he on the back 9?  And where.  Smaller fast guys age quick.  Lower leg injuries steals their only weapon.  Possesion style plays vs coverage imo he struggles with.  Without seperation he disapears very quickly.  In the following years is he going to be better than this year.

 

Your just stealing from the future cap.  With Allen I dont think thats a good idea.  In 3 years the Qb hit is coming.  I think Buffalo has a number with Milano.  Also, he was a late pick.  I like Mcdermott with bakers.  Imo i put money on offense and realy on Mcdermott for the defense.  He can put a solid group together.  Duck tape in some mid level vets and I think he can make a scappy unit.   

[djp14150]

2 hours ago, Virgil said:

I thought it might be helpful to have a salary cap/contract questions thread for those of us who don't follow the details as well as others.  If anyone wants to answer these, or add other questions, I will update the original post.  If it dies out, okay.

 

1 - If Josh signs an extension this offseason, when does the money kick in?  Does the bonus hit now or is it all at the end of his 5th year?  Same for Edmunds I guess

 

2 - If someone like John Brown restructures their contract into mainly bonus money, how does that affect the cap?  What gets spread out?

 

3 - For FA's like Milano, if they make a back heavy deal with a good bonus, what does that hit look like?

 

Q1 structured where it takes effect in 2022. He gets some bonus money ehrn signing. That’s how Mahomes is. Low cap in 2020 high in 2021

 

Q2. Any salary restructure for bonus money pushes it along the contract depending on how it’s worded.

 

Q3. It’s all on how they structure it.  Thrycoukd I sre options fir buyout or bonus that coukd force him to get cut before the contract ends Then buffalo has dead space.