Is the Salary Cap real?

[MAJBobby]

1 minute ago, saundena said:

Ok so this response posted just before my last question.  I still don't get it though.  Why couldn't then the most wealthy owner give everybody ridiculously large contracts to attract all the best players in the league- paying it as a signing bonus if what your saying is that it doesn't impact the cap number.  

They Could.  Signing Bonus does affect your future cap with proration.  However look how Ralph operated.  if the cap is 200M he is only spending 200M that year.  But a cap of 200M the owner could spend DOUBLE that in singing bonuses for and prorate.  You can look at the teams that are routinely up against the cap they have very rich owners and within weeks are no longer against the cap.  Is a liquidity thing

[saundena]

15 minutes ago, MAJBobby said:

They Could.  Signing Bonus does affect your future cap with proration.  However look how Ralph operated.  if the cap is 200M he is only spending 200M that year.  But a cap of 200M the owner could spend DOUBLE that in singing bonuses for and prorate.  You can look at the teams that are routinely up against the cap they have very rich owners and within weeks are no longer against the cap.  Is a liquidity thing

Gotcha, thanks.

 

Are there any rules against paying / compensating players with instruments other than cash?  For instance, a guy like Pegula, let's say he started a shell oil and gas company focused on drilling, fraccing, etc. and paid part of players compensation (provided they and their agents agreed to it) with equity stakes in that company?  If there was an owner that owned a diamond mine, could he pay players in diamonds to offset what he or she would otherwise pay them in money so that it doesn't impact the cap as much?  There must be rules against this, no?

 

Edited March 17, 2022 by saundena

[SlimShady'sSpaceForce]

Smoke and mirrors 

Last week the Bills were on the red. 
 

today $8 to 15 Mil depending on what the website 

 

[Matt_In_NH]

Ask rodgers the packers and Adams.  

[SCBills]

KC fans now freaking out on social media  to restructure Mahomes deal so they can make a move. 

[Thurman#1]

On 3/18/2022 at 1:23 AM, Big Turk said:

 

Then again the Saints showed how easy it is to manipulate the cap without really losing anyone of value...they went from being $70 million over the cap to $30 million under it within a span of a few weeks.

 

 

Screwing selves again.

 

Again, it can be done. Generally shouldn't be. 

 

Everyone does it some, and they should. But overdone, it absolutely can handicap you in future years.

Edited March 19, 2022 by Thurman#1

[Thurman#1]

On 3/18/2022 at 2:28 AM, Giuseppe Tognarelli said:

This. People don't realize that all of these salary-to-signing-bonus conversions hit the owners directly. It's money they wouldn't have to pay otherwise. You have to thank the Pegulas and hope they continue to be willing to do it.

 

 

No. The amount of cash they have to pay is exactly the same. 

 

They just pay it sooner if they change it to a signing bonus.

 

I mean, it's theoretically different, because the guy could get cut before the salary is paid, and once it's a bonus you're on the hook for it.. That's why they only do this kind of deal for guys they're sure will be on the team through the year.

Edited March 19, 2022 by Thurman#1

[Thurman#1]

On 3/18/2022 at 2:43 AM, MAJBobby said:

They Could.  Signing Bonus does affect your future cap with proration.  However look how Ralph operated.  if the cap is 200M he is only spending 200M that year.  But a cap of 200M the owner could spend DOUBLE that in singing bonuses for and prorate.  You can look at the teams that are routinely up against the cap they have very rich owners and within weeks are no longer against the cap.  Is a liquidity thing

 

 

Ralph was cash to cap when he didn't think much of the roster. When he thought they had a real chance to be competitive, he would spend more.

 

As for spending "double," while it's theoretically possible, it doesn't happen.

 

For instance, the highest spender of cash last year was the Saints. They spent $215M. The Bills were 5th at $201.4M.

 

https://www.spotrac.com/nfl/cash/

 

The teams all get the amount of the salary cap, in cash, each year from the league. Liquidity isn't as much of a problem as the owner's urge to draw money out as profit.

[MAJBobby]

1 minute ago, Thurman#1 said:

 

 

Ralph was cash to cap when he didn't think much of the roster. When he thought they had a real chance to be competitive, he would spend more.

 

As for spending "double," while it's theoretically possible, it doesn't happen.

 

For instance, the highest spender of cash last year was the Saints. They spent $215M. The Bills were 5th at $201.4M.

 

https://www.spotrac.com/nfl/cash/

 

The teams all get the amount of the salary cap, in cash, each year from the league. Liquidity isn't as much of a problem as the owner's urge to draw money out as profit.

Bonuses. So yeah it does happen. Just look how much Guaranteed Money JAX gave out so far in UFA. Then add in their cap. They would have spent roughly 350M on players by the end of this year. 

[Thurman#1]

On 3/18/2022 at 3:22 AM, SlimShady'sSpaceForce said:

Smoke and mirrors 

Last week the Bills were on the red. 
 

today $8 to 15 Mil depending on what the website 

 

 

 

 

That's not smoke and mirrors. It's the understanding that many contracts contain possible ways to borrow money from future years, but that if you cash in these coupons, you're making those future less flexible.

 

 

22 minutes ago, MAJBobby said:

Bonuses. So yeah it does happen. Just look how much Guaranteed Money JAX gave out so far in UFA. Then add in their cap. They would have spent roughly 350M on players by the end of this year. 

 

 

Again, look at the link. It shows cash spending for every team in 3021.

 

Do you see any teams approaching $400M?

 

 

22 minutes ago, MAJBobby said:

Bonuses. So yeah it does happen. Just look how much Guaranteed Money JAX gave out so far in UFA. Then add in their cap. They would have spent roughly 350M on players by the end of this year. 

 

 

Dude, that is not a reasonable method. You're counting some money twice.

 

You can't just add in their cap. A great deal of this year's cap was actually paid last year and in the four years before, in bonuses.

 

For a Bills example, Diggs counts as a $17+M cap hit. But he's only receiving $13.561M in cash. (Look at "yearly cash" on Diggs' Spotrac page.

 

Edited March 19, 2022 by Thurman#1

[GunnerBill]

Is the salary cap real? No. The NFL does not have a salary cap. It is totally misnamed. 

 

The NFL has an accounting cap. You can pay players whatever you want but how you account for that with the league is regulated. 

 

When it becomes more like a true salary cap is when you have less wealthy owners who run more of a cash to cap model. Fortunately the Bills are no longer in that position.

[MAJBobby]

10 minutes ago, Thurman#1 said:

 

 

 

That's not smoke and mirrors. It's the understanding that many contracts contain possible ways to borrow money from future years, but that if you cash in these coupons, you're making those future less flexible.

 

 

 

 

Again, look at the link. It shows cash spending for every team in 3021.

 

Do you see any teams approaching $400M?

 

 

Dude, that is a deeply flawed method.

 

You can't just add in their cap. A great deal of this year's cap was actually paid last year and in the four years before, in bonuses.

Go look at JAX guaranteed Money spent so far it is approaching 200M. (Essentially cash). They will be on the hook for 200M in guaranteed money this year. Plus the salaries. That are coming in the season. So when you add guarantees and the signing bonuses and base salaries they are well well above the CAP this year. But hundreds of Millions. 
 

 

On 3/17/2022 at 8:27 PM, 13 Second Prevent Defense said:

Ask rodgers the packers and Adams.  

What about Rogers and Packer and Adams. 
 

it was never about money. Adams told GB he will never play on the Tag. It was more about the relationship between player and team than it was the cap

Edited March 19, 2022 by MAJBobby

[Giuseppe Tognarelli]

46 minutes ago, Thurman#1 said:

 

 

No. The amount of cash they have to pay is exactly the same. 

 

They just pay it sooner if they change it to a signing bonus.

 

I mean, it's theoretically different, because the guy could get cut before the salary is paid, and once it's a bonus you're on the hook for it.. That's why they only do this kind of deal for guys they're sure will be on the team through the year.

But doesn't the conversion create cap space that is then used to pay other players? This is the money I'm referring to that they wouldn't have to pay otherwise. Instead of paying just the full cap, they're now paying bonuses + the full cap

[Thurman#1]

33 minutes ago, Giuseppe Tognarelli said:

But doesn't the conversion create cap space that is then used to pay other players? This is the money I'm referring to that they wouldn't have to pay otherwise. Instead of paying just the full cap, they're now paying bonuses + the full cap

 

 

It doesn't "create" cap space.  It moves cap space from future year/years to this year.

 

You're borrowing from future years. Money paid to a player MUST be taken from the cap. But it can be delayed. That's why they call it kicking cans down the road. That's why all the credit card analogies.

 

There isn't any money that you wouldn't have to pay otherwise.

 

With the exception that when you turn it into a bonus, you are paying it in cash at signing. Even if you cut him the next day, that money must be put on the cap. Whereas if it was unguaranteed base salary and you cut the guy the next day, you owe nothing.

 

That's why you only do these deals with guys you're sure will be on the team.

 

Edited March 19, 2022 by Thurman#1

[Thurman#1]

22 minutes ago, MAJBobby said:

Go look at JAX guaranteed Money spent so far it is approaching 200M. (Essentially cash). They will be on the hook for 200M in guaranteed money this year. Plus the salaries. That are coming in the season. So when you add guarantees and the signing bonuses and base salaries they are well well above the CAP this year. But hundreds of Millions. 

 

 

Can you be more specific? What are you talking about? Can you give me a link to where you got this figure?

[stuvian]

as real as the government's rate of inflation

[Thurman#1]

If you are talking about the $155.25M in guarantees for the new FAs, those guarantees will be paid in cash over the next two or three years. They're not all cash this year.

 

Christian Kirk, for example, got $37M guaranteed at signing. That will NOT all be in cash this year. Some will, some not.

 

This year in cash he will get $20M signing bonus, $1.5M base salary guaranteed, a $500K roster bonus and a $500K workout bonus. $22.5M cash.

 

Next year's salary is also guaranteed, $15.5M. But he will not receive the cash till next year. Cap hit for team will also be next year.

 

So far, Jax has signed up to spend $205.3 M in cash next year.

 

Go to the link, then click the menu that says "salary cap" and then change it to "cash"

 

https://www.spotrac.com/nfl/jacksonville-jaguars/cap/

 

Kirk is on there for $22.5M in cash.

Edited March 19, 2022 by Thurman#1

[Matt_In_NH]

1 hour ago, MAJBobby said:

Go look at JAX guaranteed Money spent so far it is approaching 200M. (Essentially cash). They will be on the hook for 200M in guaranteed money this year. Plus the salaries. That are coming in the season. So when you add guarantees and the signing bonuses and base salaries they are well well above the CAP this year. But hundreds of Millions. 
 

 

What about Rogers and Packer and Adams. 
 

it was never about money. Adams told GB he will never play on the Tag. It was more about the relationship between player and team than it was the cap

So why didn’t they give him the contract the raiders did if the cap is not real?  It’s a business with constraints. 

[stevestojan]

This explains is pretty well: 

 

 

[Thurman#1]

6 hours ago, Giuseppe Tognarelli said:

But doesn't the conversion create cap space that is then used to pay other players? This is the money I'm referring to that they wouldn't have to pay otherwise. Instead of paying just the full cap, they're now paying bonuses + the full cap

 

 

 

Meet Larsson Larssonsson, TE out of Iowa.

 

He's now a Viking. His current contract has him owed $40M over the next four years, $10M each in 2022, 2023, 2024 and 2025. All unguaranteed base salary, for simplicity. 

 

His cash equals his cap hit, $10M etc year.

 

The Vikes need cap spaces they approach him for one of these deals. They say, "Larsson, lay off the lutefisk and listen up. How about we convert $8M of your 2022 base salary into a signing bonus to help us with the cap?"

 

Larsson's agent says, "Hey, no downside, Larsson, do it." Larsson walks out the door with a check for $8M in his pocket, and heads for the smorgasbord to celebrate. Done deal. The Vikes hold a PC and say, "Yeah, we're real cap wizards, we've created $6M of extra space to sign a guy." The reporters pile on the hosannas and the fans lay garlands before them in the street.

 

So what happened?

 

In terms of cash, absolutely nothing. The Vikes gave him $8M in cash, and he'll get the remainder of his salary, $2M, week by week through the 17 games of the season. Larsson's 2022 cash total is still unchanged and of course the Vikes 2022cash also unchanged, $10M to Larsson.

 

But the Vikes cap for 2022 has $6M more space. Where did it come from?

 

Larsson has a 4-year contract. When you sign a signing bonus, the bonus is evenly divided into as many pieces as there are years on the contract, in this case, four. (Boring detail: it can't be divided into six or moe, even if the contract is six years or longer. Five max.) But Larsson has four years, so it's four equal pieces of $2M each.

 

And each of those little teeny $2M chunks is applied to each year of the contract.

 

So the original cap structure was:

 

2022 $10M

2023 $10M

2024 $10M

2025 $10M

 Total: a cap hit of $40M

 

The new cap structure looks like this:

 

2022 $4M ($2M salary and 25% of the amortized bonus)

2023 $12M ($10M base salary and 25% of the amortized bonus)

2024 $10M ($10M base salary and 25% of the amortized bonus)

2025 $10M ($10M base salary and 25% of the amortized bonus)

 Total: a cap hit of $40M

 

Larsson's cap hit over the whole four-year contract is the same $40M. The cap hit has not been changed one iota, it's only been delayed.

 

Money moved from the 2022 cap to the 2023 cap = $2M

Money moved from the 2022 cap to the 2024 cap = $2M

Money moved from the 2022 cap to the 2025 cap = $2M

 

Money "created" = zero

 

 

 

 

 

Edited March 19, 2022 by Thurman#1