Former Green Bay exec Andrew Brandt: "The salary cap is just accounting"

[Shaw66]

19 minutes ago, FilthyBeast said:

 

Agree but it's more of the exception and not the rule, especially because of Brady being the GOAT in the Pats case. He covered up for a lot of deficiencies and questionable draft picks through the years.

 

In the case of the Steelers they have always been among the top drafting teams especially the guys they find on defense which helps offset all the big names they pass on resigning through the years. The cupboard has always been restocked so to speak.

Agreed.  But it's been years since we have seen teams with established QBs  in real cap trouble.  In part, if you dont have to keep spending to try a new QB, you can manage your cap at the other positions. 

[Rew]

People who think cap management is about "kicking the can down the road" as a debt are usually missing the objective.  The strategy isn't at all similar to a using a credit card as personal debt.  You have to look at the cap as the real currency you are spending, and ignore the dollars.  That is the point, with sufficient cash reserves you can ignore what you are "spending" and optimize your consumption of the cap to get an advantage over the competition.  You actually prepay.

 

In a growing cap situation (which has been the default for awhile and will continue for the near future at least) you can take advantage of the cap.  Imagine that you structure all deals so that the cap hit for what you are paying this year is recognized next year.  This isn't a growing debt "that will catch up with you".  You can conceivably do this indefinitely.  Next year the cap is expected to be 10-11% more than this year.  If you regularly structure cap hits like this you will be able to spend 10% more than a competing team with "this year" contracts.  You gain the ability to pay more than the competition. 

 

In theory you could push this out years or decades in the future.  The balancing factor is that the further you push it out the more cash ownership has to commit up front.  Ultimately, if you committed the cash too early and need to move in from a player you have dead cap.  It doesn't matter that it's money wasted, it's cap that is wasted. This ends up restricting decision making.  Secondly, you can't push dead money back, and you can't restructure dead money.  Dead cap reduces the efficiency of what you spent on the cap as well as reducing flexibility to optimize the cap.  If you make commitments too long the dead cap will end up canceling out the advantage you had by spending future cap.  This ends up as a balancing act for gms to structure deals where the cap hit is as far out as possible, while still watching owner's cash flow, and not creating undue dead cap.  This is why it's not a debt styled payment deferral.  The act of pushing back the cap hit has a risk element associated with it that you will end up treating that as a loss.

 

If the concepts are too abstract, just go look at cash spent or contract summed AAV.  On average, teams are spending 10-20% more than the salary cap.  Check this every year and you will see that teams are averaging spending based on the cap in 1-2 years.  The ones that are too agressive (regularly 3+ years out) are the ones that have cyclical good/rebuild performance.  The ones in the top half consistently are playoff contenders.  The ones that spend below or to this year's cap regularly are pretenders or bottom dwellers.  

 

TLDR: Cap is real.  Cap is a soft cap.  Owners with strong cash flow and willingness to outspend competition have a competitive advantage if they have the right management spending the cap on the right talent to leverage the soft cap.

[Buffalo_Stampede]

58 minutes ago, Rew said:

People who think cap management is about "kicking the can down the road" as a debt are usually missing the objective.  The strategy isn't at all similar to a using a credit card as personal debt.  You have to look at the cap as the real currency you are spending, and ignore the dollars.  That is the point, with sufficient cash reserves you can ignore what you are "spending" and optimize your consumption of the cap to get an advantage over the competition.  You actually prepay.

 

In a growing cap situation (which has been the default for awhile and will continue for the near future at least) you can take advantage of the cap.  Imagine that you structure all deals so that the cap hit for what you are paying this year is recognized next year.  This isn't a growing debt "that will catch up with you".  You can conceivably do this indefinitely.  Next year the cap is expected to be 10-11% more than this year.  If you regularly structure cap hits like this you will be able to spend 10% more than a competing team with "this year" contracts.  You gain the ability to pay more than the competition. 

 

In theory you could push this out years or decades in the future.  The balancing factor is that the further you push it out the more cash ownership has to commit up front.  Ultimately, if you committed the cash too early and need to move in from a player you have dead cap.  It doesn't matter that it's money wasted, it's cap that is wasted. This ends up restricting decision making.  Secondly, you can't push dead money back, and you can't restructure dead money.  Dead cap reduces the efficiency of what you spent on the cap as well as reducing flexibility to optimize the cap.  If you make commitments too long the dead cap will end up canceling out the advantage you had by spending future cap.  This ends up as a balancing act for gms to structure deals where the cap hit is as far out as possible, while still watching owner's cash flow, and not creating undue dead cap.  This is why it's not a debt styled payment deferral.  The act of pushing back the cap hit has a risk element associated with it that you will end up treating that as a loss.

 

If the concepts are too abstract, just go look at cash spent or contract summed AAV.  On average, teams are spending 10-20% more than the salary cap.  Check this every year and you will see that teams are averaging spending based on the cap in 1-2 years.  The ones that are too agressive (regularly 3+ years out) are the ones that have cyclical good/rebuild performance.  The ones in the top half consistently are playoff contenders.  The ones that spend below or to this year's cap regularly are pretenders or bottom dwellers.  

 

TLDR: Cap is real.  Cap is a soft cap.  Owners with strong cash flow and willingness to outspend competition have a competitive advantage if they have the right management spending the cap on the right talent to leverage the soft cap.

One thing, dead cap isn’t wasted cap. It’s the debt you owe. You pushed cap into the future to create more cap now, that’s the dead cap.

[Richard Noggin]

17 hours ago, GunnerBill said:

I have been saying it for years, but I think Andrew Brandt, who was the salary cap guru in Green Bay for a time jointed the Pat McAfee show yesterday to talk salary cap, specifically with the Rams moves and I think this is before the Kupp deal dropped. He does a really excellent job of explaining how so long as you have cash rich owners willing to spend up front the NFL salary cap is not the restriction people think. It's an accounting cap that should not stop good and smart teams from signing players so long as revenues continue to increase.

 

 

 

Remember folks - the salary cap is just accounting. 

 

It's all true, this oversimplification, it's all true IF IF IF you don't move on from players on big bonus-heavy deals who have more than one season remaining. That proration does sting when guys don't play out their deals until at least the penultimate season. Eating one year of spread-out bonus happens all the time. But eating two or even three years, combined with other cap constraints, can eat up the available "accounting" in ways that often require tough decisions, and/or necessitate continued back-loading of deals. A team can kick-the-can on smart deals without worry (although the randomness of NFL injuries adds uncertainty even here).

 

Weren't the Saints mentioned as an example of how this does NOT catch up to orgs? Haven't they had to take some personnel lumps in order to correct the books a bit? (Of course combining such tough decisions WITH the *ahem unrelated losses of HC and QB makes it seem inevitable.)

[Richard Noggin]

Above all, though, for me, is the embarrassing reminder of how the Bills were doing business towards the end of Ralph Wilson's ownership: instead of Cash ABOVE Cap as discussed in this interview, the Bills were openly utilizing Cash TO Cap accounting. That's a SEISMIC competitive self-handicapping. Like it only becomes FULLY apparent in light of more contemporary cap management strategies just HOW disadvantageous such a practice was. Holy heck. 

[Sierra Foothills]

13 hours ago, Utah John said:

This has been going on in one form or another for 30 years or more.  When the Bills were in the Super Bowl, Dallas was making money hand over fist, and Jerry Jones used that cash to restructure contracts so the Cowboys could afford a lot more in terms of payroll.  Polian and Butler were as smart as they come, but Ralph Wilson and his bean counter (whose name I have finally forgotten, thankfully, so please don't remind me, but you know who I'm talking about) would not play the game the way Jones did. 

 

🤣

 

J _ _ _ _ E _

 

 _ I _ _ _ A _

 

 

12 hours ago, frostbitmic said:

Next thing they'll be telling us is that ice is cold.

 

Seems like you have ice on the brain. Do you live in an igloo?

 

 

 

[machine gun kelly]

16 hours ago, Utah John said:

This has been going on in one form or another for 30 years or more.  When the Bills were in the Super Bowl, Dallas was making money hand over fist, and Jerry Jones used that cash to restructure contracts so the Cowboys could afford a lot more in terms of payroll.  Polian and Butler were as smart as they come, but Ralph Wilson and his bean counter (whose name I have finally forgotten, thankfully, so please don't remind me, but you know who I'm talking about) would not play the game the way Jones did.  So in the end the Bills couldn't quite keep up in terms of personnel.  They lost some primo FAs during their glory years that would have helped a lot in their last two SBs.  

The Titans have figured out that in a pass-heavy league, a team that can run the ball really well will be a team that other defenses aren't prepared to stop.  The Titans and Colts were the two teams that could go heavy and really give the Bills a tough time last year.  This strategy lets teams win a lot of games in the regular season, but then struggle in the playoffs.  The Titans are just sticking with their philosophy, and not paying a lot for talent that doesn't fit in.  If the Titans had a great QB they'd have held onto Brown, but they see what Tannahill can and can't do, and they're making reasonable decisions based on his limitations.

John, I think that guy’s name was Littman.  Maybe Jeffrey.  I remember Vic telling this story which is why Polian left per Vic who co authored a couple of books with Polian.  They are close so I trust his comments.  Everything you said is accurate so well done on all points.

[colin]

17 hours ago, Shaw66 said:

Thanks for starting this thread.  It's interesting. 

 

I think it was more than a narrative.   As people have said here, the best teams manage the cap by relying on cap inflation - they can pay with cheaper cap dollars in the future.  But that rule doesn't apply when you have a collection of players with big contracts whom you no longer want.   It doesn't apply, because in cap terms you can't use time to your advantage - you have to pay with present cap dollars.  

 

So, the GM has two choices:  Either you manage to a soft landing, so to speak, over three or four years, or you take the hit more or less all at once.   Neither is ideal for team building.   Beane told us at the time they decided to take the hit and get past it as fast as they could.   Essentially, they made a decision about how they wanted to go about the rebuild, which was build from the ground up.  Once that decision was made, they didn't have a choice.  

 

key point in all of this here: cap expansion makes the cap (not cash) cost of players much lower if you pay upfront and pro rate, or even back load contracts (that was popular back in the original days of the cap, but not as popular now).

 

on the other point: it's all about when a player falls off due to age/wear and tear, or if there are locker room or other kind of considerations that make you want to move on.  If you have a young buck coming up on a rookie contract who is not quite yet as good as who he is replacing, you might accelerate the young guy's career and let the older guy walk if it's a big contract year, just because you don't want older guy on a contract w pro ration (so moving on from him will zap your cap) when he's not the best guy/starter for that position once the younger guy accends.

 

you also have locker room and "ethics" (tbh, i think 90% of nfl teams view getting caught as the ethical issue, not the act itself) reasons why you might want to move on from someone.  those reasons make it important to really evaluate who you throw the giant potentially back breaking contracts at.

 

this last paragraph above, i think that's where the Rams are tops and have beaten out teams like new orleans who love to throw cash over cap around: the rams hand balloon contracts to players who continue to perform.  Goff was a miss, but he got the to a super bowl so over the life of his term w the team, i think that's a net positive.  they blew massive draft picks for the QB and top corner, but in their model they see both of those guys as legit game changers who make players around them better, and obv that's totally true w donald.

 

KC has done great too w a few ultra super stars and an army of jags around them, but them moving on from hill says something, either they were less than certain on him from an off the field perspective, or they just think he will start slowing down in the middle of the huge contract, and that it would hamstring them trying to sign other players later on.

[GunnerBill]

4 minutes ago, colin said:

 

 

KC has done great too w a few ultra super stars and an army of jags around them, but them moving on from hill says something, either they were less than certain on him from an off the field perspective, or they just think he will start slowing down in the middle of the huge contract, and that it would hamstring them trying to sign other players later on.

 

I think it was that myself. I think they knew it is the speed that makes Hill special. He is a good receiver when he slows but his elite trait is a physical one that wanes in time rather than, for example, a Stefon Diggs whose elite trait is his precision route running, that ages better. 

[BarleyNY]

22 hours ago, Florida Bills Fanatic said:

Every dollar paid to any player in any form eventually gets applied to the cap.  Teams push money into the future to take advantage of the annual growth of league revenue.  Owners with money can afford to make the necessary escrow deposits for bonuses and salary guarantees.  This all works as long as revenues continue grow, teams don't spend faster than the cap grows, and teams don't pay problem players (like Dareus) that lead to major dead money issues.

 

When players like Hill and AJ Brown are not retained by their teams, it is likely because their new contracts would have caused the team to spend at a rate that exceeded their forecast of available future cap money.  Good organizations operate within a structured salary plan.  You will see them deviate for short periods if they think that they are very close to winning a championship ( Tamp Bay, and Rams).  Eventually, their rate of spending has to be brought back on a sustainable trajectory or they release good players and end up in a "rebuild".  Beane has shown great ability to manage the team spending and pull the trigger on the Miller deal when the opportunity was there. 

Well stated.  I’d highlight the escrow comment.  Owners with cash to burn are the ones that can pay upfront cash or otherwise guarantee salary (that must be put into escrow at time of guarantee) have a big advantage over other owners when signing players, especially high dollar free agents.  The other important point is the part about every dollar being accounted for.  It’s accounting.  Cap hits can get manipulated and moved around within the rules, but the salary cap is still a restriction.  

[Captain Hindsight]

23 hours ago, Greg S said:

Every situation is different but there may be some truth to this. Didn't Beane say over and over the Bills weren't going to be major players in FA and then he went out and spent like a drunken sailor.

Sounds like my wife on a target run

[Robert Paulson]

On 6/9/2022 at 6:31 AM, Rew said:

There are many tools available to play with the cap, but they ultimately rely on two elements.

1. Structure contracts to ensure you have the flexibility to spend every cap dollar.  This typically means over committing but with flexibility to restructure or defer as needed.

2. Push cap hits out to later years.  With increasing annual caps, the guy you'd pay 5% of your cap this year only costs 3% of your cap in 3 years.  This is the finance and account aspect of it.  "Cap inflation" if you will.  

 

These two factor combined allow teams with sufficient cash to pay 10 or 20% more to players than teams which are conservative and don't take advantage of the full cap or expected cap increases.   The 2nd half of this only provides value in a rapidly increasing cap environment. At some point it should stabilize, bringing actual cap spend closer.

totally agree and I will add:

 

3. sign/extend the right players. can't have too many Star Lotulelei or Kyle Okposo contracts hanging around your neck for years

 

remember the glory days of 'cash to the cap'?

[GunnerBill]

34 minutes ago, Robert Paulson said:

totally agree and I will add:

 

3. sign/extend the right players. can't have too many Star Lotulelei or Kyle Okposo contracts hanging around your neck for years

 

remember the glory days of 'cash to the cap'?

 

Indeed. So long as you have a wealthy owner willing to spend cash up front, then the salary cap is a minimal restriction. What is always a restriction is bad talent evaluation. 

[Paup 1995MVP]

On 6/9/2022 at 12:32 PM, Utah John said:

This has been going on in one form or another for 30 years or more.  When the Bills were in the Super Bowl, Dallas was making money hand over fist, and Jerry Jones used that cash to restructure contracts so the Cowboys could afford a lot more in terms of payroll.  Polian and Butler were as smart as they come, but Ralph Wilson and his bean counter (whose name I have finally forgotten, thankfully, so please don't remind me, but you know who I'm talking about) would not play the game the way Jones did.  So in the end the Bills couldn't quite keep up in terms of personnel.  They lost some primo FAs during their glory years that would have helped a lot in their last two SBs.  

The Titans have figured out that in a pass-heavy league, a team that can run the ball really well will be a team that other defenses aren't prepared to stop.  The Titans and Colts were the two teams that could go heavy and really give the Bills a tough time last year.  This strategy lets teams win a lot of games in the regular season, but then struggle in the playoffs.  The Titans are just sticking with their philosophy, and not paying a lot for talent that doesn't fit in.  If the Titans had a great QB they'd have held onto Brown, but they see what Tannahill can and can't do, and they're making reasonable decisions based on his limitations.

That is an excellent assessment Utah John.  Are you a University of Utah fan?  I love the way Kyle Whittingham runs that team.  He doesn't get a lot of 4 and 5 star recruits.  But he can coach up lesser players, and they are always prepared and play hard.  

[Utah John]

On 6/10/2022 at 9:58 AM, Paup 1995MVP said:

That is an excellent assessment Utah John.  Are you a University of Utah fan?  I love the way Kyle Whittingham runs that team.  He doesn't get a lot of 4 and 5 star recruits.  But he can coach up lesser players, and they are always prepared and play hard.  

Yes I am a huge Ute fan although we moved away from Salt Lake City four years ago.  I think Whittingham is one of the best coaches in college football, and he's starting to get some of those top recruits.  There are now quite a few Utes in the NFL.  

[cba fan]

On 6/9/2022 at 8:06 AM, 2020 Our Year For Sure said:

Since it relies on ever-increasing investment from ownership, do the Bills who pull in relatively little revenue each year compared to other teams ever reach a point where ownership has to pull back? Or with revenue sharing are we good forever?

as long as you have a very rich owner willing to lay out money early for sign bonuses then it can continue forever.

 

At some point you would think a smart NFL would have two salary caps running concurrently.

1. for salary allocated to the cap as we have now.

2. a limit on total cash outlays allowed per year regardless of it counts on current year cap. Look at spotrak and you see sal yearly cap money on a contract and then the total cash outlays by team on that contract also. Big difference in many cases. (FYI: Wilson tried to implement this and held Bills franchise to this thinking. Calling it Cash To Cap. Hindered Bills and resulted in the drought)

 

ex 2. to explain this would limit teams from giving multiple, large sign bonus sucking in FA's like flys on ice cream contracts per year. 

This would close the competitive gap between super rich owners teams with big revenue and smaller capitalized owners and smaller team revenue. 

 

Of course as NFL seems to want to sell all teams up for sale now to multi billionaires this may never happen and instead the less rich owners will be pushed out.

Edited June 12, 2022 by cba fan

[Paup 1995MVP]

On 6/12/2022 at 3:31 AM, Utah John said:

Yes I am a huge Ute fan although we moved away from Salt Lake City four years ago.  I think Whittingham is one of the best coaches in college football, and he's starting to get some of those top recruits.  There are now quite a few Utes in the NFL.  

Good for you.  I like them even though I am a Michigan man.  And live in the South.  Your QB with the long mullet has good wheels. 

 

It should be fun to watch Utah play USC with Lincoln Riley at the helm.  My son plays at Georgia Southern with the old USC coach Clay Helton.  He likes him quite a bit.  He would have liked to play for Whittingham too.  

[Mr. WEO]

[Matt_In_NH]

Yesterday brought some clarity to this thread.   The cap is not fake but it soft and can be manipulated to a point.   But it is real not fake.   As polian says.  The cap does not forget and does not forgive.  

[Ya Digg?]

22 minutes ago, Matt_In_NH said:

Yesterday brought some clarity to this thread.   The cap is not fake but it soft and can be manipulated to a point.   But it is real not fake.   As polian says.  The cap does not forget and does not forgive.  

Yes and no. I’m definitely someone who feels you can manipulate the cap for as long as a team wants. Does a team eventually have to pay for it of course, but teams can always do things if there is a player they want to sign or keep players they want to keep. Every move the Bills made yesterday can be justified outside of cap savings. If they wanted to keep all of those guys they could have, but having some time to digest what happened those were all smart business and football decisions