The Dark Side of Cash to Cap - Why it might not work long term

[Ebenezer]

For a couple of days now Clump and I have been telling you that Cash to Cap might not be a bad thing for teams because it doesn't mortgage the cap future.

However, there is a downside. It make the salary cap a "Hard Cap". The way things are now teams can really spend as much money as they want if they figure out a way to spread the money out so that it all fits. We "Cash to Cap" the money available is ALL the money that is available. Like Clump said it will make the Bills picky when it comes to talent evaluation. However, it might be worse than that.

While it might be attractive for a player to sign a deal like this on the promise that if a team keeps it's future cap clear it can get more players there is a deep dark side. If many teams start employing "Cash to Cap" economics then there isn't as much money for teams to spend and agents will get wise quickly and not want contracts like this. A move like this will save teams huge amounts of money...monies the agents nor the union want to lose control over...it would mean the end of very huge contracts and restrict movement of players over long term depending on how many teams employed it.

[YardRat]

Re: The Dark Side of Cash to Cap - Why it might not work long term

The 'Dark Side' is the fact that there will always be owners with deep pockets who are willing to 'outbid' the cash to the cap teams by giving more money up front because they are able to spread the bonus out over several years, and the players will take the larger of the lump sums offered.

If RW offers Steinbach a 10mil roster bonus, Snyder or Jones will give him 15mil.

[ZacGriffi~82]

Re: The Dark Side of Cash to Cap - Why it might not work long term

Yeah, i'm not to worried about that.

[Statman]

Re: The Dark Side of Cash to Cap - Why it might not work long term

The 'Dark Side' is the fact that there will always be owners with deep pockets who are willing to 'outbid' the cash to the cap teams by giving more money up front because they are able to spread the bonus out over several years, and the players will take the larger of the lump sums offered.

If RW offers Steinbach a 10mil roster bonus, Snyder or Jones will give him 15mil.

The bottom line is that every dollar paid a player must be counted against the cap somewhere, sometime, some year.

If teams draft well, and pick up solid free agents, then the likelihood that they'll see top value for their cap and real money goes up drastically.

If teams suck at talent evaluation, then cash to cap is handy. It does restrict teams as Eb suggests. That much is common sense. Which player won't go for the guaranteed signing bonus over the annuity type roster bonuses if both are offered. Only a moron wouldn't.

But, and IMO, the Bills have had to resort to this nonsense due to player signings such as Vincent, Tripplett, and draftees such as Mike Williams who all got far greater signing bonuses than they deserved, not because the market commanded it, but because the Bills talent evaluation sucks so bad that they pay players like that far more than they're worth in signinig bonus which comes back to merely waste cap space and provide players that simply are not playing up to the money they received.

Marv brought on a bunch of them last year in free agency. Price, Tripplett, Royal, Fowler, all could have been gotten for less or even better players for the same if they were available.

This entire thing is the sign of a poor personnel staff and the team having to compensate for it by limiting their options in that way. It's nothing more. They will be at a disadvantage this offseason as a result. Future ones too.

Make no mistake however, it's not necessary for teams that have tight personnel departments.

[G. Host]

Re: The Dark Side of Cash to Cap - Why it might not work long term

What has happened is similar to in US economy - you have deficit hawks and doves.

• The doves (i.e. Jones, Snyder) never worry about the deficit because they say the economy (NFL cap and TV revenue) is ever increasing.
• The hawks (Wilson) are saying costs are out of control and they need to spend what they are getting not mortgaging the future.

The reality is somewhere between like Pittsburgh and Indy did keeping costs under control and dipping into rainy day funds only for special players on renewals who were already signed to team (known strengths and weaknesses) and we do not have any of those players yet - Nate's weaknesses are too severe and none of the current players yet qualify including most of the Zoners golden boy.

[Mahdi]

Re: The Dark Side of Cash to Cap - Why it might not work long term

The 'Dark Side' is the fact that there will always be owners with deep pockets who are willing to 'outbid' the cash to the cap teams by giving more money up front because they are able to spread the bonus out over several years, and the players will take the larger of the lump sums offered.

If RW offers Steinbach a 10mil roster bonus, Snyder or Jones will give him 15mil.

Right but is that 15 million guaranteed? With the bills that 10 million will be guaranteed and upfront which is more attractive. Correct me if im wrong cuz im not expert---- but if another team offers a signing bonus of 15 million over a 5 year contract would that not be $3 million a season and not all guaranteed?
And teams cannot afford to hand out $15 million dollar roster bonus' upfront--- that would eat up most of their cap. The Bills are doing this in anticipation of targeting specific players.

[Elminster]

Re: The Dark Side of Cash to Cap - Why it might not work long term

On the other side, bumbles also brought up what would happen if the current CBA gets axed in '09 i.e. all signing bonuses past the last capped season would be accelerated into '09(or '10), which would be ruinous if we gave our bonuses like Snyder does...

[YardRat]

Re: The Dark Side of Cash to Cap - Why it might not work long term

Right but is that 15 million guaranteed? With the bills that 10 million will be guaranteed and upfront which is more attractive. Correct me if im wrong cuz im not expert---- but if another team offers a signing bonus of 15 million over a 5 year contract would that not be $3 million a season and not all guaranteed?
And teams cannot afford to hand out $15 million dollar roster bonus' upfront--- that would eat up most of their cap. The Bills are doing this in anticipation of targeting specific players.

A signing bonus and a roster bonus (if designated in the first year, anyway) are both guaranteed money up front, and the player gets the full amount at one time regardless of what it's called. The difference is simply how it's accounted for. Roster bonuses get fully applied to the cap in the year they're earned, signing bonuses are allowed to be spread out over a maximum six-year period for accounting purposes only. (It might be seven with the new CBA, I'd have to verify that)

A fifteen mil signing bonus over a five year contract DOES NOT mean that the player gets a 3mil $ check every year for five years...he gets the 15mil in one lump sum.

[TigerJ]

Re: The Dark Side of Cash to Cap - Why it might not work long term

Let's say the Marv Levy and Tom Modrak arrive at the conclusion that to give the team a good shot of making a deep run in the playoffs and perhaps winning he Super Bowl, they need in free agency a top flight guard, and middle linebacker, plus re-sign Nate Clements. If they employ big signing bonuses, they can do all three. If however they employ cash to cap discipline, they can only do one or two of those. So instead of going for it they shrug their shoulders and say, "Oh well, maybe next year we'll be in better shape."

[Ebenezer]

Re: The Dark Side of Cash to Cap - Why it might not work long term

Right but is that 15 million guaranteed? With the bills that 10 million will be guaranteed and upfront which is more attractive. Correct me if im wrong cuz im not expert---- but if another team offers a signing bonus of 15 million over a 5 year contract would that not be $3 million a season and not all guaranteed?
And teams cannot afford to hand out $15 million dollar roster bonus' upfront--- that would eat up most of their cap. The Bills are doing this in anticipation of targeting specific players.

Signing bonuses are guarenteed. Roster bonuses in the first and second year of a contract are all but guarenteed. Who signs a big name free agent only to cut them before they play a game for that team?

[Ebenezer]

Re: The Dark Side of Cash to Cap - Why it might not work long term

Let's say the Marv Levy and Tom Modrak arrive at the conclusion that to give the team a good shot of making a deep run in the playoffs and perhaps winning he Super Bowl, they need in free agency a top flight guard, and middle linebacker, plus re-sign Nate Clements. If they employ big signing bonuses, they can do all three. If however they employ cash to cap discipline, they can only do one or two of those. So instead of going for it they shrug their shoulders and say, "Oh well, maybe next year we'll be in better shape."

all depends on the player, the roster bonus and the perception of how far the team is away...you might land a player because you can convince him that by doing "cash to cap" you can get two or three or four players a year, EVERY YEAR, and keep them together longer...will it work? I don't know. This truly is an experiment.

[Mahdi]

Re: The Dark Side of Cash to Cap - Why it might not work long term

A signing bonus and a roster bonus (if designated in the first year, anyway) are both guaranteed money up front, and the player gets the full amount at one time regardless of what it's called. The difference is simply how it's accounted for. Roster bonuses get fully applied to the cap in the year they're earned, signing bonuses are allowed to be spread out over a maximum six-year period for accounting purposes only. (It might be seven with the new CBA, I'd have to verify that)

A fifteen mil signing bonus over a five year contract DOES NOT mean that the player gets a 3mil $ check every year for five years...he gets the 15mil in one lump sum.

Thanks for the explanation!

[YardRat]

Re: The Dark Side of Cash to Cap - Why it might not work long term

all depends on the player, the roster bonus and the perception of how far the team is away...you might land a player because you can convince him that by doing "cash to cap" you can get two or three or four players a year, EVERY YEAR, and keep them together longer...will it work? I don't know. This truly is an experiment.

The bottom line is still the size of the bonus being offered...The individual player is going to care more about the extra mil or two being put into his pocket than how the team is going to acccount for it on paper.

If bonus money is equal, it might work the way you described. If we're offering less up front money, we're going to get out-bid every time on top tier FA's.

And I don't really have a problem with that.

[Mahdi]

Re: The Dark Side of Cash to Cap - Why it might not work long term

The bottom line is still the size of the bonus being offered...The individual player is going to care more about the extra mil or two being put into his pocket than how the team is going to acccount for it on paper.

If bonus money is equal, it might work the way you described. If we're offering less up front money, we're going to get out-bid every time on top tier FA's.

And I don't really have a problem with that.

So basically Levy is trying to find a loophole in the economics of the NFL that will allow the Bills to overcome the salary cap and keep the team together longer and win championships.......

I dont like it! .................................................................................. (jk!)

[Mahdi]

Re: The Dark Side of Cash to Cap - Why it might not work long term

all depends on the player, the roster bonus and the perception of how far the team is away...you might land a player because you can convince him that by doing "cash to cap" you can get two or three or four players a year, EVERY YEAR, and keep them together longer...will it work? I don't know. This truly is an experiment.

So basically Levy is trying to find a loophole in the economics of the NFL that will allow the Bills to overcome the salary cap and keep the team together longer and win championships.......

I dont like it! .................................................................................. (jk!)