Quote:
|
Originally Posted by CrazyCanuck
I find that Snyder has really moved away from big roster bonuses and is using more and more option bonuses. Option bonuses get prorated, roster bonuses do not. One reason might be that he's sick of restructuring 10 contracts every offseason.
|
I think you're probably right about the shift towards using option bonuses. Thinking about it from a team salary cap perspective, an option bonus still allows the Redskins to prorate the payment over 5 years of the contract, just like an up-front signing bonus would. And then from a business perspective, using the option bonus helps Snyder's cash flow as he's not forced to pay out the entire signing bonus in lump sum. He can pay some of it up front in lump sum, but put off the remaining payment until later. This allows him to keep some extra cash on hand, which he can plow back into the business to earn a return on new capital investments, or just sock that cash into investment accounts that earn interest. Then when the option bonus comes due, he can pay it up at that point, and be better off financially than he would have been if he paid the entire bonus up front in a lump-sum.
Smart business man, that Dan Snyder.