[SmootSmack]

Originally Posted by 44ever

How does that work (cap credits)?

The National Football Post | Monday Money Matters

Another way leftover Cap room is soaked up is through earned incentives. Without getting too technical, NFL teams go through a “netting process” at the end of the season where unearned LTBE (Likely To Be Earned) incentives are netted out against earned NLTBE (Not Likely To Be Earned) incentives, creating a debit or credit toward the 2009 Salary Cap. Some teams are more incentive-oriented than others. At the Packers, I did not negotiate many incentive-laden deals unless they were for players coming off injuries, as experience showed that incentive-laden deals tend to lead players toward selfish rather than team-based goals.



Finally, the most common way of using up leftover Cap room at the end of the season is through a somewhat silly but allowable mechanism of phony incentives. By including a new incentive in a renegotiated contract at the end of the season, the incentive is by rule considered LTBE, thereby immediately counting against the Cap. Thus, when the incentive is not earned, and it never is, the money is then credited toward the next year’s cap, resulting in the double benefit of using up current Cap room and crediting new Cap room toward the next year.



As to how the above works, consider the following: A team will approach its third-string quarterback with one game left in the season and negotiate a clause that gives the player $5M for throwing 6 touchdown passes during the season. The $5M comes off the existing Cap, and when unearned, credits against the coming Cap.



I did this a couple of times with Craig Nall, bless his heart — although I had a couple heart palpitations one year when we wrapped up a playoff berth moments before our last game against the Bears, making it entirely meaningless. Brett Favre only played a series or two, then Doug Pederson played the rest of the half. Then, to my surprise, Craig was to play the entire second half. After he threw a touchdown, I laughed. If he had thrown another, I would have started to worry a bit. If he had thrown a third, I may have come down to the sideline and pulled him out of the game myself!