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Originally Posted by redskinsskickazz
hey canuck maybe you can help me with this cause ive always been confused i hear all the time that a team cant trade someone because of the massive cap hit they would take does that meen the team getting the player takes little to no cap hit in getting him if so wouldnt that raise coles value the team getting him would get a great player at very little cap cost i meen if i could get coles under contract for the next five years and not have to count his signing bonus against my cap i would probably give up a little more (oh by the way i failed english miserably so i apolagize for the run on sentence)
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Essentially, you have to take a cap hit for whatever you pay a player. So, if you have a guy on your team, and you pay him his annual salary, you take that as a hit on your cap. If you trade a guy though, you're not paying his annual salary anymore, so you don't have to take that as a hit.
Signing bonuses are different though. If you give a guy a $10 million signing bonus on a 5-year contract, you don't have to take all $10 million of that against your cap in the first year. You can divide it up evenly over the life of the contract. So if the signing bonus is $10 million on a 5-year deal, you take $2 million against the cap each year.
If a player is traded after only one year of that contract, he still has 4 years left. And since you only counted $2 million of the signing bonus in year 1, you still have the other $8 million to go. Since you paid him the signing bonus, you have to take the remaining hit for it if you trade him. That means trading him after year 1 of the contract hits you with the remaining $8 million in year 2.
So if we trade Coles, the Jets will pay him his annual salary, so we can wipe that part off of our books. But since we paid him that $13 million bonus, and he has only played 2 years with us, we still have $9.28 million of it left to hit our cap this year.
The NFL has set up this system to reward teams for getting good value for their money from players, to prevent teams from overpaying for players and driving up player salaries. Without this system, you'd see a situation like in Baseball, where the Yanks & Red Sox sign everyone under the sun, while the Royals and Devil Rays can't afford anybody. Or worse, this could be the NHL, and player salaries could climb so high that teams would go bankrupt by trying to pay them, leading to labor strikes. The NFL system is the best in the sports world.