Cooley Restructures

[SmootSmack]

FOX Sports on MSN - NFL - 'Skins rework Cooley deal to save cap space

FOXSports.com has learned Washington converted an $11 million roster bonus Cooley was scheduled to receive into guaranteed money. The move is believed to have lowered Cooley's 2008 cap number from a team-high $12.2 million to $4.4 million.

[hooskins]

Thats 8mil right there, and expect more of this to come. Are people still worried about cap hell?

[Monkeydad]

Originally Posted by hooskins

Thats 8mil right there, and expect more of this to come. Are people still worried about cap hell?

With Dan Snyder taking care of the cash, we're NEVER in cap trouble.

Thanks Cooley, for being a team guy.

[dmek25]

Originally Posted by Buster

With Dan Snyder taking care of the cash, we're NEVER in cap trouble.

Thanks Cooley, for being a team guy.

why i agree with Cooley being a team guy, this kind of move doesn't really mean that. all it means is that Cooley's money is guaranteed. not a whole lot of guaranteed money in the nfl

[BrunellMVP?]

Originally Posted by Buster

With Dan Snyder taking care of the cash, we're NEVER in cap trouble.

Thanks Cooley, for being a team guy.

what's "team" about getting more money guaranteed?

[Ruhskins]

Originally Posted by BrunellMVP?

what's "team" about getting more money guaranteed?

Changing his contract to get under the cap so the team can get more players. I know it's no sacrifice or anything like that, but not all players do it.

[CrazyCanuck]

I just updated the cap sheets. Matty will post them in the next day or two when he's done locking duplicate threads.

I included the restructures of Thomas, ARE, and Carter. I've already accounted for Cooley's restructure but my numbers may be slightly off.

I have us at $8.75M in the red, but I still have Brunell on the roster and cutting him will save about $3.5M, bringing us to about $5.25M over the 2008 cap.

We can still restructure about $25M in salary and another $5M in roster bonuses, so I think it's safe to say we are not in cap hell for 2008.

In fact... bring on free agency.

[Monkeydad]

Originally Posted by Ruhskins

Changing his contract to get under the cap so the team can get more players. I know it's no sacrifice or anything like that, but not all players do it.

Exactly. I don't understand why it's so hard to figure out.

He's helping the team out, not just himself.

[JoeRedskin]

Originally Posted by Ruhskins

Changing his contract to get under the cap so the team can get more players. I know it's no sacrifice or anything like that, but not all players do it.

Originally Posted by Buster

Exactly. I don't understand why it's so hard to figure out.

He's helping the team out, not just himself.

Actually, it was probably written into the contract that it could be converted at the team's option. It's just one way that the Skins massage the cap. As a roster bonus, it's a one time hit and, if the team wants to absorb it in the bonus year, it stays a roster bonus. On the other hand, if the team wants to increase flexibility under the cap, they can (again - at their option) turn it into a signing bonus and spread it over the remaining course of the contract.

Not saying Cooley's not a good guy, just saying he probably had no say in it. In fact, he may even have pumped the club for money when originally signed. "Fine - you want to make it a optional signing/roster bonus next year rather than more up front money today (when he originally signed the contract), that's fine but it's gonna cost you an extra million next year."

Again, not saying that he did, just suggesting that, perhaps, he had a financial benefit from writing his contract a certain way. Win-Win's are how contracts get done.

[Dirtbag59]

Originally Posted by hooskins

Thats 8mil right there, and expect more of this to come. Are people still worried about cap hell?

When is Cap Hell going to frezze over? I hear about it every year and it never seems to happen.

[itvnetop]

So if I understand this correctly, an owner has the option to slash salary cap by converting cap money into guaranteed up front? If this is the case, what's the point of a salary cap? Not that I'm complaining (since this helps us) but theoretically, the cap can be loopholed as deep as an owner's pockets go... correct? I wonder why more owners don't do this... I guess Danny boy is just too rich to even care about parting with guaranteed money.

[Longtimefan]

Originally Posted by itvnetop

So if I understand this correctly, an owner has the option to slash salary cap by converting cap money into guaranteed up front? If this is the case, what's the point of a salary cap? Not that I'm complaining (since this helps us) but theoretically, the cap can be loopholed as deep as an owner's pockets go... correct? I wonder why more owners don't do this... I guess Danny boy is just too rich to even care about parting with guaranteed money.

For the reasons you state, should we be happy to have an owner like Dan Snyder, or would you rather John Cooke had bought the team?

For the sake of some owners, I'm sure they're most happy there is a salry cap because if there weren't Dan Snyder would really show them what he could do with his money. He'd field an all star team at every position from top to bottom.

[Slingin Sammy 33]

Originally Posted by itvnetop

So if I understand this correctly, an owner has the option to slash salary cap by converting cap money into guaranteed up front? If this is the case, what's the point of a salary cap? Not that I'm complaining (since this helps us) but theoretically, the cap can be loopholed as deep as an owner's pockets go... correct? I wonder why more owners don't do this... I guess Danny boy is just too rich to even care about parting with guaranteed money.

Sort of.....NFL contracts are not guaranteed. The only guarantee is the signing bonus and the current year's salary. What a restructure does is "guarantee" (by paying the player up front) money that would have been due in later years of his contract. However if the player is released or traded this "guaranteed" money must be accounted for against the next year's salary cap. This is the "dead cap" cost or release fee.

What it boils down to is; if you have confidence the team will not be releasing the player and he is a solid performer a restructure is a good strategy. Where it kills you is if you pay a large signing bonus or restructure a player and he gets injured or his production declines (Brandon Lloyd, Arch last year) and you want to get rid of the player the cost against that year's salary cap hurts you. For example to release Brandon Lloyd it will cost about $ 7M against the 2008 cap. He'll be gone but the guaranteed money he was paid has to be accounted for in the salary cap.

I may be off on a couple of details but that is pretty much how it works. Schneed & Crazy Canuck do some great work on salary cap info. If you search the site there is a link to our current salary cap sheets.

[Schneed10]

Originally Posted by itvnetop

So if I understand this correctly, an owner has the option to slash salary cap by converting cap money into guaranteed up front? If this is the case, what's the point of a salary cap? Not that I'm complaining (since this helps us) but theoretically, the cap can be loopholed as deep as an owner's pockets go... correct? I wonder why more owners don't do this... I guess Danny boy is just too rich to even care about parting with guaranteed money.

There's definitely a point to the cap, it's just not a straightforward cap on the amount of money you're paying players in a given season.

You can pay your players $120 million one year, and the cap can be $100 million, and it still be perfectly legal.

Signing bonuses get spread over the life of the contract. So if I give you $10 million to sign for a five year deal (congrats, you're rich), even though I'm paying you all $10 million of your bonus this year, I can spread it over the life of your contract, meaning that signing bonus counts for $2 million in each of your five years.

If you play three years and then I decide you suck and I cut you, then I still have two years worth of signing bonus to recognize on my cap books. I already recognized the first 3 years, but I've got to carry your last two years as dead cap.

But even though I'm carrying your deadcap bonus money, I don't have to pay you the base salary for this season (base salaries aren't guaranteed), so that's where the cap savings come from. If the cap savings on the base salaries are greater than the cap hit from the dead bonus money, then I'll save cap money by cutting you (Phillip Daniels, Todd Wade). If the dead bonus money is greater than the savings on base salary, I eat a cap hit on you (Brandon Lloyd).

So there's a cost to handing out big bonuses. If the player ends up sucking (Lloyd), it's tough to get rid of him without crippling your cap. You usually need to let the guy play halfway through his contract or so before it becomes feasible to cut him.

[Paintrain]

So wait, teams can restructure contracts and reduce cap numbers so there's no need to cry from the mountaintops that we're $20 million over the cap in the previous November? Does Peter King know about this?