Salary Cap: Fact vs Fiction

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Snake
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Salary Cap: Fact vs Fiction

Post by Snake »

This related to a conversation @Bootz and I were having about Burrow's inevitable contract extension, and the notion of Mahomes taking a team-friendly deal. I posted two of the three myths from the article here. Worth clicking for the last one, give SI.com some traffic.

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Myth No. 1: Cap matters as much as, or even more than, cash

No.

Let’s make this very simple: Cash is real money; cap is simply accounting.

Cash is what a player will actually receive in a contract. Cap is a mechanism of compliance, a way NFL teams account for a contract over the life of the deal.

And through the NFL’s systematic magic of signing and option bonus proration—spreading out the cap impact of bonuses over the term of the deal—cap can be adjusted to provide short-term gain for long-term pain.

In analyzing a player contract or a team payroll, many fans (and even media) focus on cap impacts. I am here to tell you to stop doing that. What matters is the cash, not the cap. Cash is real money in and real money out. Cap is simply bookkeeping. Even dead money—leftover nonroster charges for players no longer with the team—is merely unamortized proration clogging up the pipes of the overall cap. It is not cash.

When I was negotiating contracts on the team side for many years, I would have agents start to tell me how they could make our deal cap-friendly. I would cut them off. “I’m going to stop you right there,” I would say. “Our cap is none of your concern. I am paid quite well to manage and handle our cap. I’ll worry about that; you worry about your player. Are we clear?”

NFL teams have (now several) people paid to manage their cap books. They may choose management strategies that are team-friendly early and team-unfriendly late or more balanced. Cap can be easily moved around by a first-year NFL cap manager as much as an experienced one. The point is that it can be managed. The key for me as a negotiator, and an analyst, is always the same: What’s the cash? Year 1? The first three years? The first four years? And on and on.

Cash matters a lot more than cap.
Myth No. 2: Elite players should take less to “help the team win”

No.

Less cap? Sure. Less cash? No.

No.

Less cap? Sure. Less cash? No.

If top players, especially quarterbacks, want to facilitate the signing of other important players on the team—we can debate whether that is their role, but even if we allow for it—there is a way they can easily do that, and hundreds of players have. They can simply do a cap restructure of their contracts: converting their large salaries into signing bonuses, thereby pushing out cap charges into the future years through proration. These are cap restructures done by every team in the NFL. The player receives the exact same money he was scheduled to receive, sometimes even with better cash flow and an earlier payment schedule.

So, you ask, what is the myth? Well, the myth is that a player needs to take less cash—not just cap—to help the team. There are fans, media and, unfortunately, even players who believe this, and it is wrong.

Taking less cash only hurts the player and helps the owner, who is paying less than he should. NFL owners all have assets worth over $2 billion; they do not need players to sacrifice any cash in their contracts. It is quite enough for players to help the team to provide more cap; they certainly do not provide them more cash.

Two players come to mind immediately. I have talked often about Tom Brady and the Patriots over the years. He not only did several cap restructures, but for some reason (there are many theories), he also took less cash compared to other top-echelon quarterbacks from those days. And the Patriots (1) did not need the cash and (2) were a mid-to-low payroll team throughout those years.

The present-day comparable is Patrick Mahomes, owner of a ridiculously long and highly undervalued contract. Mahomes, whose contract was under market soon after he signed it and locked himself in for 12 years, talks often about helping the team sign other players. To Patrick: Cap restructures do that; do not sacrifice your cash earnings!

So when you read about a player saying he “took less” to help the team sign other players, know that he is being bamboozled by the team, or his agent, or the media, or whomever. He can always sacrifice short-term cap, but he is only hurting himself—not the team, not other players—by taking less money.
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BuccaNOLEer
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Re: Salary Cap: Fact vs Fiction

Post by BuccaNOLEer »

Correct me if I'm wrong, but the difference between a signing bonus and guaranteed money is that the guaranteed money will hit your cap over the course of the contract should the player depart early. The signing bonus will hit your cap all at once.
acmillis
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Re: Salary Cap: Fact vs Fiction

Post by acmillis »

Signing bonus can be evenly divided up over the length of the deal for cap purposes.
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IronDog
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Re: Salary Cap: Fact vs Fiction

Post by IronDog »

Snake wrote: Wed May 17, 2023 5:35 pm give SI.com some traffic.
This is the same "outfit" that is putting Martha "please, just go away, and take Snoop with you" Stewart on the cover of their swimsuit issue. They don't need anyone to give them traffic. I'd be good if someone pushed them INTO traffic.

Geah!
Push the damned button already!
GreatTimes
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Re: Salary Cap: Fact vs Fiction

Post by GreatTimes »

The cash being paid out to the Bucs players this year is 40 million plus less than the cap because of dead money.
mdb1958
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Re: Salary Cap: Fact vs Fiction

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