01-04-2008, 02:07 AM
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#37
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Banned
Join Date: Nov 2007
Posts: 65
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Re: Broncos (!?!) writer(?) sour grapes
Quote:
Originally Posted by letekro
Making deferred payments = Violating the salary cap.
(I.e., We can't pay you all the money you want this year b/c of the SALARY CAP, but we will be able to make future payments to you that will equal the present value of the amount you wanted this year).
These were side agreements that were not disclosed in the contracts submitted to the league. Why not? B/c they violated the SALARY CAP.
Whatever their motivation to do it (cash flow, etc.), it clearly gave them a distinct advantage vis a vis the salary cap by allowing them to keep their two stars - Elway and Davis - at deflated salary cap numbers while secretly paying them well in excess of those numbers. Do you not see this?
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That's what you don't understand, the money owed to Elway and Davis in 1998 was reported to the league and counted against the cap. Bowlen asked Elway and Davis to defer the bonuses owed to them in order to pay the salaries of the administrative staff and up front costs of Invesco.
Understandably, the league has a problem with this type of accounting, as it could lead to problems, and the last thing they want is to see a team start running their rosters in the red. The NFL ruled the Broncos didn't receive a competitive advantage from the move, but did break the rules that they put in place to keep solvency on the balance books. They don't want to see a small market team deferring payments and then one year have to declare bankruptcy because their revenue isn't covering what they owe. |
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