Reiss on a contract extention for Brady

[DefenseRules]

Patriots Blog - ESPN Boston

Interesting

 

[DonBlackmon55]

Patriots Blog - ESPN Boston

Interesting

get it done ! (10 characs)

 

[TheGodInAGreyHoodie]

With all due respect to Mike, I think it is in the Patriots best interest to pay the bonus first, then sign a new deal, instead of signing a new deal before the payout is due. Nothing wrong with coming to terms before March 5th, but I would wait until March 6th to ink the new deal.

Here is why....any new deal is going to take into account the $3 million dollars. That $3 million is right now scheduled to hit in an uncapped year.

Hypotheically.

March 4th Brady and Pats come to a six year deal with a $15 million dollar signing bonus plus salary etc.

$2.5 million of that signing bonus will hit in an uncapped year and the rest $2.5 each for the next 5.

OTOH March 8th same contract but with a $12 million dollar signing bonus. $5 million will hit in an uncapped year ($3 million plus $2 million) and the pats will have a $2 million hit each of the remaining years.

 

[pats1]

With all due respect to Mike, I think it is in the Patriots best interest to pay the bonus first, then sign a new deal, instead of signing a new deal before the payout is due. Nothing wrong with coming to terms before March 5th, but I would wait until March 6th to ink the new deal.

Here is why....any new deal is going to take into account the $3 million dollars. That $3 million is right now scheduled to hit in an uncapped year.

Hypotheically.

March 4th Brady and Pats come to a six year deal with a $15 million dollar signing bonus plus salary etc.

$2.5 million of that signing bonus will hit in an uncapped year and the rest $2.5 each for the next 5.

OTOH March 8th same contract but with a $12 million dollar signing bonus. $5 million will hit in an uncapped year ($3 million plus $2 million) and the pats will have a $2 million hit each of the remaining years.

I generally agree, but that assumes that the roster bonus is deducted from the total signing bonus of the new deal. From a negotiating standpoint, I don't see why Yee would do that - he would just claim the roster bonus was part of Brady's old deal, and that his new money should be the same regardless. He's not going to give up money that he already earned, per se. Then again, you could say that a new deal would eliminate the roster bonus too (hence why Reiss says they might want to get it done now). Personally, I don't think the roster bonus plays a role at all. It's part of Brady's old deal, condition #1 of the negotiation is that all previously-negotiated, unearned money (2010 salary + roster bonus) should stay, and that a new deal will include appropriate compensation on top of that. The total value of Brady's new contract should not be subtracted by the outstanding value of his old contract.

 

[Patspsycho]

I generally agree, but that assumes that the roster bonus is deducted from the total signing bonus of the new deal. From a negotiating standpoint, I don't see why Yee would do that - he would just claim the roster bonus was part of Brady's old deal, and that his new money should be the same regardless. He's not going to give up money that he already earned, per se. Then again, you could say that a new deal would eliminate the roster bonus too (hence why Reiss says they might want to get it done now). Personally, I don't think the roster bonus plays a role at all. It's part of Brady's old deal, condition #1 of the negotiation is that all existing money should stay.

Yee?

 

[pats1]

Yee?

Donald Yee, i.e. Brady's agent.

 

[TheGodInAGreyHoodie]

I generally agree, but that assumes that the roster bonus is deducted from the total signing bonus of the new deal. From a negotiating standpoint, I don't see why Yee would do that - he would just claim the roster bonus was part of Brady's old deal, and that his new money should be the same regardless. He's not going to give up money that he already earned, per se. Then again, you could say that a new deal would eliminate the roster bonus too (hence why Reiss says they might want to get it done now). Personally, I don't think the roster bonus plays a role at all. It's part of Brady's old deal, condition #1 of the negotiation is that all previously-negotiated, unearned money (2010 salary + roster bonus) should stay, and that a new deal will include appropriate compensation on top of that.

I agree if the Patriots and Yee start negotiating after March 6th.

But lets say Yee and the Patriots sit down today and come to term for what Brady ought be paid for 2011 onward. It isn't gonna matter any to Brady or Yee if the new contract is $3 million dollars smaller and signed March 10th, or contains $3 million more and is signed March 1st, but when it is signed will impact future years cap hits.

 

[pats1]

I agree if the Patriots and Yee start negotiating after March 6th.

But lets say Yee and the Patriots sit down today and come to term for what Brady ought be paid for 2011 onward. It isn't gonna matter any to Brady or Yee if the new contract is $3 million dollars smaller and signed March 10th, or contains $3 million more and is signed March 1st, but when it is signed will impact future years cap hits.

By your calculations, it would affect future cap hits by $500k/year, or .39% of the 2009 salary cap.

Does that matter more, or $3M to Yee/Brady? And why should Yee care about what the Pats' cap hits are? That's not of his concern.

But all of that is besides the point. There's a fundamental flaw in your logic, being that the roster bonus paid comes out of his new deal. I can't see any reason why Yee would accept an extension that is $3M smaller because of what was negotiated in the previous deal (the $3M roster bonus in 2010). The terms of the prior deal should not have any effect on the terms of the new deal. The Patriots can't say "you received a $3M roster bonus as part of your old deal, so now you're going to get $3M less in your new deal." No. The Patriots negotiated that roster bonus four years ago; it should be a done deal to both sides. It's their problem if they wouldn't want to pay it, or more accurately, wanted to take it out of a separate new deal.

That's kind of like negotiating some X rate on a loan, and then for the next loan the bank saying "we gave you such a great deal on your last rate, so this time your rate will be higher." That's not how it works.

 

[Patspsycho]

By your calculations, it would affect future cap hits by $500k/year, or .39% of the 2009 salary cap.

Does that matter more, or $3M to Yee/Brady? And why should Yee care about what the Pats' cap hits are? That's not of his concern.

But all of that is besides the point. There's a fundamental flaw in your logic, being that the roster bonus paid comes out of his new deal. I can't see any reason why Yee would accept an extension that is $3M smaller because of what was negotiated in the previous deal (the $3M roster bonus in 2010). The terms of the prior deal should not have any effect on the terms of the new deal. The Patriots can't say "you received a $3M roster bonus as part of your old deal, so now you're going to get $3M less in your new deal." No. The Patriots negotiated that roster bonus four years ago; it should be a done deal to both sides. It's their problem if they wouldn't want to pay it, or more accurately, wanted to take it out of a separate new deal.

That's kind of like negotiating some X rate on a loan, and then for the next loan the bank saying "we gave you such a great deal on your last rate, so this time your rate will be higher." That's not how it works.

How about the scenario where they scratch that $3m bonus and say "let's give you a higher bonus as part of the new deal." ?

 

[pats1]

How about the scenario where they scratch that $3m bonus and say "let's give you a higher bonus as part of the new deal." ?

As long as it's at least $3M more than it would be with the roster bonus. In other words, as long as you're not giving up money from the previously negotiated, signed, sealed, and delivered deal.

But that's not something that the Patriots would be in favor of, in this case. That is because a $3M roster bonus would count against the cap only in the uncapped 2010; a higher signing bonus (or an option bonus) would mean larger cap hits down the road; as would a roster bonus in 2011 or beyond.

 

[MoLewisrocks]

The $3M won't come into play IMO because if they don't get the deal done before it's paid they will simply build it's treatment into the new deal. They will have to anyway as it's not a viable workaround to the rules of an expiring CBA. The NFL Executive Council is going to rule on the legality of the deal based on what Brady is getting each year...and whether he's getting a new deal or an extension year 1-2 will have to be in compliance with the 50% rule.

Also, there is only 5 year amortization under the expiring CBA. The Pats seem to prefer split bonus language in their big deals, so I assume they will again use that approach with Brady. It helps them manage the cap hits as a new CBA will certainly revert to 6 year amortization which in order to take advantage of you need additional bonus money scheduled. He's likely going to getting in excess of $42M in signing/option bonus money or guaranteed money and in excess of that implied as guaranteed (by his amortization).

The more important thing to the FO will be the AAV of Brady's deal and his first 2 or three year take because that will slot the rest of the roster future contract wise.

 

[spacecrime]

yee?

...haw!! :d

 

[pats1]

The $3M won't come into play IMO because if they don't get the deal done before it's paid they will simply build it's treatment into the new deal.

By "build its treatment into the new deal," do you mean simply account for it in terms of the 50% rule, or subtract $3M from his new deal? Again, I don't see why Yee would agree to the latter in principle.

They will have to anyway as it's not a viable workaround to the rules of an expiring CBA. The NFL Executive Council is going to rule on the legality of the deal based on what Brady is getting each year...and whether he's getting a new deal or an extension year 1-2 will have to be in compliance with the 50% rule.

Right, his existing signing bonus allocation for 2010 stays no matter what. The roster bonus and salaries can be renegotiated, but I can't see Yee taking any money out of the old deal without getting something more in return on the new deal.

Also, there is only 5 year amortization under the expiring CBA. The Pats seem to prefer split bonus language in their big deals, so I assume they will again use that approach with Brady. It helps them manage the cap hits as a new CBA will certainly revert to 6 year amortization which in order to take advantage of you need additional bonus money scheduled. He's likely going to getting in excess of $42M in signing/option bonus money or guaranteed money and in excess of that implied as guaranteed (by his amortization).

But I don't believe a new CBA would retroactively re-amortize existing deals into six-year pro-rations.

The more important thing to the FO will be the AAV of Brady's deal and his first 2 or three year take because that will slot the rest of the roster future contract wise.

 

[IcyPatriot]

Hip Hip Hooray ... we give Tom more money which means he has more JAGs to throw to.

 

[PatsFaninME]

First, let me admit to salary cap stupidity....

With an uncapped year coming, why wouldn't Patriots wait for th cap to vanish, sign a player (Brady, Wilfork) to a monster contract and, instead of a signing bonus which prorates over life of contract, pay them a huge amount of salary (not signing bonus) during uncapped year. Wouldn't that make their "cap" hit, when cap is reinstated, minimal.

 

[Kontradiction]

So this is probably the reason why talks with Wilfork have slowed to stand still? Either way, I agree with paying Brady first. Wilfork is important, but Tom Brady is THE team.

 

[pats1]

First, let me admit to salary cap stupidity....

With an uncapped year coming, why wouldn't Patriots wait for th cap to vanish, sign a player (Brady, Wilfork) to a monster contract and, instead of a signing bonus which prorates over life of contract, pay them a huge amount of salary (not signing bonus) during uncapped year. Wouldn't that make their "cap" hit, when cap is reinstated, minimal.

The 50% rule. Contracts that decrease more than 50% from one year to the next have the difference subtracted from the first year and redistributed over the life of the deal as signing bonus.

Suggested reading: http://www.patsfans.com/new-england-patriots/messageboard/10/313167-uncapped-year-faq.html

 

[MoLewisrocks]

By "build its treatment into the new deal," do you mean simply account for it in terms of the 50% rule, or subtract $3M from his new deal? Again, I don't see why Yee would agree to the latter in principle.

To secure a new deal with an exponentially higher average...that money can disappear.

Right, his existing signing bonus allocation for 2010 stays no matter what. The roster bonus and salaries can be renegotiated, but I can't see Yee taking any money out of the old deal without getting something more in return on the new deal.

Again, the tradeoff is he's getting a lot more money this year and in years to come. Would you not swap $6.5M this year for $20M+ this year? As opposed to keeping the $6.5M and <$14M in bonus which makes you easier to walk away from amortization wise...dead cap is a form of implied guarantee you will be around to see more of a deal.

But I don't believe a new CBA would retroactively re-amortize existing deals into six-year pro-rations.

Of course it would. Previously amortized money is treated as it was under the CBA in effect at the time it was amortized. Future amortizations are subject to the CBA under which they are amortized. Which makes a split signing/option bonuses the way to go. Spreads the front money cash outlay (and risk) to one player leaving cash for bonuses for other players... It seems to be their preferred approach.

 

[pats1]

Of course it would. Previously amortized money is treated as it was under the CBA in effect at the time it was amortized. Future amortizations are subject to the CBA under which they are amortized. Which makes a split signing/option bonuses the way to go. Spreads the front money cash outlay (and risk) to one player leaving cash for bonuses for other players... It seems to be their preferred approach.

Wait, so this is what would happen under that scenario, assuming a generic 6-year deal with a $6M signing bonus.

2010: $1.2M amortization ($6M/5-year max)
(new CBA)
2011: $0.96M amortization ($6M-$1.2M/5-years remaining)
2012: $0.96
2013: $0.96
2014: $0.96
2015: $0.96

 

[nashvillepatsfan]

Where's 'PatJew' with his usual "sign the beast" comment? lol