We CAN make the cap room to sign Peppers - Unsubstantianted Claim

Miguel said:

Solman, do you think that your Brady proposal is in compliance with the CBA??

I have shown why I do not think that it is.

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I think that my Brady proposal can in fact comply with the CBA.

Obviously, it can also be drafted in a way which does not comply with the CBA.

I'm debating the utility of drafting mock contractual language so we can get to the specifics.

Is it safe to say that we agree on these two points:

1. The 30% rule 8(b) in the CBA clearly excludes all compensation treated as a signing bonus.

2. 8(d) add back in a very narrow class of options (amongst them the Haynesworth bonus)

But disagree on this point?

3. You can draft a "guaranteed option" that is excluded by 8(b) and not included by 8(d).

AdamJT13 said:

Yes, any monetary protection a team can offer a player in case it doesn't exercise the option will trigger the 30 percent problem. No player will sign a contract in which a team has the option of NOT paying a huge bonus without getting something significant in return — either money (which would count toward the 30 percent rule) or contract years (which can't be a condition in your "loophole").

Believe me, if a little tweak of the wording in a contract could get around the 30 percent rule, NFL teams would be doing it right now instead of being burdened by the rule.

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Thanks.

I do think that protection could be structured such that it is treated as exempt from the CBA. If Miguel responds that I have correctly understood him, I will attempt to draft some mock language this evening as an example to illustrate the point. (Its too bad that the contracts aren't made publicly available.)

Also, I think that there is a good reason why the owners wouldn't be trying to exploit loopholes, even if they are certain they exist. By exploiting a loophole, an owner would be signaling to the rest of the teams his intention to spend well beyond the current cap in an uncapped 2010. This would hand leverage from the owners to the union and piss off his fellow owners in the process.

I think its safe to say that most teams do not intend to dramatically exceed the old cap in 2010. And it is safe to say that the remaining teams are concerned about both the new CBA, and the negotiations about revenue sharing which will may take place simultaneously.

Absent something that could make a huge difference (like adding Julius Peppers to an already stacked patriots team ) there would be no reason to even consider this.

solman said:

I do think that protection could be structured such that it is treated as exempt from the CBA.

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I think you meant exempt from the 30 percent rule, since nothing is exempt from the CBA. But it cannot be done. The only compelling consequences of a non-exercise of the option -- money and contract years -- both fall under the 30 percent rule.

AdamJT13 said:

I think you meant exempt from the 30 percent rule, since nothing is exempt from the CBA. But it cannot be done. The only compelling consequences of a non-exercise of the option -- money and contract years -- both fall under the 30 percent rule.

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I'll post my real example later.

But it suddenly occurred to me that section 8(c) is uniquely relevant in the case of Tom Brady, so I'll post this slightly silly example now:

1. Brady signs a five year deal
2. He gets 2009 salary of $1M and a $5M signing bonus payable now.
3. Brady gets to void the remaining years of the contract during the first month of any League year if, during the previous league year, he started two regular season games.
4. The team may buy back the remainder of Brady's contract by paying him $100M.

The $100M payment is exactly what section 8(c) contemplates, provided that starting two games is considered an "unlikely to be earned" incentive.

The CBA seems to say that "unlikely to be earned" is determined by the player's performance during the previous season unless he "did not play during the prior season". Tom Brady obviously did play last year, so unless there is a precedent for substituting common sense for the language of the CBA (and the Transition tag dispute suggests otherwise).

This is a silly example, and it doesn't compensate Tom Brady properly if he DOES get injured before the second game in 2009. But I thought I'd throw it out there to see if it reveals some error in my understanding of the CBA.

solman said:

I think that my Brady proposal can in fact comply with the CBA.

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I am not asking if your proposal can comply with the CBA. I am asking if you think that it does now.

Miguel said:

I am not asking if your proposal can comply with the CBA. I am asking if you think that it does now.

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My original proposal was that we "use huge guaranteed options due in 2010 for each to make them whole". I believe this lacks sufficient specificity to determine CBA compliance.

Since I was not aware of 8(d) when I wrote that, I would not then have been able to provide specific terms that complied with the CBA.

Here are specific terms which, I believe, do comply with the CBA and achieve the desired goals. I would appreciate it if you could show me where I have erred:

Mock Term Sheet said:

1. This contract replaces the previous contract and lasts through the end of the 2014 League Year

2. Tom Brady will receive the following amounts as salary:

2009: $2M
2010: $2.6M
2011: $3.2M
2012: $3.8M
2013: $4.4M
2014: $5.0M

3. The salary in 2009 through 2012 shall be guaranteed for skill, injury and salary cap terminations except as specified below

4. Team Option: At the beginning of the 2010 League year, the team may exercise the following option:

a. The team will pay the player an option bonus of $100M
b. The player's salary for the remainder of this contract will be reduced to the league minimum and will no longer be guaranteed.

This option will expire one month after the beginning of the 2010 league year.

5. Player Option: If the team option expires unexercised, the player shall receive the following option, which may be exercised at any time prior to the start of the 2010 season:

a. The player shall receive a bonus payment of $80M
b. The player's salary for the remainder of this contract will be reduced to the league minimum and no longer be guaranteed.
c. The final year of this contract (2014) shall be voided.

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The bonus payments in 4 and 5 above fall within the following definition from Article XXIV Section 7(b)(iv):

CBA said:

(3) Any consideration, when paid, or guaranteed, for option years, contract extensions, contract modifications, or individually negotiated rights of first refusal;

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It is not included in Section 8(b) [the 30% rule] because any amount listed in 7(b)(iv) is excluded by that section.

It is not covered by Section 8(d), which overrides the exclusion in 8(b) in the case of the Haynesworth contract.

If I have erred, I would very much like to know how.

Thanks.

*I acknowledge that the Patriots could cut Brady after the 2009 season and only be on the hook for $11.6M. I do not consider this to be a serious defect. Brady is still better off financially than if he was cut after the 2009 season under his current contract.

Good debate going on here.

Getting into some interesting deyails...

solman said:

My original proposal was that we "use huge guaranteed options due in 2010 for each to make them whole". I believe this lacks sufficient specificity to determine CBA compliance.

Since I was not aware of 8(d) when I wrote that, I would not then have been able to provide specific terms that complied with the CBA.

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In other words, no. Yet, you complained that I changed the title

What happened to making Brady's cap hit just 1 million more than his prorated signing bonus amortization amount??

Miguel said:

In other words, no. Yet, you complained that I changed the title

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You could have just written a post explaining that the Haynesworth option is covered by rule 8(d).

Instead you changed the title to "Unsubstantiated", without even saying that you had done so.

That's not cool.


Show me where there is an unremediable problem with my proposed Brady term sheet and I'll put the apology back.

Miguel said:

What happened to making Brady's cap hit just 1 million more than his prorated signing bonus amortization amount??

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Is any of the existing 2010 compensation guaranteed?

If not, just halve all of the salary numbers and you have a $1M cap hit.

If so, further adjustments are required.

At I certain point while I was playing around with things, the contract with a $1M 2009 cap hit was much more complicated than the contract with a $2M 2009 cap hit. I switched all the numbers to be based around a 2009 cap hit of $2M at that point and I never switched back.

solman said:

You could have just written a post explaining that the Haynesworth option is covered by rule 8(d).

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Your first post was on 2:31PM on 3:17.

At 3:53PM You wrote:"Article XXIV Section 8(d) does provide that the 30% rule applies to options that can be exercised to extend the duration of a contract"

Why should I repeat something that you wrote???

At 7:51 you posted "Is there some information about why this isn't possible that hasn't shown up in the thread yet?"

Instead you changed the title to "Unsubstantiated", without even saying that you had done so.

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Your own words disprove your original post.

Show me where there is an unremediable problem with my proposed Brady term sheet and I'll put the apology back.

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The $100 million is an option bonus.

solman said:

3. Brady gets to void the remaining years of the contract during the first month of any League year if, during the previous league year, he started two regular season games.

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From the CBA:
Section 9 (b)
All rights by a player to terminate a Player Contract must be exercised prior to the first day of any League Year to be terminated.

Miguel said:

The $100 million is an option bonus.

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But it is NOT an option to extend the term of a player contract (See the text of 8(d)).

That means it is not covered by 8(d).

That means it is not subject to the 30% restriction.

solman said:

But it is NOT an option to extend the term of a player contract (See the text of 8(d)).

That means it is not covered by 8(d).

That means it is not subject to the 30% restriction.

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So what is the option for???

solman said:

But it is NOT an option to extend the term of a player contract (See the text of 8(d)).

That means it is not covered by 8(d).

That means it is not subject to the 30% restriction.

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Yes it is. And it's protected by the alternate player option language just the same as it would be protected if it simply guaranteed future salary in the event the team failed to exercise the option.

Miguel said:

So what is the option for???

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LOL I guess we can call that the $100M question...

The answer would appear to be it's just a number to allow solman's Brady term sheet to fly, nothing more...certainly the Executive Committee would see that...and therefore allow it... since it's obvious Brady would walk away from the $80M cash and void the remainder of the deal after agreeing to a deal that lowered his already comparatively paltry 2009 compensation by $2.5M.

You know, the sad part is over and above his inability to let this go over his belief he can manipulate language to circumvent the expiring cap rules, he has no clue what the implications of Bob Kraft handing Tom Brady $80-100M in March 2010 would be. Nor does he care because the object of his exercise has always been just to prove he was right when he boldly stated a deal could be done to free up cap space. Not that doing so would make any sense...

Maybe IT COULD be done...and I'll leave it up to the capologists..like Miguel and others who really know what can and can not be done..but what about the overview and skewing ANY contract like that??? Makes NO sense at all in a larger picture..Maybe it COULD be done...but why??? Just like one could walk from Boston to LA...but why??? Could be done..but makes NO SENSE!!

Pats726 said:

Just like one could walk from Boston to LA...but why???

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to get to LA?