Welcome to PatsFans.com

An uncapped year discussion

Discussion in 'PatsFans.com - Patriots Fan Forum' started by signbabybrady, Mar 13, 2009.

Thread Status:
Not open for further replies.
  1. signbabybrady

    signbabybrady Rookie

    Joined:
    Feb 19, 2007
    Messages:
    8,783
    Likes Received:
    19
    Ratings:
    +20 / 1 / -1

    #24 Jersey

    I was always under the idea that the uncapped year and its restrictions were put in place to force the Owners and the PA to get a deal done. Meaning the restrictions were bad for both sides so they would both be willing to negotiate.

    Many on here have been going by the assumption next year will be uncapped and are trying to use the uncapped year to spend Krafts money in ways we don't know he would.(like paying off all of Wilforks bonus in 2010 so its off the books for future years)

    I think it is a bad assumption by many to think next year will be uncapped and I think it is even worse to think Kraft will spend a ridiculous amount of money in the uncapped world....He might spend more than most but I can't see him spending much more than he usually does.

    Also dont forget it is a labor issue so barring a renegotiating of the CBA we are likely looking at bad things (lockout or strike) not good things (uncapped spending spree).
  2. AzPatsFan

    AzPatsFan Rookie

    Joined:
    Sep 15, 2004
    Messages:
    5,751
    Likes Received:
    10
    Ratings:
    +15 / 1 / -0

    You are under a misapprehension. Signing a key player like Sey or Wilfork wil incur an enormous cost in real money, in year one for the "Signing Bonus" or a huge "Roster Bonus/Salary".

    The sums of money are the same in an uncapped year. The only difference is the accounting. In one case its amortized/depreciated, in the same year, (roster bonus/salary); in the other case its amortized/depreciated over several years, (singing bonus). Most business prefer rapid depreciation schedules, and actually a single year depreciation.

    It behooves the Pats to change the way the contract refers to the sum of money if they believe that a CAP will return or not. It changes not a wit, the actual outgo.:)
  3. NEGoldenAge

    NEGoldenAge Banned

    Joined:
    Nov 21, 2007
    Messages:
    2,025
    Likes Received:
    2
    Ratings:
    +2 / 0 / -0

    I think a salary cap is necessary in all professional sports. Even one single uncapped year will let a lot of teams get out of a mess that they got themselves into... The Jests are a perfect example.

    I'll be pissed if we get an uncapped year, but I think, with the passing of Mr. Upshaw, that an uncapped year is what we will see. I don't believe they have replaced him yet.
    Last edited: Mar 13, 2009
  4. Brettlax3434

    Brettlax3434 Rookie

    Joined:
    Jan 27, 2009
    Messages:
    588
    Likes Received:
    0
    Ratings:
    +0 / 0 / -0

    wouldn't Upshaw want an uncapped year?
  5. NEGoldenAge

    NEGoldenAge Banned

    Joined:
    Nov 21, 2007
    Messages:
    2,025
    Likes Received:
    2
    Ratings:
    +2 / 0 / -0

    I don't know. But I do know that negotiations won't be happening until he is replaced.
  6. signbabybrady

    signbabybrady Rookie

    Joined:
    Feb 19, 2007
    Messages:
    8,783
    Likes Received:
    19
    Ratings:
    +20 / 1 / -1

    #24 Jersey

    There are restrictions to the players in an uncapped world....there would be tons of players in the 3rd-6th years that wont be happy to be restricted instead of unrestricted for example.


    Oh I understand what your saying but you are the one with misapprehension....the reason for doing this would be to pay him all at once to free up money for the cap in later years so at some point you will be spending money that you don't know Kraft would want too....it winds up more than just creative accounting to take advantage of it....And don't get me wrong I think Kraft would have the Pats take advantage to some extent but he isnt going to go all stienbrenner....and as a football fan I would rather see labor peace than an uncapped year.
  7. Deus Irae

    Deus Irae PatsFans.com Retired Jersey Club PatsFans.com Supporter

    Joined:
    Oct 10, 2006
    Messages:
    40,774
    Likes Received:
    64
    Ratings:
    +89 / 3 / -1

    Disable Jersey

    Well, I haven't done a lot of research on this because I figure it's not worth the time, but I would imagine that smart, wealthy teams would try to front-load contracts if at all possible. That would price out the Green Bays of the world and lessen the cap hit in future years when the CBA finally does get negotiated.
  8. spacecrime

    spacecrime Rookie

    Joined:
    Sep 13, 2004
    Messages:
    8,329
    Likes Received:
    17
    Ratings:
    +17 / 0 / -0

    But neither side wants to negotiate.

    How do youk figure there will be a CBA if neither side is interested in talking about one, let alone hammer one out and sign it?

    Also, you mention that Kraft will not spend a lot of money. Why do you say that? He is one of the teams that has the capital to do so if he wants to. He seems like a guy who enjoys winning superbowls. You think he will cheap out, save a few million and not be a world chmapion? By being world champ, he has increased the value of his team. It would be good business to win more superbowls. Saving a few million may be necessary for Ralph Wilson and Irsay to survive, but it is penny wise and pound foolish for Kraft, Snyder, Jones, Allen, and the rich owners. None of whom got to where they are by being pound foolish.


    You are looking at it from your viewpoint, not the viewpoint of the principals. If the players want to go on strike, it is not a bad thing in their mind. To them it is what they want to do. Ditto a lockout. If they owners think it is in their best interests, they will lock out the players.

    I hope it doesn't come to that, but it may.
  9. signbabybrady

    signbabybrady Rookie

    Joined:
    Feb 19, 2007
    Messages:
    8,783
    Likes Received:
    19
    Ratings:
    +20 / 1 / -1

    #24 Jersey

    I heard the PA will vote on a new leader this weekend. Also there has to be some posturing there... no side wants to blink but at some point they will be back at the table (may not work out but they will negotiate more). And as I said the uncapped world and its restrictions were put in place to make both sides want to avoid it.


    I am not trying to say Kraft wont be smart about and he may open up his wallet but I think a lot on here have presumed alot about how they might work deals with guys like Wilfork, Mankins, Seymour, and the other FA next year with Krafts money assuming he will just throw it around like crazy paying all these guys in an uncapped year to free up ridiculous sums.

    No, any work stoppage is bad from both sides because no one is making money but sometimes either side feels its the only way to get what they feel they deserve. If they dont come to an agreement and an uncapped year comes there will be players and owners who get screwed and watch other players and owners take advantage of it and it could be real ugly. I hope they take care of things and don't let it get there.
    Last edited: Mar 13, 2009
  10. solman

    solman Rookie

    Joined:
    Jan 12, 2007
    Messages:
    1,069
    Likes Received:
    1
    Ratings:
    +1 / 0 / -0

    1. There will be no strike or lockout in 2010. The CBA prohibits it. Players could probably get around this by decertifying the union but they won't because:
    A) The union has always maintained that no cap would be good for the players
    B) An uncapped year is unquestionably better than a labor stoppage for the players and
    C) They would look like the bad guys, and they can ill-afford to alienate the public.

    2. You are absolutely right about Kraft be restrained in his 2010 spending. Kraft is a leader amongst the owners. He will be under pressure to set a good example by not overspending. He is also a businessman first. It is not at all clear that going Dan Snyder in 2010 would be a good investment.

    3. I don't agree with the assertion that the uncapped year is intended never to happen. An uncapped year gives both sides the opportunity to observe just how large the actual difference is between player salaries in a capped and an uncapped world. If the two sides are unable to reach an agreement, observing the uncapped world will at least allow them to better agree on the financial consequences of the cap.

    4. I absolutely think we are heading into an uncapped year. The owners NEED to recover some of the revenues that they gave to the players. The financial consequences of an actual labor stoppage are very asymmetric. They owners will be looking to reduce the player's share by about 2%. This represents between 10 and 20% of the owner's profits, but just 2% of the player's take home pay. The new union leadership can't afford to look weak, and they will have difficulty accepting such a reduction unless they are on the very precipice of a work stoppage.

    5. In my opinion, an uncapped 2010 in which player salaries increase by very little is likely to be a decisive factor in convincing them to accept a haircut (But I still expect them to push things to the last minute or even further before agreeing to a deal.)
  11. solman

    solman Rookie

    Joined:
    Jan 12, 2007
    Messages:
    1,069
    Likes Received:
    1
    Ratings:
    +1 / 0 / -0

    There are serious drawbacks to signing a long term deal with a huge portion of the money guaranteed up front. Many players have serious character and motivation issues. You would never see a team give a Terrel Owens or an Albert Haynesworth a huge chunk of money up front because of the strong likelihood that they will misbehave and/or underperform after pocketing the up front money.

    :confused3:

    OK, you would never see an intelligently managed team do something like that.
  12. NEGoldenAge

    NEGoldenAge Banned

    Joined:
    Nov 21, 2007
    Messages:
    2,025
    Likes Received:
    2
    Ratings:
    +2 / 0 / -0

    To me, this is a very convincing argument, but I'd rank below a novice at this sort of thing. Do you come from a finance, law or labor background? Where do you get your information?
  13. solman

    solman Rookie

    Joined:
    Jan 12, 2007
    Messages:
    1,069
    Likes Received:
    1
    Ratings:
    +1 / 0 / -0

    Finance. Which part of the information?
  14. NEGoldenAge

    NEGoldenAge Banned

    Joined:
    Nov 21, 2007
    Messages:
    2,025
    Likes Received:
    2
    Ratings:
    +2 / 0 / -0

    I was refering to the intent you implied about an uncapped, and also the specifics about what the owners are looking for. Basically, all the information provided that does not come directly from your finance knowledge, or the opinions expressed.
  15. NEGoldenAge

    NEGoldenAge Banned

    Joined:
    Nov 21, 2007
    Messages:
    2,025
    Likes Received:
    2
    Ratings:
    +2 / 0 / -0

    I'm just hoping to educate myself a bit.... errr, with some of your help :) Thanks!
    Last edited: Mar 13, 2009
  16. upstater1

    upstater1 Rookie

    Joined:
    Nov 29, 2005
    Messages:
    12,926
    Likes Received:
    9
    Ratings:
    +9 / 0 / -0

    +1

    Exactly, this is how it works. Wilfork already has a number that he expects up front.
  17. upstater1

    upstater1 Rookie

    Joined:
    Nov 29, 2005
    Messages:
    12,926
    Likes Received:
    9
    Ratings:
    +9 / 0 / -0

    Huh? Have you seen Albert Haynesworth's guarantees?

    The only real question here is, how big is the signing bonus?

    You ALWAYS have signing bonuses. The key is, what if you get the bonus to count for the first year?
  18. solman

    solman Rookie

    Joined:
    Jan 12, 2007
    Messages:
    1,069
    Likes Received:
    1
    Ratings:
    +1 / 0 / -0

    Intent is a difficult thing to reason about.

    Gene Upshaw's threats prior to the last CBA (If we have an uncapped year, the cap is never coming back) suggest that in his mind a single uncapped year was not nearly as serious a threat as a future without caps.

    I don't think there can be any doubt that the players union would prefer an uncapped year. They have long believed that removing the salary cap and salary minimum would substantially increase player compensation. Until this most recent CBA, that was almost certainly true.

    But the salary cap has gone up almost 50% ($85.5M to $127M) in four years, the economy is weak, and many teams are either losing money or substantially break even ventures.


    Ultimately, I don't really believe that intent matters much here. This is an economic argument between two parties who both have to agree or suffer greatly. A small negative change for one party can produce a huge positive change for the other party.

    I'd guesstimate [source: my ass] that the median locked out player will lose over 25% of his career NFL earnings over the course of one lost season, but lose slightly more than 1% of his career NFL earnings by agreeing to what will likely be the owners' final offer. Compromises between rich and poor players, and the influence of agents will likely make the union negotiate as if they stand to lose around 13% of career NFL earnings from a locked out season and 1.5% from agreeing to the owners' demands [same source].

    It is hard to predict what a lost season will do to franchise value, but a very modest reduction in the players' share will have a substantial positive impact on the owners' profitability and on franchise value. I think the owners have to be willing to risk a lockout to get this done.
    Last edited: Mar 13, 2009
  19. upstater1

    upstater1 Rookie

    Joined:
    Nov 29, 2005
    Messages:
    12,926
    Likes Received:
    9
    Ratings:
    +9 / 0 / -0

    Let's give an example of how one take ADVANTAGE of an uncapped year. There seems to be some perception here that some are advocating that Kraft go wild in free agency by spending obscene amounts. Instead, we are counseling some creative accounting.

    Mankins, Seymour, Wilfork are the big 3 for next year, with Mankins being less of a priority because of his position.

    Let's just assume, for simplicity sake, that Wilfork will agree to a contract of $10 million per year for 4 years, but he wants half up front.

    Normally, that would mean $5 million in bonus + salary counted against the cap each and every year, with the salary not rising more than 30%.

    Now, if you're signing contracts in an uncapped year, you can guarantee the bonus as salary. This is what Wilfork's deal might look like.

    He wants $20 million in the first year, right? So...

    Year 1: $15 million salary + $5 million signing bonus
    Year 2: $5.7 million salary
    Year 3: $6.7 million salary
    Year 4: $7.7 million salary

    Cap impact:

    Year 1: uncapped
    Year 2: $7.4 million
    Year 3: $8.4 million
    Year 4: $9.4 million

    You've essentially saved yourself $10 million of cap space in later years.
  20. solman

    solman Rookie

    Joined:
    Jan 12, 2007
    Messages:
    1,069
    Likes Received:
    1
    Ratings:
    +1 / 0 / -0

    The confused smiley was supposed to indicate my impression of Haynesworth's contract.

    But its still a valuable point. Guaranteed or upfront money can prove disastrous if the player fails to perform. Dan Snyder is a moron for signing the Haynesworth deal. The risks of him going to jail (from one of his many automotive escapades); getting injured (on the field or off); getting kicked out of the league (for conduct on or off it); or just plain slacking off (Because he has little financial incentive moving forward) are enormous. Add to that the ever present possibility that his skills diminish, and signing this deal was flat out unintelligent.

    Many owners, Kraft included, are not going to give huge upfront money to the many players who can't be trusted to live up to it.
  21. solman

    solman Rookie

    Joined:
    Jan 12, 2007
    Messages:
    1,069
    Likes Received:
    1
    Ratings:
    +1 / 0 / -0

    Exactly right. Two caveats:

    1. If the player is suspended or otherwise unable to fulfill his contract after the first year, you can't get back the money spent in this manner.

    2. The next CBA hasn't been written yet. It can easily be written to count money from early years against the cap in latter years. If many owners pull this sort of crap, Goodell is likely to insist on this. (Of course the union can insist on not doing this, but no deal means no football).
  22. signbabybrady

    signbabybrady Rookie

    Joined:
    Feb 19, 2007
    Messages:
    8,783
    Likes Received:
    19
    Ratings:
    +20 / 1 / -1

    #24 Jersey

    And from Krafts perspective he winds up spending 10 million more on talent why does he want to do this when he can pocket the ten mil if he works like he usually does? sure he wants to win SBs but does he want to bye them or spend within limits.....again I am sure to some extent he would take advantage but if he saves 10 mil like that (keep in mind it would persumably be saved on future cap which he would than use so he spends 10 mil more this way) he could in an uncapped world do this as many times as he wanted with their own FAs so if he did this with Seymour, Wilfork, Mankins, he in theory could free up to 30 mil but it doesnt come out of no where it comes out of Krafts pocket.
  23. PatsWickedPissah

    PatsWickedPissah PatsFans.com Supporter PatsFans.com Supporter

    Joined:
    Feb 10, 2005
    Messages:
    22,515
    Likes Received:
    75
    Ratings:
    +86 / 0 / -0

    Disable Jersey

    Huh? Krafts spends the same $40M either way.
    The difference to him is CASH FLOW. He needs $20M up front vs say $10M to get the cap savings of $10M. (I ignored interest rate time value of money nuance to simplify the point) This cash flow business is why cash poor owners like Ralph Wilson will get hammered in an uncapped year. They don't have the finances to take advantage.

    I re-read and see your point about how in the 'future' he'll send the cap savings as 'extra' money on a player. Kraft wants to field a Championship team and based upon what he's done so far I think he will spend a few million extra to insure success. Not Steinbrenner crazy but a few million to preserve the dynasty.
    Last edited: Mar 13, 2009
  24. mgteich

    mgteich PatsFans.com Veteran PatsFans.com Supporter

    Joined:
    Sep 13, 2004
    Messages:
    19,975
    Likes Received:
    24
    Ratings:
    +28 / 1 / -0

    Actually, I don't think that there is even a cach flow difference, just a cap difference. In a capped world, Wilfork would require the same $20M guaranteed. In an capped world, the salary might be $5M and the bonus $15M. Kraft's cash flow is exactly the same.

  25. PatsWickedPissah

    PatsWickedPissah PatsFans.com Supporter PatsFans.com Supporter

    Joined:
    Feb 10, 2005
    Messages:
    22,515
    Likes Received:
    75
    Ratings:
    +86 / 0 / -0

    Disable Jersey

    I stand corrected. You are right. DUH!
  26. upstater1

    upstater1 Rookie

    Joined:
    Nov 29, 2005
    Messages:
    12,926
    Likes Received:
    9
    Ratings:
    +9 / 0 / -0

    In the above scenario, we've already agreed to give Vince a $20 million in the first year.

    By making $15 million guaranteed in the first year, we don't have to carry over the $20 million signing bonus into future years. Instead, the carryover would be $5 million. Again, this has nothing to do with how much money Kraft is paying out to Vince Wilfork. It's the same exact money, except the BONUS is counted differently.

    I've said this a number of times in this thread, as have others.

    I see your point about signing say a FA (or maybe paying Brady what he deserves!!) with excess cap space in the future. But are you assuming that Kraft wouldn't have spent more to the cap anyway if it was larger in past years? I know he has a budget, but we're getting very close to the time when Tom Brady is going to cash out. Kraft OWES Brady bigtime.
    Last edited: Mar 13, 2009
  27. upstater1

    upstater1 Rookie

    Joined:
    Nov 29, 2005
    Messages:
    12,926
    Likes Received:
    9
    Ratings:
    +9 / 0 / -0

    Other than Terry Glenn, we haven't had a situation like a suspension in New England. It's pretty rare, no?
  28. upstater1

    upstater1 Rookie

    Joined:
    Nov 29, 2005
    Messages:
    12,926
    Likes Received:
    9
    Ratings:
    +9 / 0 / -0

    Well, that risk would be there with a large signing bonus as well, one that is carried over in cap years.

    The only difference, as you said in a later post, is that sometimes the signing bonus can be recovered, as in Michael Vick's case.

    But if a player slacks off, and you've paid him a signing bonus, there's nothing you can do about it. So, for the vast majority of players, there is no difference between paying the money as a signing bonus, or paying it as guaranteed salary. Still the same amount of money. You still can't recover it if the player becomes a slacker.
  29. nabwong

    nabwong PatsFans.com Supporter PatsFans.com Supporter

    Joined:
    Nov 21, 2007
    Messages:
    2,321
    Likes Received:
    7
    Ratings:
    +8 / 0 / -0

    #12 Jersey

    The whole salary cap thing is a big irony to me in the land of the free market. :confused:
  30. Deus Irae

    Deus Irae PatsFans.com Retired Jersey Club PatsFans.com Supporter

    Joined:
    Oct 10, 2006
    Messages:
    40,774
    Likes Received:
    64
    Ratings:
    +89 / 3 / -1

    Disable Jersey

    This nation hasn't been a free market nation for a long, long time.
Thread Status:
Not open for further replies.

Share This Page