Can full bonus be paid in uncapped year...?

[Brady'sButtBoy]

...without future ramifications?

For example - is there anything that would prevent a team from signing a player to a big contract then paying him all the guaranteed money in 2010 so that when (I assume it's not an "if") the cap resumes most of the money is already gone?

In other words, why not give Brady a new deal with $40m+ in guaranteed money and pay all of the bonus in 2010? Then when the new cap comes into place, he'd be signed for 4+ years but most of the money would be off the cap already. Ditto for Wilfork, or Peppers.

This question was buried in the Peppers thread and I was hoping someone out there might be able to better answer this question. One response mentioned the 50% rule but is it still in force given that the CBA has expired?

Because if it's possible to just drop all the cash off the books in that one year and then have very reasonable cap numbers going forward, you'd have to figure an owner like Jones (or Daddy Kraft?) would try to stack his team.

 

[Patsmaniac]

Re: Can Full Bonus Be Paid in Un-Capped Year...?

Dont know the answer but would like someone to clarify it. What does interest me is that you correctly mention owners like Jones and Kraft, who have money, as potential big time spenders in an uncapped year. Know one ever mentions the possibility of the Seahawks going gangbusters. Paul Allen could buy Kraft 10 times over with his money. Just a thought.

 

[BTTA]

Re: Can Full Bonus Be Paid in Un-Capped Year...?

I asked this a few weeks ago, and the consensus here was that it has been made clear to teams that if there is an uncapped year, the next contract will ensure that bonuses paid out during the uncapped year will be accounted for in the same way, or similar, as it has been in the past contract. So there is a high degree of risk associated with this gambit.

 

[ctpatsfan77]

Re: Can Full Bonus Be Paid in Un-Capped Year...?

The key point, though, is that nobody can say for certain, as that would have to be decided in the new CBA.

This is also the reason why the Patriots will not hand out any contracts like Albert Haynesworth's, even if they have the money and desire to do so.

[On the flip side, if the owners have their way, the cap in 2011 could actually be lower than in 2009, because they want to shrink the pie that gets divided.]

 

[DaBruinz]

Re: Can Full Bonus Be Paid in Un-Capped Year...?

I think that if the bonus was paid as a ROSTER BONUS, then yes, it could be done that way. However, there is the 30% rule that is in effect as well and I am not sure how that works exactly. Hopefully, Miguel will chime in and set the record straight on this.

 

[pats1]

1) The CBA has not expired. It will expire following the 2011 season, at which point there is no labor agreement and thus a lockout. But an uncapped year is PART of the CBA, not its absence.

2) Signing bonus money is always *paid* in full at the date of signing, no matter if it's a capped year or not. They are only spread out over the life of the deal for accounting purposes - ALWAYS. Now, you said that the Pats could give Brady $40M guaranteed in 2010. First of all, if that included signing bonus, it by rule has to be spread out over the life of the deal. The other option would be a huge roster bonus, or a huge guaranteed salary (or ANY guaranteed salary for that matter, as that is also OATSB). The problem is, this part of the CBA:

"For purposes of determining Team Salary under the foregoing, the term “signing bonus” shall include:

The difference between the Salary in the second contract year and the first contract year when Salary in the second contract year is less than half the Salary called for in the first year of such Contract;"

In other words, if Brady's total cap number (basically, but not exactly) in 2010 is more than twice his total cap number in 2011 (capped?), then that difference is subtracted from 2010 and redistributed over the life of the deal.

I recommend you read my uncapped year FAQ for questions such as these.

 

[pats1]

Re: Can Full Bonus Be Paid in Un-Capped Year...?

I think that if the bonus was paid as a ROSTER BONUS, then yes, it could be done that way. However, there is the 30% rule that is in effect as well and I am not sure how that works exactly. Hopefully, Miguel will chime in and set the record straight on this.

The 30% increase/decrease rule applies only to contracts entered in a capped year and extending into an uncapped year. I asked Miguel recently if it applied to contracts entered in an uncapped year, and he said he did not yet have an answer. But the 50% OATSB rule does still apply.

 

[pats1]

Re: Can Full Bonus Be Paid in Un-Capped Year...?

I asked this a few weeks ago, and the consensus here was that it has been made clear to teams that if there is an uncapped year, the next contract will ensure that bonuses paid out during the uncapped year will be accounted for in the same way, or similar, as it has been in the past contract. So there is a high degree of risk associated with this gambit.

Actually there's been some recent news to the contrary:

Post-salary cap, teams will proceed at their own peril | ProFootballTalk.com

 

[Rob0729]

You cannot eat an entire bonus in this year for the reasons stated. But my guess that any long term deals made this year will have the bonuses spread out over this year and next. A lot of teams will want to tie bonus money into whether there is a 2011 season or not to protect them from giving a player a huge bonus this year and only getting one year out of the guy until a work stoppage and then having no football in 2011 and then in 2012 have the player another year older and using most of the season to get back into football shape.

 

[JoeSixPat]

I guess many of these questions relate to how the NEXT collective bargaining agreement addresses bonuses paid during this period of time. And while the CBA runs through 2011 there remains the possibility that a new agreement could be reached and implemented before the end of the CBA, going into effect sooner.

That effectively means that NO ONE KNOWS at this point how the next CBA will treat bonus money paid out during this period of time.

Ideally the Patriots, and any other team, would want to know the salary cap rules and structure Brady's contract as well as other contracts (Wilfork, Peppers) accordingly.

Ideally the Patriots and any other team would also want to know that there will be games played after the current CBA expires - i.e. will they have profits by which to pay the guranteed bonuses? But here again, there's no certainty of anything.

All this could serve to drive down the price of free agent inflation - and the uncertainty could actually be a motivator for some players to reach a contract accord to secure guaranteed money at a time when a lockout may be looming.

All in all the waters are very muddy for teams that would prefer to know the rules before agreeing to contracts totaling hundreds of millions of dollars.

In the case of Brady - and maybe even Wilfork - I don't think this does much to change the fact that both parties understand it's in their best interest to reach an agreement asap - in the case of Brady in particular, we want to make sure he is signed before Peyton Manning sets the bar higher in his next contract (even though Manning is a few years older than Brady).

 

[MoLewisrocks]

Re: Can Full Bonus Be Paid in Un-Capped Year...?

Actually there's been some recent news to the contrary:

Post-salary cap, teams will proceed at their own peril | ProFootballTalk.com

I wouldn't take Florio's interpretation of what he thought Aiello told him as news to the contrary. Clearly Aiello is talking about rules to transition from uncapped to capped. There obviously won't be any of those until or unless a new CBA grants them. Just as their won't be any NFL football in 2010 unless a new CBA is struck. For the present, however, the existing expiring CBA is still in effect and any rules in effect within it, including the one stipulating amounts paid in new contracts will be treated as previously detailed except for the 50% rule in addition to existing amortization rules and the elimination of cap acceleration, still apply.

Just like when he says there will be no cap ramifications in 2010 for cutting someone, there will also be no extended benefit since there is no cap acceleration in 2010 and cut players will presently continue to impact caps for the remainder of their contract term (specifically to preclude uncapped dumping) unless again there is some language in the new CBA to forgive or mitigate that carryover. That is one reason why Gholston won't be cut this season, the JETS can't eat his entire dead cap (on his $21M in guaranteed money) in the uncapped year. And since they still owe him a significant portion of that guaranteed amount, they might as well keep him as pay him for sitting at home instead of on their bench...

The only ways teams will benefit from the uncapped season relative to getting out from under amortization would be that they could cut players in the final season of their existing deal who had more dead cap due to earlier restructures than they'd have been willing to absorb if there were a cap, or rarely in cases where they have two years left but the final season wasn't used for amortization because it wasn't available at the time the deal was signed (in some seasons there have been less than 6 years available for amortization) and they never used the eventually available years via restructure. Or in the case of a total bust they might prefer to take a lesser hit in the uncapped year and spread the remainder into the potentially capped future as opposed to having to potentially having to absorb it in two chunks again under a reinstated cap. But again, not knowing what that cap will be reinstated at and whether any transitional allowances will be incorporated into a new CBA makes most of those machinations a crap shoot. If it goes down at all there will be much gnashing of teeth... A guy like Polian who predicated his teambuilding plan on ever expanding caps is liable to threaten to sue everyone like he did in 2006 when he was told he couldn't prorate Manning and Harrison's roster bonuses because of the then expiring CBA rules...And Dan Snyder's head my finally explode...and wipe our Shanny's return to glory in the process.

 

[mgteich]

2010 salary can be double 2011 salary without penalty. Any excess is deemd a bonus and is spread over the life of the contract.

 

[pats1]

2010 salary can be double 2011 salary without penalty. Any excess is deemd a bonus and is spread over the life of the contract.

Keep in mind "salary" in this case also includes bonuses.