Colts over cap by $6M

[mikey]

http://www.indystar.com/apps/pbcs.dll/article?AID=/20060302/SPORTS03/603020441/1004/SPORTS


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[skri65]

looks like no edge on the colts roster next year

 

[flutie2phelan]

The ruling referred to was very important ... as an explanation to many fans, here and elsewhere, who wondered how Polian was levitating his payroll.

He took his shot. He might have garnered a ring or two for it. But he didn't. And the ploy crashed.

 

[Patsfanin Philly]

The ruling referred to was very important ... as an explanation to many fans, here and elsewhere, who wondered how Polian was levitating his payroll.

He took his shot. He might have garnered a ring or two for it. But he didn't. And the ploy crashed.

Speaking of the cap and to paraphrase Peyton,"Let's just say we had some problems with the proJection."............

 

[FreeTedWilliams]

Don't worry Polian has just convinced the "competition committee" to give the Colts a 10 million dollar slary cap exemption, due to the fact that Ty Law was holding Marcus Pollard in the 2003 AFC Championship game.

 

[MoLewisrocks]

That was this mornings position. Since tendering Mathis and June they are now apparently over by $10M+.

 

[Miguel]

The ruling referred to was very important ... as an explanation to many fans, here and elsewhere, who wondered how Polian was levitating his payroll.

He took his shot. He might have garnered a ring or two for it. But he didn't. And the ploy crashed.

According to John Clayton's blog the Colts may have found a workaround -. convert the roster bonuses into option bonuses.

Clayton says - "Don't ask what the difference is. There really isn't much of a difference."

 

[Patsfanin Philly]

According to John Clayton's blog the Colts may have found a workaround -. convert the roster bonuses into option bonuses.

Clayton says - "Don't ask what the difference is. There really isn't much of a difference."

I thought that's what the special master decided and that decision accelerated the cap hit making "it's time to pay the piper" sooner rather than later........

 

[Miguel]

I thought that's what the special master decided and that decision accelerated the cap hit making "it's time to pay the piper" sooner rather than later........

Not according to Clayton's blog. According to it the decision was about roster bonuses.

 

[hwc]

Actually, I think the Special Master's ruling was about the 30% rule.

You already know this, but for others playing along at home:

It's relevant because, for cap purposes, a roster bonus is counted as "salary" in the year it is paid. However, if you convert a roster bonus to a signing bonus so you can prorate it over four years, it no longer counts as current year "salary" when calculating compliance with the 30% rule.

I don't see how option bonuses are going to help the Colts. Option bonuses are treated just like signing bonuses and prorated. Thus, they wouldn't count as "salary" for 30% rule calculations either.

The bind the Colts are in is that Manning and Harrison don't have enough salary this year (the final cap year) relative to their salaries in the next three uncapped years.

Whatever the salary is this year, it can only increase 30% per year over the following three years. Thus, you can't have Manning's "salary" (actual salary plus roster bonus) be $1 million this year and $11 million next year.

 

[fgssand]

I have heard that there is actually no penalty on the books for teams over the cap. It is all at the discretion of the commissioner.
If the Colts are allowed to get away with being over the cap - whatever the number may be, what's the use??

I really cannot stand Polian.

 

[AdamJT13]

I don't see how option bonuses are going to help the Colts. Option bonuses are treated just like signing bonuses and prorated. Thus, they wouldn't count as "salary" for 30% rule calculations either.

Option bonus prorations DO count for the 30 percent rule, as stated in the CBA.

Any amount specified to be paid for the exercise of an option by a Club to extend the term of a Player Contract shall be treated as signing bonus, pro-rated over the remaining term of the contract commencing in the League Year in which it is exercised or the last League Year in which the option may be exercised, whichever comes first. Such an option amount shall, immediately upon execution of the contract, renegotiation or extension, be included in any calculation for purposes of the 25% Rule for Rookies, set forth in Article XVII, Section 4(e) of the CBA, and/or the 30% Rule, set forth in Article XXIV, Section 8 of the CBA, pro-rated over the remaining term of the contract commencing in the last League Year in which the option may be exercised.

 

[hwc]

Then, the language would mean that Manning's $10 million roster bonus becomes an option bonus and would be calculated as "salary" of $2 million per year for each of the remaining five years of his contract. $2 million this year and $2 million next year for purposes of the 30% rule doesn't help the Colts much, because the contract would still violate the rule.

 

[Miguel]

Then, the language would mean that Manning's $10 million roster bonus becomes an option bonus and would be calculated as "salary" of $2 million per year for each of the remaining five years of his contract. $2 million this year and $2 million next year for purposes of the 30% rule doesn't help the Colts much, because the contract would still violate the rule.

If I understand correctly how option bonuses are treated in the 30% rule, the prorated option bonus amount (in Manning's case (2.25 million (9 million divided by 4) is considered as salary. So Manning's salary increases would be limited to 30% of 3.25 million or $975,000. Sure, Manning's compensation in 2009/2010 would be greatly lowered now. But the Colts could release Manning in mid-February 2009 and sign him a week later to a deal that recoups the "lost" money without hurting their cap.

You may want to check out
http://boards.philadelphiaeagles.com/index.php?showtopic=319327&st=200

Start about page 12.

 

[flutie2phelan]

Whatever these exercises in creative contracts mean to thee and to me ...
just like Patriots injury reports, they are clearly artifices
designed to evade the intent of the rules.

Since the ruling is adverse to the chosen people ... upon appeal,
the Competition Committee is sure to overrule the Special Master ...
and naPolian's will be done.

 

[hwc]

If I understand correctly how option bonuses are treated in the 30% rule, the prorated option bonus amount (in Manning's case (2.25 million (9 million divided by 4) is considered as salary. So Manning's salary increases would be limited to 30% of 3.25 million or $975,000.

Right. That's how I see it, too -- assuming that the whole premise is correct. The only problem is that by prorating the option bonus (for 30% rule purposes), you are adding $2.25 million to the 2006 "salary calculation". But, you are also adding $2.25 million to 2007, 2008, and 2009. So, you really haven't done much viz-a-viz the 30% rule except tread water -- especially since Manning's scheduled "salary" for 2007 was already $11 million (base plus roster bonus).

They could play around with the 2007 roster bonus, turning it into an option bonus, too. But, then they are up against the wall on the $11.5 million salary in 2008.

Also, I'm wondering if the league rules allow you to call something an option bonus without actually having it be an "option" for something concrete like additional years added to a contract?

 

[flutie2phelan]

Dropping the sarcasm ... we have a cunning opponent in Mr. Polian.
Look at this:

WAYNE'S DEAL TRACKS 30 PERCENT RULE

We ... frankly don't know whether anyone else has reported the full contract numbers for Colts receiver Reggie Wayne.

Regardless, here they are. And they provide a good example of how the 30 percent rule is factoring into the negotiation of contracts in the last capped year of the CBA.

The signing bonus, as reported elsewhere, was $12.5 million. Initial reports pegged it at $13.5 million.

But signing bonus doesn't count for the purposes of determining the application of the 30 percent rule. The key number is his 2006 salary of $2.6 million. This means that the deal cannot increase in 2007 or beyond by more than $780,000 in any one year.

In 2007, Wayne's base salary moves to $3 million and he gets a roster bonus of $380,000, putting him at total pay of $3.38 million, which represents a $780,000 increase over his 2006 pay.

In 2008, his salary goes to $3.5 million and he receives a roster bonus of $660,000. This puts him at $4.16 million, for a $780,000 increase over his 2007 pay.

Ditto for 2009, when his base salary is $4.94 million, exactly $780,000 more than his 2008 pay.

The deal concludes with salaries of $5.47 million in 2010 and $5.95 million in 2011. Under the 30 percent rule, the contract could have promised a max of $5.72 million in 2010 and $6.5 million in 2011.

- Edited extract from profootballtalk.com

 

[hwc]

How shrewd you think Polian is depends on how you view the following cap numbers for a #2 wide receiver when you already have the highest paid WR in football on your roster:

Wayne's cap numbers

2006: $5.8 million
2007: $6.5 million
2008: $7.3million
2009: $8.1 million

 

[flutie2phelan]

Works for them, don't it?

Should we perhaps view it as ... raising the bar?

David Givens, answer your phone!

 

[AdamJT13]

If I understand correctly how option bonuses are treated in the 30% rule, the prorated option bonus amount (in Manning's case (2.25 million (9 million divided by 4) is considered as salary. So Manning's salary increases would be limited to 30% of 3.25 million or $975,000. Sure, Manning's compensation in 2009/2010 would be greatly lowered now. But the Colts could release Manning in mid-February 2009 and sign him a week later to a deal that recoups the "lost" money without hurting their cap.

Manning likely wouldn't agree to drastically reduced salaries. They can actually give him more money this season and almost identical amounts of money through each season of his contract and still save more than $2.2 million of cap room by giving him a base salary of $5.55 million and an option bonus of $8.95 million. To save more cap room than that, they'd have to get him to accept less money overall, perhaps in exchange for more guarantees.