Dead money question

[patsfaninpittsburgh]

Re: FYI... Miguel

Personally I have always thought that the teams in states with no income taxes would have a huge advantage recruiting free agents, because their net income would be so much higher. But in reality it seems to have virtually no impact on where free agents go. If it did then the top free agents would annually end up with the Dolphins, Bucs, Jaguars, Texans and Cowboys - and historically that has simply not been the case.

This will be determined by a number of factors.

Money is a part of it. No state taxes was a factor for Lebron over NY. The point is they can offer like money and a 5-10% better net isn't chump change. Also, if the Jets money was more than sat, I would have thought he would have signed.

However, the Cowboys offering as big if not bigger stage is probably more important.

 

[upstater1]

Re: FYI... Miguel

To be fair to everyone, I think you have to use the later cutoff, since a lot of teams refrained from releasing folks precisely because they didn't know what the cap ramifications might be.

It still wouldn't be fair to everyone since it allows teams prone to making bad deals to get rid of their bad contracts and it levels the playing field between them and teams like the Patriots.

One thing people tend to forget about higher state taxes is that they are written off from federal taxes. so say I'm paying 6% in New York state and that's much worse than say an average of 3% elsewhere. In actuality, because of the federal writeoff, the tax is only 2% higher.

2% of 10 million is $200k.

Not that big a deal.

 

[patsfaninpittsburgh]

Re: FYI... Miguel

It still wouldn't be fair to everyone since it allows teams prone to making bad deals to get rid of their bad contracts and it levels the playing field between them and teams like the Patriots.

One thing people tend to forget about higher state taxes is that they are written off from federal taxes. so say I'm paying 6% in New York state and that's much worse than say an average of 3% elsewhere. In actuality, because of the federal writeoff, the tax is only 2% higher.

2% of 10 million is $200k.

Not that big a deal.

The $200K in your example needs to be compared to the after tax. A 40% effective tax rate means a $200K saving compared to a $6 million "takehome".

 

[patsfan13]

Re: FYI... Miguel

The $200K in your example needs to be compared to the after tax. A 40% effective tax rate means a $200K saving compared to a $6 million "takehome".

State taxes in NJ are 10% in his bracket, not sure of Ny State but if he lives in NYC that would be ~6% IIRC, sp the diff could be substantial.

 

[BradyFTW!]

Re: FYI... Miguel - Update on Dead Cap Money Topic

I just read this from Broncos writer Dave Krieger:



LINK

Were you aware of this? I don't believe the Patriots have a ton of dead money, but figured I would pass it along.

Wait, so a player who gets cut today won't count as dead money this season, even though it would be for bonus money that was already paid?

In other words, if the Pats signed warren to the exact same 2011 base salary that they just cut him from, the same day that they cut him, they'd magically save $2.5 million against the cap (his pro-rated signing bonus)?

 

[PatsWickedPissah]

Re: FYI... Miguel - Update on Dead Cap Money Topic

I think that is what could be happening.
Remember BB this AM said they's had LOTS of questions asked of the league office.
Heh!

 

[MoLewisrocks]

Re: FYI... Miguel - Update on Dead Cap Money Topic

In some cases maybe, but Warren has said he won't be back. Said team is moving in another direction.

 

[MoLewisrocks]

Re: FYI... Miguel - Update on Dead Cap Money Topic

Here is what PFT is saying about dead cap:

We’ve seen that there is a lot of confusion out there about how player cuts impact salary cap situations this year.

Here’s the key thing to remember: If a player is cut or traded now, their entire salary cap hit comes off the books for 2011. The old “June 1″ rule applies.

So when Cowboys receiver Roy Williams was cut, the pro-rated bonus money got pushed to next year’s cap. (They’ll have over $20 million pushed to next year.

But the Cowboys get big-time savings right now with the moves. Which in turn helps them go after Nnamdi Asomugha. That is all.

A note on salary cap savings | ProFootballTalk

So it would seem that the March rule still only benefits teams who rolled the dice one would. That dead cap was wiped out. This dead cap will await in 2012. Although if things like LTBE still exist you could theoretically roll any leftover space foreward at the end of this season to help mitigate that. Not sure what the old June 1 rule has to do with it. That dealt with a teams ability to divide the remaining dead cap between current and future year as opposed to absorbing it all in the current year.

 

[patsfan13]

Re: FYI... Miguel - Update on Dead Cap Money Topic

I don't think anyone outside the league office/ teams front offices knows all the implications of the dead money issue, perhaps all the dead money comes off comes off since the 2011 league year hasn't started yet ie counts against the 'uncapped' year.

For the time being Miguel's figures may not be relevant until the details of the CBA are understood.

Crazy week and the league doesn't start till next week!

 

[DaBruinz]

Re: FYI... Miguel - Update on Dead Cap Money Topic

Here is what PFT is saying about dead cap:




A note on salary cap savings | ProFootballTalk

So it would seem that the March rule still only benefits teams who rolled the dice one would. That dead cap was wiped out. This dead cap will await in 2012. Although if things like LTBE still exist you could theoretically roll any leftover space foreward at the end of this season to help mitigate that. Not sure what the old June 1 rule has to do with it. That dealt with a teams ability to divide the remaining dead cap between current and future year as opposed to absorbing it all in the current year.

The problem with what PFT says is that the June 1st cuts didn't push ALL the money into the following year. It split it with any SB amortization for the current year staying and any remainder from later years going into the following year.

So, Ty Warren would count $2,520,830 on this year's cap and 2,750,014 on next year's cap. That is significantly different that counting 5.2+ million on next year's cap and nothing this year.

 

[Fencer]

Re: FYI... Miguel - Update on Dead Cap Money Topic

I'm GUESSING that what's going on here is:

• In most respects, salary cap rules are in place as usual.
• However, FOR THIS YEAR ONLY, the "dead money" cap hit from certain cuts is reduced to $0.
• Those cuts include ones made this week (e.g., Warren, Kaczur, et al.)
• This exemption may not apply if the guy stays with the team after being cut. For if it does, lots of deals could be "restructured" to create cap space.

I would further guess that that cap space will be usable to restructure deals and pull cap hits FORWARD from future years, should teams choose. I also would guess that teams won't feel the need to do this; rather, they can get away with doing less back-end loading than usual, due to having some extra cap space.

 

[Scott37]

By cutting Warren prior to the start of the new league year, does his dead money become forgiven by the new CBA?

 

[MoLewisrocks]

By cutting Warren prior to the start of the new league year, does his dead money become forgiven by the new CBA?

No. But it reportedly doesn't count this season. It counts in 2012. When with a tru up (mechanism that adjusts cap to match revenue) the cap will be higher (CBA says it cannot be lower) and could be a lot higher because it's now tied to revenue and not revenue projections. And if the way the salary cap operates remained essentially the same as the NFL has stated it did then teams could use mechanisms like LTBE to move any unused cap space forward to help mitigate their 2012 dead cap. In the meantime, more room is available and flexibility is important in season.

 

[MoLewisrocks]

Re: FYI... Miguel - Update on Dead Cap Money Topic

The problem with what PFT says is that the June 1st cuts didn't push ALL the money into the following year. It split it with any SB amortization for the current year staying and any remainder from later years going into the following year.

So, Ty Warren would count $2,520,830 on this year's cap and 2,750,014 on next year's cap. That is significantly different that counting 5.2+ million on next year's cap and nothing this year.

Again, like I said I think his tying it to the June 1 rule was not correct. He was trying to make sense of how/why it's being done. I think the league simply tweeked the CBA over the last few days to appease a lot of teams whose noses were out of joint due to the forgiveness of deadcap being tied to March 11. And that would not be an issue for the NFLPA since they want the haves to have cap space too. But it does seem to be getting gradually reported that teams are getting a break on dead cap this year by being allowed to push it all into 2012.

Miguel needs to dig around among his contacts. Unfortunately as I also said earlier, the media seems to be so wrapped up in re-tweeting each other and speculating on FA that they have dropped the ball on the transition rules which even BB acknowledged this week are changing and being interpreted differently as teams raise issues and questions. Remember, what the sides agreed on was a draft and there is always a little remaining clarification once final language changes are finalized.

 

[DaBruinz]

Re: FYI... Miguel - Update on Dead Cap Money Topic

Again, like I said I think his tying it to the June 1 rule was not correct. He was trying to make sense of how/why it's being done. I think the league simply tweeked the CBA over the last few days to appease a lot of teams whose noses were out of joint due to the forgiveness of deadcap being tied to March 11. And that would not be an issue for the NFLPA since they want the haves to have cap space too. But it does seem to be getting gradually reported that teams are getting a break on dead cap this year by being allowed to push it all into 2012.

Miguel needs to dig around among his contacts. Unfortunately as I also said earlier, the media seems to be so wrapped up in re-tweeting each other and speculating on FA that they have dropped the ball on the transition rules which even BB acknowledged this week are changing and being interpreted differently as teams raise issues and questions. Remember, what the sides agreed on was a draft and there is always a little remaining clarification once final language changes are finalized.

Mo - If you look around, I've said that we just don't know how it's being done so it's all speculation. I've heard 3 different things.

1) Old June 1 Rules
2) Old June 1 Rules, but 2011 is washed
3) All dead money pushed to 2012..

The problem I see with all dead money being pushed to 2012 is that there league won't be able to meet the 99% revenue that they stated.. That's why I think it's either of the 1st two options I mentioned.

 

[Miguel]

My guess is that this is how it goes.
if a player was released before 3/11/11 no dead money at all in 2011.
if a player was released after 3/10/11 2011 dead money consists of 2011 signing bonus proration and some offseason workout bonus money.

NFL's transition rules allow Vikings to clear more cap space with cuts | 1500 ESPN Twin Cities ? Minnesota Sports News & Opinion (Twins, Vikings, Wolves, Wild, Gophers)

Denver Broncos Won't Count "Dead Money" Towards 2011 Salary Cap Figure - Mile High Report

FYI - Correll Buckwalter was just released.

 

[DaBruinz]

My guess is that this is how it goes.
if a player was released before 3/11/11 no dead money at all in 2011.
if a player was released after 3/10/11 2011 dead money consists of 2011 signing bonus proration and some offseason workout bonus money.

NFL's transition rules allow Vikings to clear more cap space with cuts | 1500 ESPN Twin Cities ? Minnesota Sports News & Opinion (Twins, Vikings, Wolves, Wild, Gophers)

Denver Broncos Won't Count "Dead Money" Towards 2011 Salary Cap Figure - Mile High Report

FYI - Correll Buckwalter was just released.

Thank you for the update Miguel..

 

[Miguel]

Further support for my position.

Five thoughts on Lofa Tatupu's situation - NFC West Blog - ESPN

It will count $1.1 million after releasing Tatupu, with another $2.2 million counting against the cap in 2012