Info on Seymour's option bonus

[Miguel]

Background - as part of his 3-year extension Seymour was due to get a $18.66 million option bonus. The $18.66M option bonus was actually two option bonuses. The first (6.66M) was due between aug. 4 of this year and march of next year. The second ($12M) is due by March 7, 2007. Ever since John Czarnecki reported on 9/8 that the Pats were under the cap by $10.3 million I have thought that the Patriots paid Seymour the $6.66 million option bonus since that was the only way my numbers came close to his report. A very reliable source confirmed that the Patriots did exercise the $6.66 million option bonus and that it was not converted into a roster bonus.

 

[Pats726]

Great info...would it have been better to have been a roster bonus?? What is the difference...going forward capwise..anything??

 

[RayClay]

Background - as part of his 3-year extension Seymour was due to get a $18.66 million option bonus. The $18.66M option bonus was actually two option bonuses. The first (6.66M) was due between aug. 4 of this year and march of next year. The second ($12M) is due by March 7, 2007. Ever since John Czarnecki reported on 9/8 that the Pats were under the cap by $10.3 million I have thought that the Patriots paid Seymour the $6.66 million option bonus since that was the only way my numbers came close to his report. A very reliable source confirmed that the Patriots did exercise the $6.66 million option bonus and that it was not converted into a roster bonus.

Always appreciated, Miguel.

Could you translate for the salary cap learning impaired? Can we pay him the other bonus early to use this years cap money?

 

[Miguel]

Great info...would it have been better to have been a roster bonus?? What is the difference...going forward capwise..anything??

Before the exercise of the $6.66 million option bonus, the $18.66 million was being prorated over the 3 years of the extension (2007/2008/2009 - $6.22 million per year) and none of it was counting against the 2006 cap. Now 25% of the $6.66 million or $1.65 million is counting against the 2006 cap lowering the cap hits in 2007/2008/2009 by $550,000.

 

[Miguel]

Always appreciated, Miguel.

Could you translate for the salary cap learning impaired? Can we pay him the other bonus early to use this years cap money?

I do not think so. I think that Seymour falls under this rule - " (a) The contract of a Veteran Player may not be renegotiated to increase the Salary to be paid to the player during the original terms of the contract for a period of twelve months after the player’s most recent contract renegotiation. ". His contract was renegotiated in April, 2006.

 

[BradyManny]

Before the exercise of the $6.66 million option bonus, the $18.66 million was being prorated over the 3 years of the extension (2007/2008/2009 - $6.22 million per year) and none of it was counting against the 2006 cap. Now 25% of the $6.66 million or $1.65 million is counting against the 2006 cap lowering the cap hits in 2007/2008/2009 by $550,000.

With 10 mill free, why don't they just pay off all 6.6 mill this year?

 

[Miguel]

With 10 mill free, why don't they just pay off all 6.6 mill this year?

A question better addressed to BB and Scott Pioli.

 

[BradyManny]

A question better addressed to BB and Scott Pioli.

In your opinion, is that still a possibility at this point(absorbing more of hit)?

I have been adamant for quite some time that this roster is good enough to win the Super Bowl and that what is best for the team in the long term is to use the free cap space to absorb cap hits for its two megastars. I would be shocked if that space went unused this season. It just doesn't make any sense.

But then again, I basically no nothing about salary cap.

 

[Miguel]

In your opinion, is that still a possibility at this point(absorbing more of hit)?

I do not think that it is possible for the Patriots to further increase Seymour's 2006 cap number.

 

[Fencer]

Miguel, Have you posted an estimate anywhere of how much the Pats could easily pull cap money forward on existing contracts, as opposed to: 1. True new contracts? 2. The mid-season unrealistic LTBE incentives trick?

 

[RayClay]

I do not think that it is possible for the Patriots to further increase Seymour's 2006 cap number.

Miguel, Jonathan Kraft has said more than once that all the cap money will be spent.

Why is he so confident when many think this will be difficult to do? (in a logical manner).

 

[MoLewisrocks]

In your opinion, is that still a possibility at this point(absorbing more of hit)?

I have been adamant for quite some time that this roster is good enough to win the Super Bowl and that what is best for the team in the long term is to use the free cap space to absorb cap hits for its two megastars. I would be shocked if that space went unused this season. It just doesn't make any sense.

But then again, I basically no nothing about salary cap.

Once they amortize bonus money onto the cap is is like super glue - you are stuck with it where you put it. Spending down the two top contracts is only one way to skin a cat. Obviously they know a lot about the salary cap. They can LTBE some of it and they likely plan to try to do some extensions which could include Koppen, Samuel or Graham. And if they work out as they appear poised to, and because they are on very inexpensive 2 year deals, they might want to extend Caldwell and/or Gabriel to insure they have some relatively inexpensive stability including the rookie at WR for the next 3-4 years. And there is still the October trading deadline in a new atmosphere where trades are more doable because the cap acceleration on remaining bonuses has been eased somewhat for the trading team.

I have faith they will do with it what is best in their view which is a lot more informed than any of ours.

 

[PatsFanInVa]

As always, I'm glad to echo faith in the Pats' FO, and Mo, good point about the climate being very different regarding trades. Miguel, while being a great capologist and much more learned than me, is also admirably circumspect about irresponsible speculation. Not so me!

Irresponsible speculation: If they were honest, BB and SP would mention the notion of risk management prominently, in explaining their positions.

Making cap room in a later year, out of today's "leftover" money, is one goal. Managing risk is another. We can categorize risk til the cows come home -- declining performance; injury, routine; injury, career-ending; etc., etc., etc. Anything bad that can happen in the future is risk.

When money is paid up front, you load that risk on the organization. When you load that money differently, you distribute that risk to the player.

Let's say you have a guy you can pay $1m to build a house. You can pay it all to him on Tuesday, then try to enforce the contract; or, you can hold the $1m until the house is built to your satisfaction. Which do you do? Load the risk on the contractor, to incentivize performance.

That's one basic tension involved in these contracts. Everybody wants the risk loaded onto the other guy... and paying up front for medium talent-level, unknown long-term motivation guys (front-loading risk,) is much less appealing than in the Seymour or Brady cases (high reward is much more established.)

Hope I'm neither overemphasizing the risk-management aspect out of my own idle speculation, or on the other hand, stating the obvious too very much.

PFnV

 

[Belisarius]

Miguel, Have you posted an estimate anywhere of how much the Pats could easily pull cap money forward on existing contracts, as opposed to: 1. True new contracts? 2. The mid-season unrealistic LTBE incentives trick?

Count me in as being very curious on these two points (and also since I haven't seen it specificall confirmed, is the LTBE trick alive and well in the new CBA?)---- even educated guesses would be much appreciated, since we're not liable to get BB or Pioli talking any time soon.

 

[14thDragon]

A question better addressed to BB and Scott Pioli.

Would they tell us if we did ask?

Lets face it, none of us have a really good idea what has been spent or will be spent, because frankly, they do not have to tell us, so they won't.

 

[BelichickFan]

Beli, how about sticking around a while ?

I'm definitely hoping some of the leftovers can go to Graham and especially Koppen. Samuel and TBC I'm less concerned about. With the whole OL signed except for Koppen, I'm hoping he'll decide he wants to stick around with his boys - especially now he sees who (Maroney) he'll get to block for; and we all know how OL love to run block over pass block.

The other thing I'm like them to do, if they can, is give Brady a big ($6M or so if none of the upcoming UFA are re-signing) roster bonus now and take off the equivalent amount from upcoming years, whether $1M a year for 6 years or $2M a year for 3 years starting in 2009. It's about then that the guys we REALLY want to stay become UFA. Maroney, Seymour, Wilfork, Warren, they all become UFA in the 2008 - 2010 range. I'd love to have Brady's # down for those out years to sign our studs.

 

[Flying Fungi]

Would they tell us if we did ask?

Lets face it, none of us have a really good idea what has been spent or will be spent, because frankly, they do not have to tell us, so they won't.

actually, to a certain degree, financials have to be reported

and quite frankly, I'd say that Miguel and a few others have a damned good idea of where the financials are...at least from my perspective...

 

[Miguel]

Miguel, Jonathan Kraft has said more than once that all the cap money will be spent.

Did he say "spent" or "used"??

There is a big difference.

 

[patchick]

The other thing I'm like them to do, if they can, is give Brady a big ($6M or so if none of the upcoming UFA are re-signing) roster bonus now and take off the equivalent amount from upcoming years, whether $1M a year for 6 years or $2M a year for 3 years starting in 2009. It's about then that the guys we REALLY want to stay become UFA. Maroney, Seymour, Wilfork, Warren, they all become UFA in the 2008 - 2010 range. I'd love to have Brady's # down for those out years to sign our studs.

I see your point, but at the same time a dollar is a dollar regardless of whose name is attached. So if they front-loaded contracts for the likes of Koppen and Samuel or even Gabriel instead, it's still roughly the same savings three years down the line. And it's far better for the team because you've actually added new long-term players rather than just shuffling money around. (Not to mention spreading around the benefits in the clubhouse--don't you think there would be some grumbling if the way the Pats spent their cap excess was just to give it all to Brady?)

On a side note, I suspect that Brady's slice of the pie won't look so unreasonable in three years, given the level the cap should reach by then.

 

[BelichickFan]

I see your point, but at the same time a dollar is a dollar regardless of whose name is attached. So if they front-loaded contracts for the likes of Koppen and Samuel or even Gabriel instead, it's still roughly the same savings three years down the line.

That's fine with me if they do it but there's no guarantee they'll agree on the total dollar amount with upcoming FA. Whereas with Brady the total dollar amount is fixed and it's just a matter of how it's paid out. Sure, I'd prefer to re-sign, say, Koppen. But if no-one's signing, the Brady option is one I like.

On a side note, I suspect that Brady's slice of the pie won't look so unreasonable in three years, given the level the cap should reach by then.

I agree - but whether it looks reasonable or not is irrelevant - it can always look better if it's paid down early