We CAN make the cap room to sign Peppers - Unsubstantianted Claim

[eom]

yeah, I probably screwed up a lot in that -- it's just based off some other posts that I probably misunderstood.

as for the 30% rule, that's about all I planned on for the sake of argument.
I intended this to be essentially all bonus.
although, does the 130% compensation in 2010 include his 2010 bonus monies?
in that case that's another thing I eff'd up --- I thought it was just straight salary to salary.

wouldn't haynesworth's guaranteed 2010 20m bonus get accelerated as a 2009 cap hit??
I thought guaranteed monies next year got accelerated.
anyway, if they snuck around that somehow w/contract language put peppers down for the same thing.
but it's got to be somehow real world guaranteed so he doesn't get cut and lose it.

 

[solman]

2) The $21 mil Option Bonus on the Haynesworth contract is indeed confusing. I know it is guaranteed. So either way Haynesworth gets that money. What's so confusing is wether or not it can be paid all at once in 2010 or wether or not is must be prorated over 5 years. That seemingly minor detail has a huge ramifications in the event of an uncapped year.

Under the current CBA, the cap hit for these types of bonuses are prorated. Its very unlikely that a new CBA would change the rules about this without providing at least some protection to deals struck under the old CBA. You'd be creating a new rule that deliberately screwed a team for actions taken prior to that rule's existence.

3) You also bring up a good point. There is no way solmon's scenario is plausible cause if a new CBA is reached - and it is possible - than that $100 mil payout in 2010 would crush the Patriots financially.

We're talking about a cap hit for Brady, over the course of five years that totals between $110M and $120M. I'm not sure that isn't a fair price for Brady.

The difficulty is that, without a capped year to make up the difference, the Patriots can't sign Brady and Peppers and simultaneously retain the many other key players whose contracts are expiring.

But the total compensation under the deal should represent a fair price for Brady. Therefore the cap hits in the last five years of the deal should average about 20% more than a fair cap hit for Brady (The first year only costing an extra $1M means that its hit must be getting spread out over the other five.)

 

[solman]

yeah, I probably screwed up a lot in that -- it's just based off some other posts that I probably misunderstood.

as for the 30% rule, that's about all I planned on for the sake of argument.
I intended this to be essentially all bonus.
although, does the 130% compensation in 2010 include his 2010 bonus monies?
in that case that's another thing I eff'd up --- I thought it was just straight salary to salary.

wouldn't haynesworth's guaranteed 2010 20m bonus get accelerated as a 2009 cap hit??
I thought guaranteed monies next year got accelerated.
anyway, if they snuck around that somehow w/contract language put peppers down for the same thing.
but it's got to be somehow real world guaranteed so he doesn't get cut and lose it.

The Haynesworth deal DOES appear to be drafted on the basis of Article XXIV Section 8(d) applying. In other words, the option bonus IS being considered towards the 30% rule (in the mind of the drafter). That said, it should be possible to easily circumvent section 8(d) due to the very narrow language used in that section.

The "guaranteed" option does not get accelerated because it is not considered to be guaranteed within the meaning of the CBA, an interpretation that is backed up by well established precedent.

 

[RoughingthePasser]

AP source: Peppers would like to be a Patriot - NFL - Yahoo! Sports

 

[Shockt327]

First, recognize that its his agent's job to make the argument that he shouldn't walk away from money.

Even you disagree about an agents proper role, we should at least be able to agree that the agent is compensated as if it is his job to maximize the expected value of a player's earnings.

The agent would be 'walking away from money' by allowing his client to play for the Franchise tender. We are talking about guaranteed money. You get more of it under contract. That's a fact. You seem to be under the impression that a player loses money by signing a deal that has a cap figure that's less than the Franchise tender. That's not how it works. They don't lose money, because the guaranteed money is greater and it is long term. Nobody wants to play under the Franchise tag. Sure, you gain money over one year. But you lose money long term. You also open yourself up to injury risk.

Again, if Players and Agents didn't mind the idea of playing under the tag, we'd see far less complaining about it.

That said, let me make the agent's case based on a seven year deal at $7/year.

No. This isn't even rational. You are taking the total money and simply diving it by the years to get the cap figure. Do I seriously have to tell you that's not how contracts work? Not to mention the terms aren't what I'm arguing. I want a 4 year deal worth around 40 mil, with a loaded 2010 - not a seven year deal that is actually a seven year deal. There is no way a 29 year old player will get a true 7 year deal. That's nuts. If Peppers gets a 7 year deal - it will be filled with backloaded funny money. Just like the Haynesworth deal. Ya know, the one that I've been talking about? The one that comes with a very reasonable 7 mil cap figure in 09? The one that is actually a 4 year 47 mil deal? That's the precedent that should be applied here.

Tell me, did Haynesworth "lose money" on his deal?

If Peppers takes the money, he gets $17M, plus whatever the market gives him (in an uncapped year) for the next six.

If he signs a $7M/year deal, he gets $49M.

For him to be losing $40M, the six year deal would have to pay (49+40-17)/6 = $12M/year.

Again, you are tossing around numbers instead of using actual precedents.

Dwight Freeney signed a deal for $12M/year when the salary cap was $109M when he was looking at his first franchise tag for $8.64 million (I took that from an online report that may have been wrong because the tag may have been exclusive)

Ah, an actual precedent! You are aware Freeny's contract is backloaded to high hell, right?

First off, The Franchise tag was 9.43 mil for Freeney that year. Second, The Colts were also in a financial bind. They were literally 3 mil under the cap with Freeney Franchised - barely enough to sign draft picks. So they gave Freeney a whopping 6 year 72 million deal. By your logic (division, lol ) that's 12 mil per year. Sorry. That's not how it works - at all. Freeney has yet to make 12 mil in a single year. In fact, 2009 - 3 years into the deal - is the first year he'll even sniff that kind of money.

The Breakdown:
Year - Cap Figure
2007 - 5,750,000
2008 - 5,750,000
2009 - 11,220,000
2010 - 13,680,000
2011 - 16,130,000
2012 - 19,470,000


Look it up on Colts cap.
Colts Salary Cap - Colts Cap

Better yet read the article from Len Pasquarelli:

League salary documents reviewed on Saturday evening by ESPN.com show that not until the 2009 season, when the cap charge skyrockets to $11.22 million....But for 2007 and 2008, the salary cap charges are a palatable $5.75 million each year....The base salaries in the contract are $750,000 (for 2007), $750,000 (2008), $6.22 million (2009), $8.825 million (2010), $11.42 million (2011) and $14.035 million (2012).

Freeney's deal cap friendly for 2007, 2008 - NFL - ESPN

Peppers (who I think is a better player) would probably be signing a deal in an uncapped year (one year after the cap rose to $127) unconstrained by the Franchise tag.

No. He's still be constrained by the Franchise tag. If he goes back to Carolina to play in 09, they'd just tag him again in 2010 - with no cap to worry about. Thus giving Peppers even more incentive to get out now.

Do I think he could get a lot more than $12M/year? Hell yeah.

Like what? The same 19 million Freeney is getting in the 6th year of his contract? That's not real money. The only way he gets 12 mil is if it's after a low starting year - just like Freeney, just like Haynesworth.

We can quibble about guaranteed money (which is important, but which complicates the discussion without making anything clearer) and the risk of injury, but my point is that any deal which values Peppers at $7M/year is massively underpaying him. It is absolutely his agent's job to keep him from doing this.

I'm sorry, guaranteed money isn't something you "quibble over" in a contract discussion. Guaranteed money is the discussion. You don't turn your back on it for the Franchise tender. You also don't calculate it by taking the sum and dividing it by the total years. You have to look at how the guaranteed money is structured - you didn't do that.

Giving a discount to the Patriots is a reasonable and smart thing to do. But it should be a modest discount, not a blue light special.

Again, you overestimate the real value of the contract. When you break down the numbers you'll see how contracts are structured. It's hardly ever as simple as doing simple division.

 

[solman]

The agent would be 'walking away from money' by allowing his client to play for the Franchise tender. We are talking about guaranteed money.

Guaranteed money complicates this discussion immensely. There are many different ways to structure the guaranteed money in a $7M/year contract. ALL of them are a bad deal for Peppers.

Tell me how the "realistic" $7M/year contract that you want Peppers to sign is structured, and I'll show you why its a terrible idea.

Ah, an actual precedent! You are aware Freeny's contract is backloaded to high hell, right?

The Breakdown:
Year - Cap Figure
2007 - 5,750,000
2008 - 5,750,000
2009 - 11,220,000
2010 - 13,680,000
2011 - 16,130,000
2012 - 19,470,000

You keep making the error of using cap dollars in a discussion about whether or not a contract is good for a player. Players could care less about the cap. What they care about is compensation in real dollars.

Dwight Freeney banked $37.72M during the first three years of his contract. Thats $12.5M per year. Dwight Freeney's contract wasn't backloaded, it was frontloaded.

The numbers are in the Pasquarelli article you linked.

 

[Shockt327]

Guaranteed money complicates this discussion immensely. There are many different ways to structure the guaranteed money in a $7M/year contract. ALL of them are a bad deal for Peppers.

No they aren't. See Freeney's deal. See Haynesworth's deal.

Tell me how the "realistic" $7M/year contract that you want Peppers to sign is structured, and I'll show you why its a terrible idea.

Again, look at the first few years of the Haynesworth deal. Also the burden of proof is on you to show me why playing in Carolina under the Franchise tender makes sense - and under what realistic scenario Peppers would lose 40 mil? Scratch that - we'll get to that later.

You keep making the error of using cap dollars in a discussion about whether or not a contract is good for a player. Players could care less about the cap. What they care about is compensation in real dollars.

That's not an error. Cap dollars are inevitably tied to how these contracts are structured. Which is why you are having a hard time explaining things in terms of three year averages - instead of looking at the actual breakdown. Also, the conversation isn't about what's best for Peppers in an ideal situation. The conversation is about whether or not staying in Carolina for another year at $17 is better than being under contract with NE right now - so yeah, cap dollars do matter.

Dwight Freeney banked $37.72M during the first three years of his contract. Thats $12.5M per year. Dwight Freeney's contract wasn't backloaded, it was frontloaded.

Saying that Freeney made $12.5 per year is horribly misleading - especially within the context of this argument. There is a big difference between actually making 12.5 million per year for 3 years, and averaging 12.5 million on a contract that sees the cap hit double during the 3rd year. Structure is everything. Three year averages are irrelevant when contracts spike so dramatically. What matters - especially in relation to Peppers for purpose of this convo - is that the first year was low and then the contract went high. That's what our discussion pertains to. That's how it would work in an uncapped year. That's how we'd want it to work with Peppers in NE.

You say that that kind of contract would mean "losing 40 million." That's simply not true. He'd never see that money. And it's a hell of alot better than signing the Franchise Tender, playing in Carolina for 2009, and being in an even worse situation for 2010. You want to play for a contender that is better than Carolina? Heh. The rule of 8 will make that difficult. Hell, good luck even hitting the open market at all - Carolina would be more than happy to use the Franchise tag again in 2010 cause there is no cap. Now it's 2011, there is either a new cap or no football - and oh yeah, Peppers is now 31. Bit trickier to get top dollar then. What a difference two years makes.

 

[solman]

No they aren't. See Freeney's deal. See Haynesworth's deal.

Neither Haynesworth's deal nor Freeney's deal even remotely resemble a $7M/year deal. Not in terms of cash. Not in terms of salary cap.

If you show me what you consider to be a realistic deal that pays an average of $7M/year, I'll do the math for you.

It makes no sense for me to try and guess what you consider to be "realistic".

That's not an error. Cap dollars are inevitably tied to how these contracts are structured. Which is why you are having a hard time explaining things in terms of three year averages - instead of looking at the actual breakdown. Also, the conversation isn't about what's best for Peppers in an ideal situation. The conversation is about whether or not staying in Carolina for another year at $17 is better than being under contract with NE right now.

Peppers has to decide whether or not signing your "realistic" contract is better or worse than getting a guaranteed $17M for one year of play. Are you seriously trying to tell me that PEPPERS is using CAP dollars to make this decision?

REAL players make REAL decisions about where to play based on REAL money. Julius Peppers is not going to substitute Cap dollars for real dollars when he makes his decision.

Saying that Freeney made $12.5 per year is horribly misleading - especially within the context of this argument. There is a big difference between actually making 12.5 million per year for 3 years, and averaging 12.5 million on a contract that sees the cap hit double during the 3rd year.

Cap? Why would Dwight Freeney care about cap?

Dwight Freeney isn't going on Dr. Phil to complain about women who are only interested in him because he can help them free up cap space.

Dwight Freeney is going on Dr. Phil because he actually received vast amounts of money as part of this contract.

 

[Miguel]

I think that's quite fair.

Still, while I agree that my simplistic version of those contracts is implausible, I think you could apply those same mechanics to drafting an agreement which is also plausible (but decidedly more complicated).

If I actually thought this deal was going to happen, I might be inclined to argue the point

In other words, the Patriots may be able to make the cap room needed to sign Peppers as long as they agree to deals that you do not think that are going to happen.

 

[tanked_as_usual]

Guaranteed money complicates this discussion immensely. There are many different ways to structure the guaranteed money in a $7M/year contract. ALL of them are a bad deal for Peppers.

Tell me how the "realistic" $7M/year contract that you want Peppers to sign is structured, and I'll show you why its a terrible idea.



You keep making the error of using cap dollars in a discussion about whether or not a contract is good for a player. Players could care less about the cap. What they care about is compensation in real dollars.

Dwight Freeney banked $37.72M during the first three years of his contract. Thats $12.5M per year. Dwight Freeney's contract wasn't backloaded, it was frontloaded.

The numbers are in the Pasquarelli article you linked.

'banking' and what it means to the cap are 2 different things.........freeney could have gotten the entire 37M in the first moment as a signing bonus and it gets spread evenly across the term of the contract.......different thing if it is a roster bonus, but the colts did not have the cap space at the time to do that

 

[solman]

In other words, the Patriots may be able to make the cap room needed to sign Peppers as long as they agree to deals that you do not think that are going to happen.

In other words, between Peppers, Carolina, the Patriots, and the Patriots' players, I think there are too many parties that need to agree on too many things for this type of deal to actually be consummated. No individual step seems prohibitively unlikely, but given everything that has to occur, I think that the end result is quite improbable.

If Carolina removes the tag, I think that Peppers could sign here, but I have a difficult time with this notion of a deal in which they remove the tag and we ship them a pick for... nothing. That would certainly be an interesting precedent.

So unless Carolina decides that $16.7M is too much to pay for one year of service from a player who just doesn't want to be there, I don't see us getting him.

 

[AdamJT13]

Salary:

2009: $1M
2010: $1.3M
2011: $1.6M
2012: $1.9M
2013: $2.2M
2014: $2.5M

2010 guaranteed option bonus: $100M

Annual cap hit:

2009: $1M
2010: $21.3M
2011: $21.6M
2012: $21.9M
2013: $22.2M
2014: $22.5M

Plus you have to add back the amortized bonus already associated with those player's current contracts. But I never counted that money in the first place. I am talking entirely about moving the cap hit associated with their salary.

I haven't waded through this entire thread, but you're award that the contract you proposed violates the 30 percent rule, aren't you?

 

[Ring 6]

In other words, between Peppers, Carolina, the Patriots, and the Patriots' players, I think there are too many parties that need to agree on too many things for this type of deal to actually be consummated. No individual step seems prohibitively unlikely, but given everything that has to occur, I think that the end result is quite improbable.

If Carolina removes the tag, I think that Peppers could sign here, but I have a difficult time with this notion of a deal in which they remove the tag and we ship them a pick for... nothing. That would certainly be an interesting precedent.

So unless Carolina decides that $16.7M is too much to pay for one year of service from a player who just doesn't want to be there, I don't see us getting him.

You are still making no sense. What does removing the tag have to do with it? We need an equal amount of cap room to trade for him as we do to sign him as a FA. Essentially, the trade and the new contract are filed together. You don't need the cap room to cover the tag, just the cap hit the new contract will take.

 

[Return of the Nizz]

You are still making no sense. What does removing the tag have to do with it? We need an equal amount of cap room to trade for him as we do to sign him as a FA. Essentially, the trade and the new contract are filed together. You don't need the cap room to cover the tag, just the cap hit the new contract will take.

I keep seeing people claiming this, but it isn't true. As a procedural point, he needs to sign with Carolina in order to be traded to the Pats. The Pats then can't sign him to a new contract until after they have traded for him.

This is exactly what happened when they traded for Moss. They had to clear cap space to bring him in and then re-worked his contract. You can't go over the cap, even if it's for 6 seconds until you file the new contract.

 

[solman]

I haven't waded through this entire thread, but you're award that the contract you proposed violates the 30 percent rule, aren't you?

My understanding is as follows:

1. The 30% rule does not include "amounts treated as signing bonus" as defined by XXIV 7(b)(iv).

2. XXIV 8(d) overrides this by including the prorated portion of options to "extend the life of a player contract" starting from the moment when the contract is signed.

3. There is enough difference between the language in 7(b)(iv) and 8(d) to drive a truck through.


It looks to me like the treatment of deals including uncapped years was actively negotiated over, and that this "loophole" is one of the results. [I especially liked the language in 8(c), which may hint as to just how contentious an issue this was]


Is this understanding correct?

 

[solman]

You are still making no sense. What does removing the tag have to do with it? We need an equal amount of cap room to trade for him as we do to sign him as a FA. Essentially, the trade and the new contract are filed together. You don't need the cap room to cover the tag, just the cap hit the new contract will take.

I agree will Nizz below (in other words, Andy is wrong ) but I don't think the CBA is clearly dispositive on this point.

Andy, do you have any example of a situation in which a team was permitted to do what you describe? (Trade for a player, file a new contract, and only be held accountable for the cap hit under the new contract?)

I would mention Randy Moss as a counter example. If I remember correctly, we had to clear cap room for Randy's old contract, even though we immediately signed him to a new deal with a reasonable cap hit.

 

[Shockt327]

Neither Haynesworth's deal nor Freeney's deal even remotely resemble a $7M/year deal. Not in terms of cash. Not in terms of salary cap.

If you show me what you consider to be a realistic deal that pays an average of $7M/year, I'll do the math for you.

It makes no sense for me to try and guess what you consider to be "realistic".





Peppers has to decide whether or not signing your "realistic" contract is better or worse than getting a guaranteed $17M for one year of play. Are you seriously trying to tell me that PEPPERS is using CAP dollars to make this decision?

REAL players make REAL decisions about where to play based on REAL money. Julius Peppers is not going to substitute Cap dollars for real dollars when he makes his decision.





Cap? Why would Dwight Freeney care about cap?

Dwight Freeney isn't going on Dr. Phil to complain about women who are only interested in him because he can help them free up cap space.

Dwight Freeney is going on Dr. Phil because he actually received vast amounts of money as part of this contract.

Since you didn't even make any new points and just reiterated the same thing as before...I just do the same:

Cap dollars are inevitably tied to how these contracts are structured. Which is why you are having a hard time explaining things in terms of three year averages - instead of looking at the actual breakdown. Also, the conversation isn't about what's best for Peppers in an ideal situation. The conversation is about whether or not staying in Carolina for another year at $17 is better than being under contract with NE right now - so yeah, cap dollars do matter.

 

[Shockt327]

'banking' and what it means to the cap are 2 different things.........freeney could have gotten the entire 37M in the first moment as a signing bonus and it gets spread evenly across the term of the contract.......different thing if it is a roster bonus, but the colts did not have the cap space at the time to do that

Thank you.

The structure of the contract allowed Freeney to make guaranteed money through an option bonus that didn't go on the books till this year. That's huge. It's also puts his alleged "12 million per year" contract in a totally new perspective - cause he has yet to cost the Colts 12 mil.

/cue argument about how cap dollars "don't matter."

 

[Reaper]

I would think he would accept less just to have a chance at winning a ring cause we all know panthers aint gonna be making it there anytime soon.

 

[AdamJT13]

My understanding is as follows:

1. The 30% rule does not include "amounts treated as signing bonus" as defined by XXIV 7(b)(iv).

2. XXIV 8(d) overrides this by including the prorated portion of options to "extend the life of a player contract" starting from the moment when the contract is signed.

3. There is enough difference between the language in 7(b)(iv) and 8(d) to drive a truck through.


It looks to me like the treatment of deals including uncapped years was actively negotiated over, and that this "loophole" is one of the results. [I especially liked the language in 8(c), which may hint as to just how contentious an issue this was]


Is this understanding correct?

Not exactly. There is no loophole around the 30 percent rule. Every dollar is either 1) subject to the 30 percent rule; 2) treated as a signing bonus and prorated, starting in this season; or 3) an NLTBE incentive.