Revis Cap Question

[yopats]

Photo shows Revis' current cap hits and cap hits after converting most of his 2014 salary into a signing bonus.

from Miguel : https://twitter.com/patscap/status/443776759901597696



My Question is what options do they have with converting to a Signing bonus each year or even a portion.

Would love your thoughts on they could navigate this with the expected increases in the cap in 2015 and 2016.

 

[Ring 6]

FYI, Miguel, I think you have a formula error on the top part. Total should be 16mill not 14.5 I believe.

 

[ctpatsfan77]

FYI, Miguel, I think you have a formula error on the top part. Total should be 16mill not 14.5 I believe.

I agree on this; the roster bonus is due Thursday, so any team trading for him today would have to take that on, too.

 

[ctpatsfan77]

from Miguel :
My Question is what options do they have with converting to a Signing bonus each year or even a portion.

Would love your thoughts on they could navigate this with the expected increases in the cap in 2015 and 2016.

While I am not Miguel, Ben Volin et al. have noted that his contract expressly allows the team, at its own discretion, to convert his salary into a signing bonus.

So, as Miguel shows below, they could convert his 2014 salary into a signing bonus, which would reduce his 2014 cap hit to $6.4M, while adding $2.4M in prorated SB each of the next four years. If the Pats were to release him after doing so, they would incur a $9.6M cap hit in 2015 (or split between 2015 and 2016).

They could repeat the process to keep him for 2015 at a cap hit of $9.4M, but that would increase the remaining SB prorations for 2016–2018 to $16.2M.

 

[jmt57]

Re: Calling Miguel: Revis Cap Question

That's one extreme example, bringing the 2014 salary all the way down to $1 million.

You could also do something in between, e.g., making the 2014 salary $3 million; that would move $10mm to bonus over the five years ($2mm per year) and create a 2014 cap number of $8mm but reduce the future year cap numbers to $18mm rather than $18.4.

You could also convert both 2014 and 2015 salaries to signing bonus, in part to reduce the 2015 cap hit - but doing so increases the dead money if he is cut prior to 2018, and also increases the cap number in 2016-18. If you make his base salary $1 million in both 2014 and 2015 and convert the remainder ($12 million from 2014 and $12 million from 2015) to a signing bonus, then the prorated signing bonus for each of those five years is now $4.8 million. That makes the cap hit in both 2014 and 2014 $8.8 million, but $20.8 million for years 3 through 5 (2016-17-18).

As far as the math goes, it's a case of whatever you take away in salary in any one year gets added in as a signing bonus. The signing bonus is then spread out evenly over the life of the contract - in this case five years. In Miguel's example he removed $12,000,000 of 2014 salary; divide that by five (length of contract) and you have $2,400,000 per year in the signing bonus row to figure out the appropriate salary cap figure.



Also, as AJ pointed out, the current (top section) cap numbers should be $16mm (13 + 1.5 + 1.5) rather than 13.5mm assuming that he is traded for. If he is released and becomes a free agent then the old contract becomes null and void, and do not effect whatever new contract is signed.

 

[yopats]

Re: Calling Miguel: Revis Cap Question

That's one extreme example, bringing the 2014 salary all the way down to $1 million.

You could also do something in between, e.g., making the 2014 salary $3 million; that would move $10mm to bonus over the five years ($2mm per year) and create a 2014 cap number of $8mm but reduce the future year cap numbers to $18mm rather than $18.4.

You could also convert both 2014 and 2015 salaries to signing bonus, in part to reduce the 2015 cap hit - but doing so increases the dead money if he is cut prior to 2018, and also increases the cap number in 2016-18. If you make his base salary $1 million in both 2014 and 2015 and convert the remainder ($12 million from 2014 and $12 million from 2015) to a signing bonus, then the prorated signing bonus for each of those five years is now $4.8 million. That makes the cap hit in both 2014 and 2014 $8.8 million, but $20.8 million for years 3 through 5 (2016-17-18).

As far as the math goes, it's a case of whatever you take away in salary in any one year gets added in as a signing bonus. The signing bonus is then spread out evenly over the life of the contract - in this case five years. In Miguel's example he removed $12,000,000 of 2014 salary; divide that by five (length of contract) and you have $2,400,000 per year in the signing bonus row to figure out the appropriate salary cap figure.



Also, as AJ pointed out, the current (top section) cap numbers should be $16mm (13 + 1.5 + 1.5) rather than 13.5mm assuming that he is traded for. If he is released and becomes a free agent then the old contract becomes null and void, and do not effect whatever new contract is signed.

Thanks so much for this breakdown..

Given the Salary cap predictions mentioned for the upcoming years.

If you were BB .. How would you restructure this deal IF indeed we traded for him?

 

[Miguel]

FYI, Miguel, I think you have a formula error on the top part. Total should be 16mill not 14.5 I believe.

Had correct formula. Twitter did not upload latest picture.

 

[IllegalContact]

Re: Calling Miguel: Revis Cap Question

Thanks so much for this breakdown..

Given the Salary cap predictions mentioned for the upcoming years.

If you were BB .. How would you restructure this deal IF indeed we traded for him?

I would target the 2014 cap hit to be roughly equal to what it would have been for talib had he signed an offer with the pats. From there, I would just try to draw a line down the middle when it comes to backloading to prevent the cap hit to be too tough in the last year and maybe 2 if possible

the problem is that the sheer number (5/80) will cause some pain at some point no matter how you dice it up......I guess you could target year 1 post brady as a great year to eat cap

 

[kennyb]

Re: Calling Miguel: Revis Cap Question

Thanks so much for this breakdown..

Given the Salary cap predictions mentioned for the upcoming years.

If you were BB .. How would you restructure this deal IF indeed we traded for him?

If you're in a win now mode, then you backload it as much as possible or as much as you need to. So if decide you only want a cap hit of 7M, then take his 16M salary and put 12M as a signing bonus. 12M amortized over 4 years(?) is 3M per year. So his first cap hit is 4M +3M or 7M.

If cut after that first year his dead money is 12M - 3M or 9M.

Do the same thing the next year, amortizing 12M over 3 years and you get a cap hit of 4M (salary) + 3M (first SB) + 4M( next SB) or 11M.

If cut after that year then his cap hit is 32M paid minus 18M cap hits taken or 14M.

So it kind of snowballs.

That's the general concept.

 

[ctpatsfan77]

Re: Calling Miguel: Revis Cap Question

If you're in a win now mode, then you backload it as much as possible or as much as you need to. So if decide you only want a cap hit of 7M, then take his 16M salary and put 12M as a signing bonus. 12M amortized over 4 years(?) is 3M per year. So his first cap hit is 4M +3M or 7M.

If cut after that first year his dead money is 12M - 3M or 9M.

Do the same thing the next year, amortizing 12M over 3 years and you get a cap hit of 4M (salary) + 3M (first SB) + 4M( next SB) or 11M.

If cut after that year then his cap hit is 32M paid minus 18M cap hits taken or 14M.

So it kind of snowballs.

That's the general concept.

Basic idea is correct, math not quite.

What you're suggesting would end up looking like this (converting $12M a year):

2014
$1.0M Base salary
$2.4M Prorated 2014 SB ($12M/5; remaining: $9.6M)
$1.5M Roster bonus (due tomorrow)
$1.5M Workout bonus
-------
$6.4M Total cap hit

2015
$1.0M Base salary
$2.4M Prorated 2014 SB (remaining: $7.2M)
$3.0M Prorated 2015 SB (remaining: $9.0M)
$1.5M Roster bonus (due tomorrow)
$1.5M Workout bonus
-------
$9.4M Total cap hit

If cut after 2015 season, remaining cap hit: $16.2M.

 

[BobDigital]

Well I don't think we trade for him. I think we sign him as a FA for about a 5 year 75 M dollar deal.

I would back load the contract but generally I would look to pay about 8M per year for the next 3 years for him.

 

[Rob0729]

Miguel updated his new deal image:



https://twitter.com/patscap/status/443807115904167936/photo/1

 

[jmt57]

Re: Calling Miguel: Revis Cap Question

Thanks so much for this breakdown..

Given the Salary cap predictions mentioned for the upcoming years.

If you were BB .. How would you restructure this deal IF indeed we traded for him?

If I was BB and I did trade for him, I would push cap money into 2015 and beyond based on the information that the cap is supposed to go up quite a bit the next couple of years. However, I'm leery about a five-year contract for a corner that will turn 29 this off-season. I'd rather sign him as a free agent to a shorter contract.

 

[upstater1]

Re: Calling Miguel: Revis Cap Question

If I was BB and I did trade for him, I would push cap money into 2015 and beyond based on the information that the cap is supposed to go up quite a bit the next couple of years. However, I'm leery about a five-year contract for a corner that will turn 29 this off-season. I'd rather sign him as a free agent to a shorter contract.

You can always cut him after 3 years.

That's the beauty of it.

In the 4th year, if he's cut, your cap hit is then only $4.8m.

 

[Ring 6]

Re: Calling Miguel: Revis Cap Question

Basic idea is correct, math not quite.

What you're suggesting would end up looking like this (converting $12M a year):

2014
$1.0M Base salary
$2.4M Prorated 2014 SB ($12M/5; remaining: $9.6M)
$1.5M Roster bonus (due tomorrow)
$1.5M Workout bonus
-------
$6.4M Total cap hit

2015
$1.0M Base salary
$2.4M Prorated 2014 SB (remaining: $7.2M)
$3.0M Prorated 2015 SB (remaining: $9.0M)
$1.5M Roster bonus (due tomorrow)
$1.5M Workout bonus
-------
$9.4M Total cap hit

If cut after 2015 season, remaining cap hit: $16.2M.

Or do the same in 2016 which would give you about a 13.4 hit and make 2017 dead money hit about 19 mill give or take.
I would gladly eat 19 mill in a one time 2017 dead money hit in return for 3 years of Revis at a total of 29.2 mill.
It make one year of the cap difficult in order to elevate the team for the next 3. This is not cap hell, its one year of cap purgatory.

 

[jmt57]

Re: Calling Miguel: Revis Cap Question

You can always cut him after 3 years.

That's the beauty of it.

In the 4th year, if he's cut, your cap hit is then only $4.8m.

True, but he would still be making about $6 million more per year than the next highest paid corner. On the open market I would guess that Revis will likely land a deal worth at around $12 million per year.