Draft Pick Cap Misconception

[Miguel]

Whenever you hear/read reports that the Pats will need 5 million to sign their 2014 draft class please first review
» Over the Cap- 2014 NFL Draft Rookie Pool Allocations
OvertheCap.Com's 2014 rookie pool estimates and AdamJT13: The rookie pool and the salary cap

Adamjt13's blog post on the rookie pool which I consider the best explanation of how the rookie pool works within the salary cap.

I have been tweeting this a lot lately. Today Ben Volin who reported in the Globe recently that it would take $5 million to sign the Patriots draft picks tweeted today a link to an article about the rookie pool so there is some hope that we Patriots fans will get better coverage of the salary cap.

 

[mayoclinic]

Thank you for posting this. It clears up a lot.

As a gross simplification, would it be fair to say the following?

1. When players are actually drafted, they are assigned a relatively low value by the NFL (in the $300K range), which is going to be well below anyone on our "top 51" list, therefore they won't really affect our cap situation at all until they are signed to contracts.

2. Based on rough estimates of cap hits for rookies, including 1st year base salary and portion of signing bonus, the actual 2014 cap hit for our current projected group (1 pick each in rounds 1-4 and 7, plus 2 6th round picks and possibly a projected 6th round comp pick) is probably going to be around $1.5-2M.

Also, do salaries for the PS players likely to count against the cap, or are they all below the "rule of 51" and therefore not relevant? Obviously, it costs money to field a PS. But does it cost cap space?

 

[Miguel]

Thank you for posting this. It clears up a lot.

As a gross simplification, would it be fair to say the following?

1. When players are actually drafted, they are assigned a relatively low value by the NFL (in the $300K range), which is going to be well below anyone on our "top 51" list, therefore they won't really affect our cap situation at all until they are signed to contracts.

Drafted players are automatically assumed to have been tendered a one-year contract at the rookie minimum of $420,000. Currently, the 51st player on the Patriots has a salary of $495,000. So drafting a player will not indeed affect the Patriots cap until they are signed.

2. Based on rough estimates of cap hits for rookies, including 1st year base salary and portion of signing bonus, the actual 2014 cap hit for our current projected group (1 pick each in rounds 1-4 and 7, plus 2 6th round picks and possibly a projected 6th round comp pick) is probably going to be around $1.5-2M.

Yes, there is a big difference between 2 million and $5 million. Have to convince our lazy beat writers of that

Also, do salaries for the PS players likely to count against the cap

Yes. They do.

 

[PatriotSeven]

Ben Volin obviously has the inside scoop that we're trading up for Sammy Watkins. That's why!

 

[mgteich]

Lazy they are.

As you taught us, add the $2M net cost of the rookies to the effect of signing UDFA's and others replacing those in the 51 and we have a net of about ZERO.

Yes, there is a big difference between 2 million and $5 million. Have to convince our lazy beat writers of that

 

[mayoclinic]

Drafted players are automatically assumed to have been tendered a one-year contract at the rookie minimum of $420,000. Currently, the 51st player on the Patriots has a salary of $495,000. So drafting a player will not indeed affect the Patriots cap until they are signed.



Yes, there is a big difference between 2 million and $5 million. Have to convince our lazy beat writers of that



Yes. They do.

MgTeich has suggested a figure of something like $6M in cap space to cover (1) the rookie contract cap hits, (2) the PS, and (3) contingency funds for use during the regular season. We know that the team likes to keep some funds available in order to have the room to maneuver during the regular season. Even with a $1.5-2M rookie cap hit estimate, it seems to me that this number isn't unreasonable. I don't know what the cap hit of the PS is like - I assume it isn't very high - but having a few $M in reserve to work with seems reasonable to me.

What I don't know - not being a capologist - is how much money can reasonably be expected to be freed up from veteran cuts, extensions, restructurings.

I could envision the Pats spending up to their current cap limit (including releasing Wilfork for additional cap space), and then giving themselves more room to work with by subsequent cuts (Adrian Wilson, Dan Connolly) and extensions (McCourty, Gostkowski, Slater), but this might be playing things too tight for the team's comfort.

 

[Miguel]

What I don't know - not being a capologist - is how much money can reasonably be expected to be freed up from veteran cuts, extensions, restructurings.

See Patriots Salary Cap Picture ? 3/16/2014 Update; Anticipating Future Cap needs and listing how the Pats can create more cap space atriots Salary Cap

 

[mayoclinic]

See Patriots Salary Cap Picture ? 3/16/2014 Update; Anticipating Future Cap needs and listing how the Pats can create more cap space atriots Salary Cap

I understand all of that analysis. That's fairly basic.

I phrased the question poorly. Perhaps I should have phrased it: "What I don't know, is whether teams (specifically the Patriots) operate with the expectation that they can free up additional cap space via cuts/extensions and spend up to their cap space, or whether they prefer to operate with a reserve threshold". I imagine that different teams have different practices in terms of how aggressive they are in spending to the cap; I'm not sure what the Pats' practice has been.

 

[mgteich]

I agree 100% with Miguel's analysis.

I sometimes have two differences.

1) I sometimes add a couple of million cushion to replace players put on IR during camp or the preseason. I think of the in-season reserve as separate.

2) I don't think that we need to have a cushion for NLTBE incentives. They will be part of next year's increased cap. In the past, this cushion was necessary because the cap was not increasing by significant amounts.

 

[Miguel]

I understand all of that analysis. That's fairly basic.

I phrased the question poorly. Perhaps I should have phrased it: "What I don't know, is whether teams (specifically the Patriots) operate with the expectation that they can free up additional cap space via cuts/extensions and spend up to their cap space, or whether they prefer to operate with a reserve threshold". I imagine that different teams have different practices in terms of how aggressive they are in spending to the cap; I'm not sure what the Pats' practice has been.

I think the latter but one would have to be on the inside to fully know.

 

[mgteich]

I hope so. We need no more of cutting Milloy on the last day.

That being said, I could see keep a Mankins restructure available.

I think the latter but one would have to be on the inside to fully know.

 

[Miguel]

I don't think that we need to have a cushion for NLTBE incentives. They will be part of next year's increased cap. In the past, this cushion was necessary because the cap was not increasing by significant amounts.

I am trying to guess at how the Patriots will handle having $4.6 million in NTLBE incentives. If they do not leave a cushion for them, the Patriots could end up with an adjusted cap number in 2015 that is lower than the actual cap number.

This is the first time I have seen the Patriots with so much easily attainable NLTBE incentives.

Do the Patriots leave a 100% cushion? 0% cushion? Decided to split the difference.

 

[mgteich]

Given that the cap amount is expected to increase by a significant amount, I would guess that the cushion would be on the lower side. And yes, I would be fine if the patriots 2015 cap adjustment were negative.

In some sense, I think that the team seems to be purposely loading up on NLTBE incentives with the idea of pushing them forward. The FO is squeezing the 2014 cap for all they can get out of it. It would seem counter to this plan if they were to have cushion for the whole likely to be earned NLTBE amounts.

As you say, the cushion could be anywhere between 0% and 100%.

I am trying to guess at how the Patriots will handle having $4.6 million in NTLBE incentives. If they do not leave a cushion for them, the Patriots could end up with an adjusted cap number in 2015 that is lower than the actual cap number.

This is the first time I have seen the Patriots with so much easily attainable NLTBE incentives.

Do the Patriots leave a 100% cushion? 0% cushion? Decided to split the difference.

 

[Miguel]

In some sense, I think that the team seems to be purposely loading up on NLTBE incentives with the idea of pushing them forward. The FO is squeezing the 2014 cap for all they can get out of it. It would seem counter to this plan if they were to have cushion for the whole likely to be earned NLTBE amounts.

As you say, the cushion could be anywhere between 0% and 100%.

Team push forward unreached LTBE incentives, not unreached LTBE incentives. Unreached NLTBE incentives have no effect on the cap.

 

[mgteich]

I mean that the team is pushing forward incentives labeled by the league as NTLBE that the team thinks have a high probability of being earned.

Team push forward unreached LTBE incentives, not unreached LTBE incentives. Unreached NLTBE incentives have no effect on the cap.

 

[ATippett56]

» Over the Cap- 2014 NFL Draft Rookie Pool Allocations

Salary Cap Allocation Rookie Pool - 2014 NFL Draft

New England Patriots - $1,414,602