Understanding the Salary Cap

[pazrul72]

Some review for me.

1) How do guarantees affect the current cap.

For example, if there are no bonuses and salaries of $5M, and $25M all guaranteed. Is the current hit $5M?

2) Are there rules about how much salaries can increase?

There are rules and I am not familiar with all of them. Miguel and his page are a much better resource. Don't quote me because I could be wrong but I think it's no more then 20% growth year to year. Signing Bonus counts year one which is why you see low year one salaries but then it jumps. So you could have something like Year 1 salary 1 million, Year 2 12 million, Year 3 15 million, Year 4 18 million, Year 5 22 million.

The funny accounting you sometimes hear about comes from the signing Bonus and Guaranteed money. Let's say that 5 year contract I just laid out is 5 years 78 million. The player gets 10 million up front as a signing bonus as soon as pen hits paper. They are happy cuz their life just changed dramatically. The team is happy cuz that 10 million hits as 2 million in Year 1, 2 million in Year 2, 2 million in Year 3, 2 million in Year 4, and 2 million in Year 5. Guaranteed money is exactly what it sounds like on the team or not they get paid. So lets say this one has 40 million no matter what.

Here is where it gets fun. That contract is really only a 4 year 52 million contract. All of the guaranteed money is in the first 4 years and the last year is the biggest number so the team is able to cut the player for only the last years SB or 2 million in dead money. Even in Year 4 depending on how it is structured the team might he able to cut the player with 7 or 8 million of dead money.

Basically Dead Money is any signing bonus the player already has the cash for but the cap has not yet accounted for AND guaranteed money remaining on the contract. Cutting that player in Year 3 means at least 6 million in dead money as the SB from 3-5 comes due immediately

 

[One-If-By-Sea]

Cash spending does not equal cap allocation.

The main reason the Patriots have been below average in cash spending was Tom Brady.

The focus on cash spending does not provide all of the cap allocation context for a team like the Patriots who uses incentives and active roster bonuses. For example, if a player does not earn his LTBE incentives and his LTBE active roster bonuses the Patriots would not have spent the cash after having allocated cap space on that player.

In 2017 Pats had to pay back 4.5M in borrowed cap space. Teams were allowed to borrow cap space in 2011/2012 as part of the transition to the new CBA. $4.5M gets you a couple of players. That $4.5M was not cash spending.

Thanks Miguel for the post and all of the work you do.

While cash spending does not equal cap allocation to the penny, for the vast majority of fans, if the two are 98% equivalent, then they are equivalent. If we delve into all of nuances of the cap calculation I think it leads to more confusion. And if there is a significant discrepancy I am guessing the player's union would close that hole (like LTBE incentives that are not earned - minor in my opinion). So I am arguing that if the exceptions are very minor, it is easier for most fans to think of the Salary Cap as the long term smoothing of the cash spent, and the two are essentially equal.

That is not to say your detail orientation is wrong or unappreciated, but for a lot of us who did not major in Capology, the model of the Salary Cap equals the cash spent over the long haul works well.

 

[Ring 6]

Yes, you can lower your cap responsibility by not bothering to have a QB on the roster being paid much more than minimum. You may also have to cut 2-3 more of your top players. That way you have the glory of saving cap money, ruining your team, with the hope of starting over and being competitive in 2-3 years.

No. The way you manage the cap is to have many players on rookie contracts contributing, avoid overpaying for name veterans who will be producing less as the contract wears on and fill roles with with bargain players who are strong in an important role but not complete players that demand top pay.
The teams that struggle with the cap
are the teams signing the top big money free agents for too much money and entering a cycle where every few years they load up on expensive free agents, then end up releasing most of them, sucking, clearing the cap and doing it all over again

 

[Ring 6]

Some review for me.

1) How do guarantees affect the current cap.

For example, if there are no bonuses and salaries of $5M, and $25M all guaranteed. Is the current hit $5M?

2) Are there rules about how much salaries can increase?

I don’t think you can have that large of an increase.

 

[Triumph]

I also heard that Belichick's salary is much higher than any other HC/GM and is also part of the budget that Kraft gives him to work with. If true, that would seem to indicate that Bill's salary affects the salaries of players on the field.

No doubt.

1 The best NFL HC in the league.
2 8 super bowl rings to his name.
3 Serves as GM too.
4 NE has one of the smallest coaching staffs in the NFL. Belichick: Why the Patriots have one of the smallest coaching staffs in the NFL

BB strikes me as conservative and not a guy who throws money around like there's no tomorrow.

 

[1960Pats]

Cap Hell does happen.

Do you recall the Saints a few years ago post Super Bowl? The had to cut and let go a bunch of players due to salary cap limitations. Guess what? The Saints are back at Cap Hell crossroads again in 2021. NFL 2021 Salary Cap Tracker

It might have paid off if not for some terrible luck (bad non-call) and a seriously boneheaded play. One of those may have benefitted the Pats who got to face a weaker Rams team in the SB. You think this could be the Saints' last hurrah?

 

[1960Pats]

No. The way you manage the cap is to have many players on rookie contracts contributing, avoid overpaying for name veterans who will be producing less as the contract wears on and fill roles with with bargain players who are strong in an important role but not complete players that demand top pay.
The teams that struggle with the cap
are the teams signing the top big money free agents for too much money and entering a cycle where every few years they load up on expensive free agents, then end up releasing most of them, sucking, clearing the cap and doing it all over again

This is why my preference for known players over draft picks probably wouldn't work, unless a team could somehow put out a complete roster of players making 3-4 million with a higher paid QB. I remember when Bill first arrived I was arguing with fellow AOLes that this was his goal.

 

[Ring 6]

This is why my preference for known players over draft picks probably wouldn't work, unless a team could somehow put out a complete roster of players making 3-4 million with a higher paid QB. I remember when Bill first arrived I was arguing with fellow AOLes that this was his goal.

The problem with “known” players in a capped system is that players tend to get paid for their resume. And the players with the best resumes are likely the ones most likely to decline over the length of the contract.
The key under a cap is to get the most talent per dollar (along with having the talent for together and complement each other).
So while trading for Julio Jones might sound great the chance of him outperforming his cost isn’t very good and you also trade away draft picks that are likely to outperform their cost.
Of course there has to be balance.
It’s easier to argue 6 average players make you a better team than 1 superstar and 5 slugs but you still end up with just 6 average players.

 

[Ring 6]

It might have paid off if not for some terrible luck (bad non-call) and a seriously boneheaded play. One of those may have benefitted the Pats who got to face a weaker Rams team in the SB. You think this could be the Saints' last hurrah?

Not really because the cap issues were followed by 4 7-9s in 5 years.

 

[Triumph]

It might have paid off if not for some terrible luck (bad non-call) and a seriously boneheaded play. One of those may have benefitted the Pats who got to face a weaker Rams team in the SB. You think this could be the Saints' last hurrah?

Yes

How much longer can Brees go? I believe its super bowl or bust for NO. The Bears defense is pretty good and if they hit Brees in his sore ribs it may be curtains for the 2020 Saints.