Salary cap becomes a factor once again

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It had been so long since teams were scrambling to make moves in order to get under the annual spending limit that we’d almost forgotten the dynamic of restructured contracts and pay cuts and players being released prematurely.

But it’s back, thanks in large part to a salary cap that has gotten lower with the arrival of a new labor deal.  The Steelers have provided the first example of the scramble to get under the maximum by March 13, the first day of the new league year.  By that day, the 51 highest-paid players must have combined cap numbers less than the total spending limit.  Before making a flurry of moves this week, the Steelers were more than $25 million over the 2012 limit.

As it relates to the Raiders, Jerry McDonald of InsideBayArea.com calls the salary cap a “myth.”  To an extent, he’s right; the question of whether a player stays with the Raiders or any team ultimately will be driven by performance.  But cap number has once again become a factor.  If a player’s contract carries numbers that outweigh his perceived value, action will be needed — up to and including a divorce.

But cutting a player won’t always be the answer.  Dumping a contract has consequences, via the acceleration of prorated cap values resulting from a signing bonus.  In some cases, the cap number actually goes up when the player is released.

As to cornerback Stanford Routt, the Raiders acted now in order to avoid owing him another $5 million guaranteed in 2012.  But the Raiders will still have to account for $7.452 million in dead money at some point, arising from a $9.315 million payment to Routt from last year that was spread over five seasons.

The point for now is that the reduction of the salary cap resulting from the new CBA has resurrected terms and concepts that had been largely irrelevant for several years.  And it becomes even more important to have in-house experts who can figure it all out.

38 responses to “Salary cap becomes a factor once again

  1. Lucky Martin Mayhew has got a law degree….because he will have to work some magic to make the Lion’s roster better for next season with our current cap situation.

  2. @yevrag3535 …

    Well, if you’re a football fan, you care because you’d like your team to be able to play with a full roster of capable players. 🙄

    Question, Mike:

    What happens to the dead money if a player retires rather than being cut or traded? Does it go away or is it treated as if he’s been cut?

  3. This would all be quite a bit simpler if teams just followed the guidelines being set up for the new America. Get rid of the “haves” and the “have nots”…and put an end to NFL class warfare. It’s not fair that some players are more talented than others. Split the $150 million cap evenly among all 53 players. Done. (It would be fun reading NFL player tweets after that was mandated)

  4. I’ll never understand why it is that the cap has to be flexible. Make the cap a cap. If you go over the cap then someone must be let go in order to keep the number where it should be.

    Keep it simple.

  5. I SAID…..Its a good time to be a Buc fan with a boatload of cash..now lets get some FA talent in Tampa…

  6. Yes, this is why the Jets are “Stuck” with Santonio. Santonio has money Guarunteed from the Jets regardless if he is on their roster or someone elses, or should I say Santonio will still be a large cap hit if he is let go. Trading Players isn’t always the End-All to money problems. See: Manning, Peyton.

  7. Deb, good teams still win no matter what the cap is and bad team still lose no matter how much they spend. In the end all they care about is making millions.

  8. It’s the only thing the Bears have going for them, Salary Cap Guru Cliff Stein….he’s way more important than the rest of the Boobs running the show, ie, Ted Philips!

  9. I don’t understand why Steeler fans have been celebrating the restructuring of contracts. It’s not like the players are giving back money, they’re just converting this years cap number in to a signing bonus. That signing bonus is going to be charged to the cap over the course of the rest of the contract, on top of the original signing bonus number. So, come 2013, the player’s cap number will now be salary + prorated original bonus # + prorated 2012 bonus #.

  10. Deb says:Feb 11, 2012 2:39 PM
    What happens to the dead money if a player retires rather than being cut or traded? Does it go away or is it treated as if he’s been cut?
    ——————————————————–
    I don’t think it counts against the cap in that situation but the player then owes the prorated amount back to the team or they can sue him for it. Again the Lions come to mind…when Barry Sanders retired early he had to send the team a check for over $1.8M…

  11. The cap was gone for one season and you’re talking like it hasn’t been around in years. Teams didn’t spend like crazy in 2010 and most operated like the cap was still in effect with several cuts/restructures prior to the lockout, knowing the cap would return.

  12. nflfollower says: Feb 11, 2012 2:29 PM

    Lucky Martin Mayhew has got a law degree….because he will have to work some magic to make the Lion’s roster better for next season with our current cap situation.
    _________________________
    Which I’d agree with, were Tom Lewand not the cap guy in Detroit.

  13. crimhollingsworth says:

    I don’t understand why Steeler fans have been celebrating the restructuring of contracts. It’s not like the players are giving back money, they’re just converting this years cap number in to a signing bonus. That signing bonus is going to be charged to the cap over the course of the rest of the contract.

    ——————————

    The reason Steeler fans are excited is Omar Kahn, the Steelers salary cap wizard, has been restructuring contracts for them for last 10 years. He’s the best in the business. They never push money down the road without confidence that future cap increases can tolerate it.

    There’s a trophy case full of Lombardi’s that prove they know what their doing.

  14. @klunge …

    Thanks!!

    @yevrag3535 …

    It doesn’t matter what the players care about. The issue is whether teams can manage their payroll within the parameters set by the CBA. When a Dan Snyder overspends for a superstar player on the downside of his career, it leaves him less to spend on draft picks to build his team from the ground up. That ability to wisely manage financial and human assets is the reason winning teams continue to win and losing teams continue to lose. In the NFL, understanding how to properly allocate these funds is as important as understanding Xs and Os.

  15. If the Colts cut Goober Manning, they don’t have to pay him $28M, but the big signing bonus now gets expedited into this year to the tune of a $16m hit. They’re blowing that team up….

  16. @Deb says:

    What if said football player switches to a non-salary cap sport…ie: Bo Jackson,Deion Sanders,Drew Henson & Brian Jordan?

  17. @bospat …

    Those no-talent teams were good enough to outlast 30 other teams in those years. Hate to think what that says about everyone else in the NFL. Do the words “poor loser” have any meaning for you, hon?

    @franknunley57 …

    If he leaves football for another sport, he’s retired. Unless Zbikowski leaves the Ravens to take up full-time boxing or Ochocinco joins the rodeo, I’m not aware of any NFL players planning a move like that. But hockey player Sean Avery was the guest judge on Project Runway last week. Not sure how it works if one of the guys goes into fashion. 🙂

  18. It doesn’t matter what the players care about. The issue is whether teams can manage their payroll within the parameters set by the CBA. When a Dan Snyder overspends for a superstar player on the downside of his career, it leaves him less to spend on draft picks to build his team from the ground up. That ability to wisely manage financial and human assets is the reason winning teams continue to win and losing teams continue to lose. In the NFL, understanding how to properly allocate these funds is as important as understanding Xs and Os.

    This all sounds good but what about the cost of season tickets, license fee and the other expenses that the fans gladly pay each year. Which I have been doing since 1967 (my own doing) and see the wowners and player just shrugging there shoulders at year end and move one. May be it is because I live in Philly and I am just fed up. (by the way the above comment I did not write – I don’t know who did. )

  19. Based on reading some of the posts this salary cap thing may be a little too complicated for the average reader.

  20. @Deb says:

    Sean Avery is now a minor league hockey player so how does that factor in? Your theory is totally debunked. Project Runway Deb?

  21. The article doesn’t explain the Top 51 Rule correctly. Not only must the team’s “51 highest-paid players … have combined cap numbers less than the total spending limit,” all of the team’s dead money and certain parts of the cap numbers of the players outside the top 51 also must fit under the team’s total spending limit.

    The only money that doesn’t count against the cap while the Top 51 Rule is in effect is the base salaries of the players outside the top 51 — and even parts of those might count against the cap in some cases.

  22. Wasn’t Jerry Jones the father of the Salary Cap? Wasn’t he the one to push this so that he could make more money? Wasn’t this right after he fired Jimmy Johnson? Seems like the Cowboys GM has been screwing up football for a long time!

  23. @db105 says:

    Based on reading some of the posts this salary cap thing may be a little too complicated for the average reader.
    =============

    True, only you should continually pontificate with deb on the salary cap. do us all a favor bro.

  24. The salary cap is now and has always been nothing but a MYTH. Al Davis proved this over his many years with the Raiders.

    The Raiders are making moves at this time to get rid of dead weight. Players earning more than what they give on the field.

    If a team really wants to keep a player or go sign a player they can, so called salary cap or not. The teams use this MYTH as an excuse to dump players or to be cheap and not want to spend any money.

    Salary Cap?, give me a break.

  25. To whom it may concern:
    If a player retires, the cap hit is the same as if you cut him. Salary comes off the cap, but any bonus money is a cap hit, plus you retain the rights to the player. Like GB did with Farve.

  26. NFL team retains the rights to that player, no matter what other sport he plays. For example; Houston Texans drafted DHenson. He decided to play baseball, didn’t make it. Dallas still had to give Houston a draft pick to get him.

  27. @klunge:
    You’re correct, the Lions sued Sanders for his signing bonus and won a small settlement, but no cap relief as a result.

  28. I bet the league goes broke in 8 years, not allteams just some, look at the deas with congress and the new banking commissions that have with other main corporations and how the new contract has chasanhed the fine print. Just saying..

  29. @joe6066:
    TV extension goes into effect in 2014, but I don’t think the cap is going up ‘massively’.

  30. @franknunley57 …

    Wasn’t making a real point, dingdong, just having fun. The only pro hockey player I can name is Sidney Crosby … because people have posted about him here.

    Yes, Project Runway. I am a girl, you know 🙂

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