Salary Cap Thought: Capologist's Wanted

[Hoofbite]

Just something that kind of came up at random and I'm not sure if the numbers at Spotrac are right or if I understand what a "cash floor" actually means but if Spotrac is anywhere close and a "cash floor" is what it sounds like, Dallas could be in for an aspect of salary cap hell that nobody has even mentioned yet.

For the years 2013 to 2016 (then from 2017 to 2020) teams will have to spend 89% of the total cap dollars in cash paid as base salaries, roster bonus, workout bonus and signing bonuses with signing bonuses likely only counting for the year the contract was signed.

If you think of a simple equation: A + B = $125M

A = Base Salary​

B = Prorated Bonus​

Any increase in prorated bonus money will reduce the amount paid as base salary for that season. Pretty simple. You have a set cap number and if you have lots of fake money on it, you can't actually spend real money.


So here's the thought:

If Dallas is constantly loading bonus money onto future years and reducing their amount of actual cash that can be spent for that year, is there a point at which Dallas fucks itself and can no longer become cap compliant simply because they cannot spend enough REAL CASH to meet that cash floor?

If you look at Spotrac,

http://www.spotrac.com/nfl/dallas-cowboys/cap-hit/

Dallas has only $49.5M in base salary money that they are paying out. They have $4.9M going to injured reserve and another 800K going to the practice squad. (The numbers are weird because Spencer is on IR and he should double their slotted IR money. Maybe that severance money or some shit. I added all the active players and IR players up and they come out to $54.5M)


That totals $54.5M in cash spending. They signed Romo and gave him $25M in bonus money up front. They signed Lee and gave him $10M in bonus money up front.

That's $89.5M in cash spending for this season, which totals 72.7% of the cash floor. ($19.9M under the cutoff for 89%)

Next year they have about $26M in signing bonus money on the cap, $16.6M in "other bonus" money which is basically all the restructuring they have done, and they have $11M in dead money.

If the cap is $125M that would leave their current "free cash" to spend at about $71M.....which is like 57%. ($40.5M under the 89% cut off)

That would leave only the 2015 and 2016 seasons for Dallas to meet the 89% cutoff and then cover an additional $60M in cash spending that they did not meet for this year and 2014.

Restructuring does nothing to solve this problem because base salaries would have been paid and counted anyway. The only real way you can cut down on that problem is if you were to sign a big name free agent and give him a huge signing bonus that you can spread over the next 4-5 years. Problem is, that's just eating into future "free cash" and you can't possibly get a blockbuster free agent every single year just to get you cap compliant with the cash floor.

In 2015 they currently have $33.5M in various bonuses and a projected cap of $127M puts them at 73.6%.

In 2016 they currently have $20M in carious bonuses and a projected cap of $130M puts them at 84.6%.

Bonus money for 2015 and 2016 will increase with Dez and Tyron signing which will probably lower their cash spending by a total of $5M to $6M for each year.

And the best part........people at CZ are STILL talking about a massive restructuring offseason in 2014.


How is Dallas ever going to meet that cash floor when their bonus money as it stands right now is already greater than the 11% of the cap every single year?

What's the penalty going to be for this shit? Draft picks?

So the team will not only have limited ability to even acquire FAs simply because they have to restructure every single year just to get under the cap ceiling but is there actually a possibility that the team loses fucking draft picks because they won't be spending enough real cash for the 4 year period, let alone in any single season?

I gotta think about this some more. These numbers can't actually be correct or the definition of "cash floor" is much different than it sounds.

 

[Rock Slamdance]

Way too much to process right now...

 

[cmd34]

The only thing I can think of is that this is part of the reason why some of the contracts (Romo, Ware, Witten) have either no or smaller bonus numbers in the last few years of their deals.

In reality, I'm sure this is either not how it works or Jerry & Stephen have a plan for this. As incompetent as they are in so many things, they seem to have the skill to maneuver around the cap issues.

Now ideally, it would be great if this was true and the NFL hammered Jerry for his shady cap manipulations. I'm dreaming out loud here but I'd love for him to be forced to take a George Stenbrenner-like vacation.

 

[Jon88]

All those numbers make my head hurt.

I'm like Stephen Jones. I really don't care to understand all of this.

 

[yimyammer]

I'd love for him to be forced to take a George Stenbrenner-like vacation.

I'd be in nirvana if that ever happened, OH HOW SWEET IT WOULD BE!

 

[Hoofbite]

Posted this at the zone but oddly none of the experts over there have chimed in.

 

[JBond]

adam had nothing? He is a little pretentious, but his numbers are usually pretty good.

 

[Hoofbite]

I think someone said he may have been hired in some capacity and can't really talk about it as much.

It's an odd aspect but I think part is that nobody wants it to turn out to be correct.

 

[junk]

According to this, Dallas has $93 million in salary in 2014.

http://overthecap.com/teamcap.php?Team=Cowboys&Year=2014

Obviously, much of that will get converted to bonus, but wouldn't that then count against the cash floor?

I think the issue becomes dead money when you have to start shedding guys like Ware, Romo, Witten, etc. I'd assume if you had enough dead money, you couldn't meet the cash floor in 1 or 2 years, but you still have a four year rolling average to meet the floor.

 

[Hoofbite]

According to this, Dallas has $93 million in salary in 2014.

http://overthecap.com/teamcap.php?Team=Cowboys&Year=2014

Obviously, much of that will get converted to bonus, but wouldn't that then count against the cash floor?

I think the issue becomes dead money when you have to start shedding guys like Ware, Romo, Witten, etc. I'd assume if you had enough dead money, you couldn't meet the cash floor in 1 or 2 years, but you still have a four year rolling average to meet the floor.

I kind of worked backwards, looking at what their prorated money equaled and deducted that from the total cap give a remaining balance that would be "free" to spend.

It looks like Spotrac has something similar to $93M but that's obviously going to come down as you said.

As far as the 4 year rolling, it's 4 year "blocked" it seems. So the first block is 2013 to 2016, and the second block is 2017 to 2020.

(a) For each of the following four-League Year periods, 2013–2016 and 2017–2020, there shall be a guaranteed Minimum Team Cash Spending of 89% of the Salary Caps for such periods (e.g., if the Salary Caps for the 2013–16 and 2017–2020 are $100, 120, 130, and 150 million, respectively, each Club shall have a Minimum Team Cash Spending for that period of $445 million (89% of $500 million))

(b) Any shortfall in the Minimum Team Cash Spending at the end of a League Year in which it is applicable (i.e., the 2016 and 2020 League Years) shall be paid, on or before the next September 15, by the Team having such shortfall, directly to the players who were on such a Team’s roster at any time during the applicable seasons, pursuant to the reasonable allocation instructions of the NFLPA.

Even at $93M, Dallas needs to spend an extra $18M to hit that mark. So they need to sign either Dez or Tyron so their signing bonus can count towards the total.

The real problem is that Dallas is currently $21M over and they'll have to free up all that money and then more in order to sign Dez or Tyron.

So they'll have to push tons of money onto 2015, 2016, 2017 and maybe 2018. In 2015 they're already at $124.7M for a cap figure but only have 26 players under contract, according to the site you posted.

Dallas is already about $20M short of keeping pace. Next year they're scheduled to fall another $18M short. They're going to increase their prorated amount in 2016 and 2017 by restructuring 2014 and 2015.

I just don't see how they'll make it work. They currently have $37M tied up in prorated money for 2015. Sign Dez or Tyron and you can add $2M-3M to that number. Restructure this offseason and you'll probably add $6M-$8M.

After just these few moves they could have almost $50M tied up in prorated money and only have 26 players on the roster for 2015.

It's gonna be awfully interesting to see who gets cut after this season.

 

[junk]

I kind of worked backwards, looking at what their prorated money equaled and deducted that from the total cap give a remaining balance that would be "free" to spend.

It looks like Spotrac has something similar to $93M but that's obviously going to come down as you said.

As far as the 4 year rolling, it's 4 year "blocked" it seems. So the first block is 2013 to 2016, and the second block is 2017 to 2020.



Even at $93M, Dallas needs to spend an extra $18M to hit that mark. So they need to sign either Dez or Tyron so their signing bonus can count towards the total.

The real problem is that Dallas is currently $21M over and they'll have to free up all that money and then more in order to sign Dez or Tyron.

So they'll have to push tons of money onto 2015, 2016, 2017 and maybe 2018. In 2015 they're already at $124.7M for a cap figure but only have 26 players under contract, according to the site you posted.

Dallas is already about $20M short of keeping pace. Next year they're scheduled to fall another $18M short. They're going to increase their prorated amount in 2016 and 2017 by restructuring 2014 and 2015.

I just don't see how they'll make it work. They currently have $37M tied up in prorated money for 2015. Sign Dez or Tyron and you can add $2M-3M to that number. Restructure this offseason and you'll probably add $6M-$8M.

After just these few moves they could have almost $50M tied up in prorated money and only have 26 players on the roster for 2015.

It's gonna be awfully interesting to see who gets cut after this season.

I think they are going to have to do something with Ware. His contract is the real albatross.

If I read this though, are there any real penalties other than Dallas has to make up the difference by just flat out paying the players on the roster? If that is the case, who cares?

Although the 89% thing seems odd. That would imply that if you have $125 million cap, you have to have $111 million paid out over a 4 year period. How do you even sign contracts? Every team would have an issue if they couldn't have more than $14 million in pro-rated bonus money.

 

[peplaw06]

How could it be possible to just pay players more to meet the cash floor if we are already cap strapped? If you're cutting guys to create cap space, that has to be coming off the books for the current year, which would decrease our cash outlay.

 

[junk]

Yes, there has to be more to it than this:

(b) Any shortfall in the Minimum Team Cash Spending at the end of a League Year in which it is applicable (i.e., the 2016 and 2020 League Years) shall be paid, on or before the next September 15, by the Team having such shortfall, directly to the players who were on such a Team’s roster at any time during the applicable seasons, pursuant to the reasonable allocation instructions of the NFLPA.

Otherwise, I'd think people could game the system constantly.

It almost seems like it gets you in a situation where you need to sign a high dollar free agent with a large signing bonus at some point to boost the spend for a certain year and bump up your average. However, your dead money limits your ability to do that. Could be an unanticipated issue for sure.

BTW, Over the cap has an awesome salary cap calculator. I was fucking around with spreadsheets like a dummy.

 

[Hoofbite]

How could it be possible to just pay players more to meet the cash floor if we are already cap strapped? If you're cutting guys to create cap space, that has to be coming off the books for the current year, which would decrease our cash outlay.

In theory, you could cut a guy who has a $12M base salary and even if there's $4M in dead money you'd still have $8M to spend.

$8M in cap space can get you 2 free agents.

Each guy gets $10M in SB over 5 years and with a simple base salary that utilizes the rest of the free cap space you'd have:

That's $20M in bonuses and $4M in base salaries that are adding to your cash spending. Lost the $12M base salary guy but you've added more and essentially, you've increased your cash spending by $12M.

 

[Hoofbite]

Yes, there has to be more to it than this:

Otherwise, I'd think people could game the system constantly.

It almost seems like it gets you in a situation where you need to sign a high dollar free agent with a large signing bonus at some point to boost the spend for a certain year and bump up your average. However, your dead money limits your ability to do that. Could be an unanticipated issue for sure.

BTW, Over the cap has an awesome salary cap calculator. I was fucking around with spreadsheets like a dummy.

I think the situation you create is that you guarantee less in terms of bonus money and in order to entice players you have to offer a high year 1 base salary, roster bonus in year 2, AND guarantee years 1 and 2.

Alternatively you could have almost every contract include incentive bonuses. Anyone who achieves those bonuses will have earned their higher salary and cover a bit of the amount you are short of the cash floor.

Large signing bonuses are only good to cover any amount that you have fallen short but because it essentially reduces your available cap space you can allocate to cash spending without reducing the amount that you MUST spend, large signing bonuses are not wise, IMO.