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View Full Version : When does our "Dead money" come off the cap?


David's Busted Carr
03-03-2007, 10:48 PM
So when does all this "dead money" come off our cap? Is there any way we can just "eat it" all this year so we've got a boatload of money next off season?

I would just rather try to save money this offseason and sign minimal free agents, have a great draft, then add a few key pieces NEXT offseason if we have the money.

STEEL BLUE TEXANS
03-03-2007, 10:49 PM
Next year.

trutxn
03-03-2007, 11:16 PM
So when does all this "dead money" come off our cap? Is there any way we can just "eat it" all this year so we've got a boatload of money next off season?

I would just rather try to save money this offseason and sign minimal free agents, have a great draft, then add a few key pieces NEXT offseason if we have the money.

We will have $20 million extra dollars in cap space next year, without the leagues salary cap increase. We will have to subtract the players increases in pay from year to year. But, we'll still be able to afford anyone next year in FA.

GTFan
03-03-2007, 11:35 PM
There is no current dead money for 2008 as long as we don't designate any of our cuts for '08 and take it all on the chin this year. We have about $41 million available currently for 2008, course that doesn't include signing 2 years worth of rooks and FAs, but there is definite light at the end of the tunnel. I do expect Williams, Wong and Greenwood to be '08 cuts if not sooner, which would cause there to be some dead money in 08.

dbspi
03-04-2007, 12:13 AM
Williams, and Wong will definitely be cut this year. Its a matter of when with them. As far as being freed from dead money is concerned, we will always have some dead money every year since few players will be cut with longer contracts o improve the team.

GTFan
03-04-2007, 12:25 AM
Yes, there will always be some dead money, where you're paying not to have a body there; it's inevitable. But a lot of dead money helps the team; Seth Payne's release is a savings. The Texans, however, postponed their dead money to 07. They made expensive June 1 cuts last year. So, even though we were 9 MILLION under the cap in 2006, the vast majority of this dead money is applied to 07 when we need all the cap room we can get.

infantrycak
03-04-2007, 09:41 AM
By definition, dead money has to be on the current year's cap or if the June 1st mechanism is used, this year and next year, i.e. dead money doesn't extend past the current year plus one. As an aside, that means McClain has demonstrated his ignorance the last couple days talking about the Texans needing 3-4 years to clear their dead money off the books.

Xman
03-04-2007, 10:41 AM
My understanding of "dead money" - which is signing bonuses that were spread out over a players full contract (in other words - a 5 million bonus on a 5 yr contract would count 1 mil per year against the cap plus the players salary - so, if you cut him after yr 2, you have to accelerate the remaining bonus money which becomes "dead money" - so you take a 3 mil hit but you save the yearly salary)

When you cut a player before June 1 - you take the "dead money" hit that year.
When you cut a player after June 1 - you split the hit - half that year and half the next (but I have heard you can designate 2 pre-june1 cuts as post to complicate it a little)

So, when a player has a huge signing bonus, it can cost more to cut them than pay their salary - for that year anyway. The benefit is that they are off the books for the future.
For example, Domanick signed a large contract with a hefty signing bonus. So, his salary is 3.34 and signing bonus allocation is 1.3 - and he is signed through 2009 (with an escalating salary of 4.18 in 2008)
So - if he is cut - then we get to lose the 3.34 in salary (and future salary) - but we have to take the full signing bonus allocation (1.3 times 3 years) - of 3.9 mil. So - by cutting him now, we only save .8 mil this year. If we wait until June 1 - then we could save an additional 1.45 but then we have 1.45 in "dead money" next year.

That is why cutting Moulds didnt save any money this year - where it saved us is next year.

I like the fact that they are fixing the cap by cutting dead weight. Trade Carr, Cut Domanick and Wong. We won't be able to afford much this year - but next year we will have huge money.

GTFan
03-04-2007, 11:45 AM
My understanding of "dead money" - which is signing bonuses that were spread out over a players full contract (in other words - a 5 million bonus on a 5 yr contract would count 1 mil per year against the cap plus the players salary - so, if you cut him after yr 2, you have to accelerate the remaining bonus money which becomes "dead money" - so you take a 3 mil hit but you save the yearly salary)

When you cut a player before June 1 - you take the "dead money" hit that year.
When you cut a player after June 1 - you split the hit - half that year and half the next (but I have heard you can designate 2 pre-june1 cuts as post to complicate it a little)

So, when a player has a huge signing bonus, it can cost more to cut them than pay their salary - for that year anyway. The benefit is that they are off the books for the future.
For example, Domanick signed a large contract with a hefty signing bonus. So, his salary is 3.34 and signing bonus allocation is 1.3 - and he is signed through 2009 (with an escalating salary of 4.18 in 2008)
So - if he is cut - then we get to lose the 3.34 in salary (and future salary) - but we have to take the full signing bonus allocation (1.3 times 3 years) - of 3.9 mil. So - by cutting him now, we only save .8 mil this year. If we wait until June 1 - then we could save an additional 1.45 but then we have 1.45 in "dead money" next year.

That is why cutting Moulds didnt save any money this year - where it saved us is next year.

I like the fact that they are fixing the cap by cutting dead weight. Trade Carr, Cut Domanick and Wong. We won't be able to afford much this year - but next year we will have huge money.

My understanding is that if you cut after June 1, you are just assessed that year's bonus to that year's cap and then the next year the rest of the bonus is applied to the cap. So, I don't believe it's half and half. The hit we took on Gary Walker in 07 is enormous b/c the Texans only counted one year of his bonus toward 06.

nunusguy
03-04-2007, 11:54 AM
As an aside, that means McClain has demonstrated his ignorance the last couple days talking about the Texans needing 3-4 years to clear their dead money off the books.
I dunno 'bout ole JM ? His recall of facts and understanding of some concepts that should be elementary in his line of work is disappoing and downright surprising some times.
On the other hand, he functions pretty good in formats where he can tell stories, and I catch him on SR 610. Hey whatever it takes to get info on the
Texans/NFL.
BTW, htere seems to be some tension between McClain and John Granado ?

aj.
03-04-2007, 11:58 AM
In dead money split situations, you have to take at least one year's proration in the current year. Teams invoking the new split rule (and you can do this for only two players) carry the player's entire hit until June 1 - then the split goes into effect. After that, (for new split rule and old dead money rules) teams can carry more than a one year proration in the current year if they want, i.e., they could go 4 mil/4mil to depreciate an 8 mil dead money hit over two years on a player with 4 years remaining vs. 2 mil/6 mil over the same two years. In that example, 2 mil is the minimum the first year.

Lucky
03-04-2007, 12:02 PM
Teams invoking the new split rule (and you can do this for only two players) carry the player's entire hit until June 1 - then the split goes into effect.
I thought the team could take the cap savings from the split right away, as opposed to carrying the cap number until June 1. Otherwise, it's the same split rule as before, right?

threetoedpete
03-04-2007, 12:11 PM
So when does all this "dead money" come off our cap? Is there any way we can just "eat it" all this year so we've got a boatload of money next off season?

I would just rather try to save money this offseason and sign minimal free agents, have a great draft, then add a few key pieces NEXT offseason if we have the money.

The year they quit overpaying for thirty something has beens with little tread left on the wagon wheels that they cut the very next season?

I agree. It comes down to what way you flavor your coffee as to which way that is...Draft o-lineman and DBs this year and set up the '08 draft for a QB and RB. Or move up at the expense of pixs and go get All day. Or stand pat and draft Laron and fill in BPA as the draft warants. The only problem with the latter two, once you get past the first two OTs in the first round and the gaurd/Rt prospects, the pickens get down to Seth Wand Guys. Levi Brown at his worst locks down ORT. At his best, in a best case scenario, he devlopes his quick feet and becomes a franchise OLT at a bargin price. There is no rush to hurry Charles Spencer back. You are watching what these left gaurds are going for this off season in free agency aren't you ? They need to re do Pitts' deal also next year. He's not the best in the league by no means. What he is, is a bargin. OTOH, there should be a very good crop of OLT prospects in the '08 draft. One year though, they have to adress OLT. My book says that five year old hole is the first thing you check off the list. I can find an outsanding FS , franchise RB any draft. OLT's otoh....well you know the rest.

yourfavoritetexan42
03-04-2007, 12:29 PM
I have a feeling we will be next years 49ers... go 500... and going into the offseason look like a threat...then get some huge signings...and people will be scared of us in 08... I just don't like waiting...but if thats what it comes down to then I'll be happy. Some positives that could come out of this year though, whoever our draft pick might be, be a rookie of the year, making our team thrive on ?, Mario, Demeco, AJ, D-Rob etc. And if Carr just had a monster year and removed all doubt about him being able to be a good qb, a healthy o line... I mean we have the talent for all that to happen, its just what those players do this off season, instead of worrying about who we are going to get, they just need to control what they can control.

aj.
03-04-2007, 01:05 PM
I thought the team could take the cap savings from the split right away, as opposed to carrying the cap number until June 1. Otherwise, it's the same split rule as before, right?


Some of this gets a bit confusing (CBA Article 24, Section 7 stuff)

Before the new CBA, for any players removed from the roster pre-June 1, teams had to take the entire cap hit in the current year for any unamortized signing bonus amounts.

Effective with the new CBA, teams are now allowed to remove two players from their roster pre-June 1, and treat the cap acceleration as if it was a post-June 1 transaction, i.e., split the acceleration over two years, however, the player's full cap charge including base salary, prorated signing bonus, and any unearned LTBEI's remains on the team's cap until June 2.

For players removed from rosters post-June 1, it's the same as it's always been, i.e., the future years unamortized signing bonus is included in the next years cap while the current year's proration is carried in the current year.

I'm not certain, but pretty sure that the current year proration for a post-June 1 cut/acceleration is a minimum and not an absolute. Teams can take more hit on the current year if they can manage it. You just won't find that in the CBA anywhere.

The 'pre June 1 release/post-June 1 benefit' helps players by allowing teams to release them during the frenzy of FA in March when the market may be better than in the middle of summer. It also helps the teams by allowing them to spread signing bonus acceleration over two years - but they have to wait until June 2 to do it.

I haven't been as close to this as I used to be so I could be fuzzy on some details/interpretation.

Lucky
03-04-2007, 01:26 PM
The 'pre June 1 release/post-June 1 benefit' helps players by allowing teams to release them during the frenzy of FA in March when the market may be better than in the middle of summer. It also helps the teams by allowing them to spread signing bonus acceleration over two years - but they have to wait until June 2 to do it.
I guess it could also help teams that have a player who is due some kind of roster bonus between March 2 and June 2. Maybe.

The whole June 1 release/post-June 1 benefit stuff begs the question, "Why haven't the Texans cut David Carr & Domanick Davis-Williams?" Even if the Texans took all of the bonus money hit in '07, they would still save $4 million for this year's cap. What do they think Carr will bring in a trade? A 4th or 5th round pick? Is that worth an extra $4 million that could be spent on FAs, right now? Seems penny wise and pound foolish.

run-david-run
03-04-2007, 04:01 PM
With DD, I still think they are hoping to see if he comes back, as with DC, they are trying to work a trade. Anyway, all of this stuff is pretty depressing, so I'll go back to daydreaming about our $30M cap next offseason. Who's contracts are up next year?

Xman
03-04-2007, 07:13 PM
I just hope we take as much as we can this year - then move forward.

Ahman will work for a couple of years at RB (I really wanted AP and would still took hm if he slid - he is going to be great - but he will be gone earlier and now we wont have to deal up).

I would even take Quinn if he was there - and sit him behind Sage for a year. But, I think the team would have to admit that 08 is a sacrifice year to do that. I think it is anyway - but the tema wont admit it and will drag out the chance for a really good team for a couple of years. At least we signed AJ.