NFL Cap Management: Some trades donít make dollars or sense
It’s easy to throw out the notion of a trade; the idea to get equal or greater value, putting your club in a better CAP situation and or with a prime pick in the coming draft. If only it were that easy.
Real time example
Player finds himself on a team entering 2013 League Year (LY) almost $24.0M over projected CAP. His individual charge as a Top 51 on his roster is $9.0M calculated; $3.0M in 1 year proration of past guarantees, $3.0M in Paragraph 5 (Base Salary for 2013), and $3.0 in a series of three $1.0M bonuses over the course the time leading up to the 2013 regular season.
Any and all prorated portions are the responsibility of current Club. Transactions such as outright release or trades transpiring prior to June 1st accelerate all proration to the current LY. Keep that in the back of your mind.
Base Salary is responsibility of the current Club Player is under contract with at the time. Any bonuses are responsibility of the Club Player is under contract with at the time the bonus is earned.
Current Club can attempt to trade Player at the start of the LY to October 29th, but there will be financial ramifications. What the Club is willing to incur is up to them as the “cost of doing business”, when they choose to do it should be analyzed regarding CAP/contract management.
Trade scenarios & ramifications
Scenario 1 – Club initiates trade prior to 5th day of new LY, significant because it’s the date of $1.0M Roster Bonus (RB). If trade were initiated, Club would be hit with immediate $12.0M CAP charge (current $3.0 in proration + $9.0 in ensuing years). New Club is responsible for all of existing three $1.0M bonuses, starting with the 5th day RB & base salary.
Scenario 2 – Club can’t initiate trade before 5th day deadline and is responsible for $1.0M in RB earned. Trade is initiated after the earned RB and Player now accounts for $3.0M in current year proration, $9.0M in acceleration and $1.0M for earned bonus. Total of $13.0M in the 2013.
Scenario 3 – Club can’t trade Player prior to earning Offseason Workout Bonus ($1.0M around mid June). We’re now past June 1st. Current Club pays Player $2.0M to account for RB and Workout Bonus. CAP charge for ensuing years is alleviated in 2013 as result of post June 1st transaction. Remaining $9.0M is accounted for in 2014. Club is responsible for $3.0M in current year proration and $2.0M in Bonuses.
Scenario 4 - Club can’t trade Player until after start of Training Camp. $1.0M
Reporting Bonus is earned by Player. Club has paid $3.0M in cash for bonuses and incurred $6.0M in Cap charges for 2013 LY. Trading Club is responsible only for the $3.0M in base.
Re: NFL Cap Management: Some trades donít make dollars or sense
I'm certain this guy is trying to show the cap ramifications of trading Darrelle Revis' contract, without actually specifying it. I didn't see anywhere in that trade scenario that he said the player was the #1 CB in the league for the last few years. That's kind of a big deal when evaluating any trade scenarios. No it's certainly not worth trading a high pick for Revis if you're a team that didn't even make the playoffs this year, but if you're the 49ers, Ravens, Pats, etc and you have a late 1st round pick, why not? He's an upgrade at CB for any team if he's healthy, and it's likely he will be a well above average player in 2013.
From the Jets perspective, I think the best thing to do is make cuts elsewhere and cash in now what you can. Yes trading Revis now makes the cap hit higher, but if we're going into full rebuild-mode, let's cut the fat, tank for a season, and get it over with. Nothing sucks more than being mediocre for years on end. If you can get a 1st+more for Revis, it will absolutely be better than cutting him at the end of next year and getting nothing besides a more favorable cap hit. (June 1st cut would make it a 3m hit in 2014 and 2015).
Jets' Cap Casualties:
Bart Scott - Savings of 7.15 million. Possible to prorate the 1.5m in signing bonus over two years if June 1st cut or designated as such.
Calvin Pace - 8.66m, 3m signing bonus could be prorated over 2 years for savings of 10m in 2013.
Jason Smith - If Sporttrac is right, he is set to make 700k salary in 2013, and an 11.25 million non-guaranteed roster bonus. Yeah, right... CYA! Savings of 12 million.
Boom! That took me 10 minutes to fix their cap, and now they have space to trade Revis to the highest bidder. Release Sanchez for a small cap hit in 2014 (about 5 million), and start the rebuilding process for the 35th time in New Jersey. Cutting or trading Sanchez saves about 38 million over 3 years, and saves the team from oodles of ridicule.
Anyways, it's nice to know that a guy like Ted Sundquist (former Broncos GM) uses the same sort of information that us amateur GMs use for trade scenarios. He seems to be following Sportrac's info with the roster bonus, workout bonus an camp bonus. Just kind of funny, because there isn't a consensus on how Revis' bonuses are structured.
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