Cap implications if we sign a big name free agent

Discussion in 'Texans Talk' started by gtexan02, Feb 11, 2009.

  1. gtexan02

    gtexan02 Working?

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    This isn't taking into consideration the ramifications of the uncapped year in 2010, because I'm not sure how teams are allowed to allocate bonuses/salaries for that year. Im sure there are plenty of rules, so I'm just going to assume its business as normal.

    Lets assume that Julius Peppers walks into the Texans FO and says "I want to sign with you guys, but only if you make me the NFLs highest paid defensive player." What would this do to our team?

    Inthebullseye.com reports that the Texans are currently ~$38 million and change under the cap (if you include the recent savings of ~9 million from cutting Green/Greenwood). I fully expect us to get rid of Demps and Chris Brown, freeing up just under ~4 million more in cap space. This should bring our total to around ~42 million or so.

    The important free agents we have this year are Dunta Robinson (UFA) and Owen Daniels (RFA).
    Next year, we will have Chester Pitts, Kevin Walter, Kris Brown, and Demeco Ryans.

    We also have to remember that we only have around 40 players actively signed and need money for draft picks. So in reality, while we have a lot of cap space at the moment, our "useable" cap space is probably closer to about 20-25 million.

    Now what about Peppers? Last year the Vikings gave Jared Allen a 6 year, 74 million dollar deal with 31 million guaranteed. Allen's cap hit this year was about 12 million dollars. Assuming Peppers wants at least what Allen got plus 5%, that means he is probably targeting a 6 year, 78 million dollar deal with about 33 million in guarantees. That would bring his cap hit to 13 million per season. Signing just Peppers would effectively reduce our useable cap to about half, making it extremely difficult to franchise tag a guy like Dunta Robinson.

    Just something to think about
     
  2. TEXANRED

    TEXANRED Texan-American

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    Thats why you front load the contract, pay him 15 million this year and be halfway over the guarantee money the first year. That way when we cut him in three years to resign Williams we wont take such a big cap hit.

    It would be worth it to not only win the division but a few championships along the way.
     
  3. TheRealJoker

    TheRealJoker Hall of Fame

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    If you take into account signing Peppers means you also more than likely just traded your 1st round pick for him you have to subtract the cap hit of the # 15 pick from Peppers' cap hit. "Lessening" the blow but point taken, any big splash signing pretty much means we're sacrificing depth for 1 player. A very dangerous proposition in the NFL where 1 injury can make you go from playoff team back to 8-8 team (in this case if Peppers were to get injured).
     
  4. gtexan02

    gtexan02 Working?

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    Front load half the signing bonus this season? If he's expected to be paid 7.5 million in salary per year and you allocate 15 million of the guarantees to this season his cap number becomes an astronomical 22.5 million. That would basically prevent us from signing any other free agents this offseason. The cap goes up a pretty decent amount each offseason, so it might be better to backload the salary whiel frontloading the bonus. Most players won't sign onto that though
     
  5. TheRealJoker

    TheRealJoker Hall of Fame

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  6. TEXANRED

    TEXANRED Texan-American

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    I may be missing the math but if I only guarantee 30 and I pay him 15 where does the 7.5 come from?
     
  7. TEXANRED

    TEXANRED Texan-American

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  8. gtexan02

    gtexan02 Working?

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    In my example Peppers would be signing a 78 million dollar deal, with 33 guaranteed.

    That would mean each season if it was divided equally, he would get a base salary of 7.5 million and a bonus allocation of 5.5 million. His total cap hit each season would therefore be 13 million. You could front-load it with a higher portion of the bonus being paid in the first couple years, but that would make it pretty difficult for us to keep even some of our current players
     


  9. TEXANRED

    TEXANRED Texan-American

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    There is nothing in the rule books about dividing his salary equally. They could pay him a base salary of 1 million and then 15 of his 33 signing bonus. At the end of the day the only thing the Texans are liable for is the 30 million.
     
  10. gtexan02

    gtexan02 Working?

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    I realize this, but NFL players and their agents are pretty intelligent, and they aren't going to sign on to a deal that prorates the entire signing bonus to the first 2 years and all the salary to the last 2 years. Its basically guaranteeing that they only see a portion of their total contract
     
  11. TEXANRED

    TEXANRED Texan-American

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    I know, I was just using that as an example of front loading.

    I would expect to see something similar to Green's original structured contract. He got most of his guaranteed money up front.

    I would expect the Texans to be able to pay out 13 million over the next 3 years and then break up the rest of his bonus over a two years like the rest of our over priced FA's.

    So realistically we could pay him a base of 7 and his bonus of six over three years and then pay out 6 million a year after he is cut.
     
  12. infantrycak

    infantrycak Mod. Staff Member

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    Actually that is not uncommon at all. In fact there have been quite a few players who have signed with first year base salaries at basically league minimum because they are also receiving their signing bonus. The guaranteed money seems to be more important to the players than the total of the contract or playing the whole thing out.
     
  13. ChampionTexan

    ChampionTexan Site Contributor

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    Yep, and Jared Allen is one of those examples. If you look at his '08 numbers, his base salary is only $750,000, but he also received approx. $20.5 Million in bonus payments, with more guaranteed money to be paid in the future.

    I don't know if it's possible to calculate salary cap impact based on the information that's available, and even the best sources (such as ITBE) include a disclaimer of accuracy. For example, the original poster included a '08 salary cap impact of $12 Million for Jared Allen's contract. I'm not sure where he's getting that, but I see other places that show an $8 Million impact, and I'm not sure which is correct, or if there's any definitive way to find out. If the $12 Million is just taking the $74 Million contract and dividing by 6 years, then I know it's not accurate.
     
  14. gtexan02

    gtexan02 Working?

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    Heres where I saw the 12 million figure:
    http://myespn.go.com/blogs/nfcwest/0-8-88/What-cap-space-means-in-NFC-West.html

     
  15. ChampionTexan

    ChampionTexan Site Contributor

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    And here's where I got my $8 Million.

    Jared Allen

    I can come close to the USA Today number, but I can't get it exactly. The fact I can't re-create their calculation doesn't mean it's wrong, and if I were able to re-create their calculation, that wouldn't mean it's correct.

    There's enough ways to structure a contract that length, total value, and guaranteed money just doesn't give you enough information to definitively know the salary cap impact (or necessarily even make a good ballpark guess). That's why I think Anthony Weaver's got more unamortized bonus on his contract than $5.4 Million, but I don't know that for certain.
     
  16. infantrycak

    infantrycak Mod. Staff Member

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    It is hard to get exact cap numbers because of all the various bonuses they throw out there for work-outs, LTBE, ULTBE, etc. One of the big spots folks miss things is like on Antoine Winfield's contract. The year he was signed the Vikings had a ton of cap room so they used a roster bonus for the 2nd day of the contract instead of a signing bonus. That made it all go on that year's cap but obviously that reduced the effect on later years--great move if you have the cap room to do it. Lot's of folks just assume the guaranteed money is signing bonus and pro-rate it.
     
  17. Polo

    Polo Guest

    I think if the Texans wanted to sign Peppers they could make it happen without sacraficing too much depth or young talent.

    If the Vikes could get Jared Allen we should be able to get Peppers.
     
  18. Maddict5

    Maddict5 Hall of Fame

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    hes a FA who's unlikely to be franchised
     
  19. WolverineFan

    WolverineFan Hall of Fame

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    The problem with frontloading a contract is if the guy performs very well in year 2 or 3 he will want to restructure his deal to make more money in those years. It's always an endless cycle with contracts.
     
  20. leebigeztx

    leebigeztx Hall of Fame

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    I'm not going to try to dispute the numbers so I well say what I know. The panthers can not nor will not franchise peppers. If they franchise Peppers to the tune of 17m which is over 1m per a game plus that kills them resigning Gross plus they are 7m over meanin they have to cut players just to franchise tag Peppers.

    The rookie pool of money is only about 3m of the cap. Daunte, if they franchise tag him would cost 9m this year, but can be reduced if they strike a deal. So even if they franchised Robinson and made Peppers or Hanesworth 11m per players, they would still have 20m to give extensions to players. A te like OD will cost about 5mm in acap space, walters 4m and ryans about 4m which leaves about 7m. They can also cut weaver and get more money under the cap.
     

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