Texian
Hall of Fame
I was rereading these pages, and I'm still not sure how it all works.
http://overthecap.com/a-guide-to-the-nfl-salary-cap/
http://overthecap.com/thoughts-andre-johnson-lessons-learned-contract/
I can't speak for others, but in my mind, if we're talking about more guaranteed money for AJ, it has to be beyond this year.
For example, Brady's contract stipulates that his salary for next year (2015) is guaranteed as soon the new league year starts in March of 2015.
He doesn't have to worry about getting himself hurt during the off-season, etc.
No matter what, I think we are just speculating at this point about what's been going on.
I'm not sure about trading AJ this year.
What is it that we can get in a trade.
Will that player and a saving of $2.6M be enough to compensate for his loss this year?
What happens if the Texans hold their ground and AJ chooses to retire?
What happens to the dead money?
This is purely a hypothetical and role playing by you and me to help illustrate how restructuring a contract works for the player and the team. You're Andre Johnson and I am Rick Smith (see how nice I am). Here we go:
The deadline (usually a Wed.) for the 53 man roster/salary cap is 4PM the day before the first regular season game is played (usually a Thurs). A few days before the deadline, me, Rick Smith comes to you, Andre Johnson and I say,
Rick Smith - "Andre I need for you restructure your contract to help us with the 53 man roster, meet our financial obligations and comply with the salary by 4PM on Wed. Understand that if you're on the 53 man roster at 4PM Wed. your $10 mil 2014 salary is fully GTD. We wouldn't do this today, write you a $7 million check, if we didn't think you were going to be with us on Thursday. Therefore in order for us to do this we want to convert $7 million of 2014 salary to a signing bonus. We're prepared to write you a check today for $7 million. Now when we do this your weekly checks for the next 17 weeks, the $588,235.29 ($10,000,000/17) will change to $176,470.58 ($3,000,000/17) to reflect that we've already paid you $7 million.. Remember when you add your converted $7 million signing bonus and the $3 million salary divided by 17 weeks you're still getting your $10 million for 2014."
"By converting $7 million of your salary to a signing bonus, it allows the Texans to spend $7 million more over the salary cap this year to help us meet all of our financial obligations. We certainly appreciate you helping the team in this way."
Andre Johnson: - "Why do you get to spend $7 million over the salary cap and will I have to pay any money back?"
Rick Smith: - " No, you don't have to pay any money back, your $10 million is fully GTD for 2014 whether you play or not. It does not effect your contract in any way in 2015 or 2016. That remains the same."
"The rules of the NFL allow teams to do this, restructure contracts to help them comply with the salary cap. Basically how it works Andre, is the NFL allowed us to borrow $3.5 million from our 2015 salary cap and $3.5 mil from our 2016 cap in order for us to have enough money to start the 2014 season. Next year if the salary cap is $135 million per team, we, the Texans will only have $131.5 million salary cap to start the 2015 new year in order to pay back the money we spent over the salary cap in 2014." The same procedure will apply in 2016. Does that make sense?"
Andre Johnson: - "Yes, Yes it does. Now where is my $7 million check?
Does this help?
If AJ retires the Texans are responsible for all prepaid bonuses that haven't been accounted for, ie: dead money in 2014, that amount is : $11,964,166.00
This is the way it actually works, if AJ's 2015 salary cap allocation is $16,144,583 and his 2016 salary cap allocation is $14,675,000, before any restructuring in 2014, and let's say AJ restructured $7 million of his 2014 salary, his NEW 2015 salary cap allocation would be $19,644,583 and his NEW 2016 salary cap allocation would become $18,175,000.
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