Quote:
Originally Posted by TheMugwump
I am probably the least informed on cap issues on this board (which still probably puts me in the top 5% of Colts fans, judging by comments on other Colts pages), but I know one of you will know this...
Is it likely that they'll front load the contracts with extra large signing bonuses? Since they are projected to have such a huge amount of money next year, wouldn't that lower the cap hit on future years of the contract? For example, if Nelson signed for six years/$50 million, but $20 million was a signing bonus (I am just making up numbers to understand the principle), then wouldn't the remaining $30 million be divided by the six years for a future cap hit of only $5 million a year?
I ask because I truly don't know, and trying to look up info on how the cap works just leads me to things that put me to sleep.
|
It's actually kinda the other way around. The up front bonus is prorated over all the years of the contract, and then if the player is cut before the contract ends, the remaining balance of the bonus telescopes into the year he was cut. It's a way to give the player a bunch of money without it counting against the current cap year.
The yearly salaries can be manipulated as well - so the money isn't always distributed equally over the course of the contract. In fact, lots of times the largest salaries are placed in the last few years of the contract, and then voided when the player gets cut before then. In this way, the media, team and player get to report that the player got the largest dollar figure contract in history, but everyone involved knows as a practical matter that it won't be paid and the player will never see the giant last salaries. Adding inflated, meaningless extra years to the back of the contract also serves the duel purpose of allowing the team to spread the up front bonus money over more years, thereby lowering the cap impact on the earlier years.
It's all financial engineering, and is pretty fascinating and can be very creative. Analyzing the structure of a contract can tell you a lot about how the team thinks of the player, and whether the team is going to have any flexibility in future years. All of this manipulation will eventually catch up with the team, leading sometimes to years when a team can be WAY over the cap like the Saints were this year if I recall ($100M plus over).