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Breaking Down Contracts

Discussion in 'Fan Zone' started by Galian Beast, Jan 23, 2014.

  1. Galian Beast

    Galian Beast Well-Known Member

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    I think it's important to look at how the front office is making a lot of decisions lately. In general I am pretty pleased with their moves, however that will be thrown out immediately if Ware is restructured.

    I'm going to start with Sean Lee's contract extension.

    Sean Lee was in his final year and he was making 630k dollars base salary with a 300k proration of his 1.2 million dollar signing bonus.

    Thus his rookie contract was 4 years 3.49 million. This should highlight just how important good drafting is. That is REALLY cheap.

    Moving forward, we extended him 6 years with a 42 million dollar contract. 10 million dollar signing bonus. 16 million dollars guaranteed. Average 7 million dollars per year.

    First reminder about signing bonus proration is that you can only prorate them over 5 years. This is why you restructure contracts, because you can divide the cost into years that don't currently have a proration in them. Money is also cheaper in the future than it is now.

    The first thing we did with the Sean Lee contract is we paid a bit of that signing bonus early by paying starting it in the 2013 year.

    The team obviously had injury concerns about Lee, and with good reason. The contract was really good for both Lee and the Cowboys. He was guaranteed 16 million, and right off the bat we accounted for 2 million of that against the cap.

    Even though Lee averages 7 million per year, his base salary never reaches 7 million until his last 3 years. Only in 2017 does that number reach a great height because of the 2 million annual proration bringing it to 9 million.

    What does that mean? Basically it means that 2017 is the year we decide whether or not we want to keep Sean Lee or not. In other words he has until then to show that he can stay healthy and stay productive.

    In 2014 he makes 5.5 million base salary, which is the highest base salary he is scheduled to make until 2017.

    Why is that? Because we planned to restructure his contract. This pushes more money into future years, including the first of the two final years in which he doesn't have any prorated signing bonus.

    This brings his base salary down to 730k dollars and prorates about a million dollars per year into the years between 2014 and and 2018.

    This brings him up to cap hits of 5.5 and 6 million in years 2015 and 2016, though we could still decide to restructure him one more year if we like.

    We're not afraid to pay Sean Lee well, but he will still have to earn it.

    The dead money to cut sean lee in 2017 assuming we don't prorate him in 2015, would be 3 million dollars... which would be an ultimate cap savings of 6 million dollars.

    I would be comfortable restructuring him in 2015 if he could stay healthy in 2014. It doesn't change a whole lot though either way.
    Zordon likes this.
  2. CyberB0b

    CyberB0b Well-Known Member Zone Supporter

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    I don't see him playing through 2017.
  3. Galian Beast

    Galian Beast Well-Known Member

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    Tony Romo

    The Tony Romo contract extension was done for the following reasons.

    1. Lockup franchise player
    2. Open up cap space in 2013, by restructuring his 2013 cap hit into future years.
    3. Be manageable in 2014 and 2015 through restructuring, which is why it was essentially a 7 year deal.

    A lot of people believe that Romo got a 108 million dollar contract, but this has been refuted time and time again.

    Outside of 2014 and 2015 which were built to be restructured because of league rules minimizing signing bonus proration to 5 years, Romo's contract is extremely manageable until 2018 and 2019, and even then what the going rate for quarterbacks is likely to be, I'm not all that certain the Cowboys would want to be rid of him depending on what level he is playing at. Either way those last two years are option years.

    As it stands right now the Cowboys could cut Romo in 2017 and there would only be 5 million dollars in dead money. That being said... he is going to have to be restructured in 2014 which will increase that amount and add dead money in 2018.

    After the restructure cutting Romo in 2017 would cost 10 million, but only 2.5 million in 2018.

    What does that mean? You still go through with the planned restructure in 2015 if he is still playing well. And you really have to hope that he is. Why?

    Romo's cap number after the 2014 restructure makes his 2015 cap number 27 million, with 29 million in dead money. Romo would have to take a serious decline for this to be the way to go.

    You restructure much of his 17 million base salary, and you take that 27 million dollar cap hit to 14.2 million dollars, which is not a lot for a franchise QB. It just isn't.

    So what happens in 2016?

    Well his 2016 cap hit would be about 20 million dollars. You're already expecting the salary cap to rise significantly in 2015, but Eli Manning had the same cap hit this year (which is a lot more in 2013 than 2016).

    Stafford was at 17.8, Manning at 17.5, Brees at 17.4.

    So you keep in mind market inflation, and then you see why paying romo for as long as it is feasible makes sense.

    But if he can't go, you can pull the trigger on cutting him as early as 2017, which accounts for more half of his entire contract. The idea of cutting him before 2017 though? Not going to happen. Why? Because you don't save a cent. His contract is guaranteed through 2015 with the assumption that you restructure in 2014, making it very difficult to cut him in 2015.
    Beast_from_East likes this.
  4. Galian Beast

    Galian Beast Well-Known Member

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    Assuming he stays healthy, he is likely to be the leader of this defense.
  5. CyberB0b

    CyberB0b Well-Known Member Zone Supporter

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    I was alluding to his injury history. I think we should keep his contract as is, and not restructure it.
  6. Galian Beast

    Galian Beast Well-Known Member

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    LOL... you're saying that because dollar for dollar you don't know what you're talking about...
    Corso likes this.
  7. jterrell

    jterrell Penguinite

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    Not sure the goal of the thread.

    Dallas structures all of it's non-rookie, non-minimum wage type contracts very similarly.
    They build in planned restructures to minimize cap hits on the front end.
    No real mystery to them. spotrac and overthecap both have the details.
    That's why every Cowboys deal has fans smiling the day it is signed and crying the day the player is gone.
    NO ONE was up in arms mad when we signed Demarcus Ware. The same yahoos are mad now... go figure.

    GTHO with Sean Lee love while offering disdain for Ware. Ware earned a Hall of Fame invite as a Cowboy.
    Lee has merely garnered player of the month awards. Big friggin difference.

    Sean Lee is much closer to Miles Austin with brief flashes of greatness than he is Ware who sustained absolute All Pro levels for a long time before he got paid.
    treykin32, pancakeman and dogberry like this.
  8. Pabst

    Pabst Active Member

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    I posted this in a prior thread related to 2013 snap counts, but I think it's contents fit here as well:

  9. Galian Beast

    Galian Beast Well-Known Member

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    People seem plenty surprised and don't seem to understand much of it. Yourself included based on many of your previous posts on the subject.

    I had no problem with Ware's extension, however his productivity no longer matches his contract, and thus he should be released.

    Ware going into the hall of fames doesn't make him worth 13 million dollars next year.

    Is Sean Lee worth 7 million a year based on how he has played? Yeah, he is. And if he can't stay healthy or if his production dips, that will change as well.
    BigStar likes this.
  10. CyberB0b

    CyberB0b Well-Known Member Zone Supporter

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    Restructuring an injury proned player who is already under contract. Where have I heard this before? Oh yeah, Jay Ratliff.
  11. jterrell

    jterrell Penguinite

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    This is real simple. If Lee is worth 5m, Ware is worth 20m.
    Sean Lee has done absolutely nothing over any given time period.
    He's played in 17 games the past 2 seasons.
    And if forced fumbles is major concern for Ware..., Lee has 2 for his career.

    Ware is aging and declining. But he is an elite pass rusher and those guys get flat paid. There are 6 DEs who average 12m or more year not including 3-4 DEs or 3-4 OLBs.
    Lee has been hampered by injuries throughout both college and his early pro career suggesting he doesn't have a body that can stand up to the NFL grind.

    Ideally, you'd not pay either guy big money next year but the contracts guarantee both make big money next year whether here or not.

    Lee has the 5th most guaranteed money of any inside/middle linebacker in the NFL which is truly astounding.
  12. jterrell

    jterrell Penguinite

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    You actually seem the most unaware of all. You are typing up details as if you just found that stuff out.

    And your logic is flat terrible.

    We should cut Ware because pushing money forward for him would be stupid.
    But we should definitely push money forward for the guy who has averaged 8 games a year the last two years BEFORE we get to his big base year and decide to cut or keep him.

    Basic math suggests it is not so smart to create lots of dead money before you hit an extension or restructure marker.
    BECAUSE when like Ware now you eat 8m to cut a guy or 7m to extend him it becomes very hard to see the value of paying MORE to be rid of that player.
    CyberB0b likes this.
  13. TwentyOne

    TwentyOne Well-Known Member

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    The Romo deal is flat out bad.

    And i dont like the Lee contract also. You dont pay a player Navarro Bowman money that is a) 40% of playing time hurt and b) not that good of a player.

    Our so called Cap guru doesnt has a clue. I know he talks different but thats just his ego he got from his dad.
    Hope we'll get him some help because i dont see JJ fire him.
  14. Galian Beast

    Galian Beast Well-Known Member

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    You realize that Sean Lee's contract is an average of 7 million per year, and Bowman's contract is an average of 9 million per year. You know that right? You realize that Sean Lee's contract is significantly more backloaded than Bowman's right?
  15. jterrell

    jterrell Penguinite

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    You do realize Bowman has only 11mil guaranteed money while Sean Lee of the awesome dependability has 16m?

    SF is paying Bowman for his performance as he goes and if he has to be cut it will cost them next to nothing and net them quite a bit of money back.
    When Sean Lee has to be cut we are set to be eating dead money and hoping to find a replacement from the draft.

    It is the fundamental difference between good and bad cap mgmt.
    Dallas is forced to lock itself into deals with guarantees and larger dead numbers because it has managed the cap poorly through this current CBA.
    --fair to note the cap penalty has hurt.
    Zordon likes this.
  16. Corso

    Corso Well-Known Member

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    You are a sage here.
    I, for one, love your posts and many of the rebuttals (although some bear good points) expose their ignorance which bears the fruit of your efforts more sweet.

    Keep It Up, my friend.
    I deeply appreciate it.
  17. Corso

    Corso Well-Known Member

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    Good argument...
    Even sages aren't perfect...
  18. bkight13

    bkight13 Well-Known Member Zone Supporter

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    I always appreciate your breakdowns. It takes a lot of time to sort through those contracts.

    I don't know where you are getting your numbers from, but SF is not paying for Bowmann as they go and they guaranteed him 25m. His base salaries were 540k and 630k the last 2 years and he has 7.7m in dead money that hasn't been accounted for without adding any base salaries that are guaranteed for injury. He just blew out his knee and if he never comes back the same they are on the hook for a ton of dead money and real money. His contract is very similar to Lee's with year to year roster bonuses, but they guaranteed a lot more money. They are 2 years into his extension so it looks better than Lee's right now because they have eaten more of his signing bonus.
  19. Galian Beast

    Galian Beast Well-Known Member

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    The guaranteed money doesn't matter. The way those contracts are set up, they're both essentially guaranteeing the first two years of the contracts. Sean Lee's contract is more backloaded than Bowman's which is why he got a bigger upfront guarantee.

    Sean Lee is absolutely getting paid for performance as well. Sean Lee signed a 6 year 42 million dollar deal. HALF of that comes in the last three years in base salary. Not to mention much of his pay depends on meeting playtime expectations.
  20. Galian Beast

    Galian Beast Well-Known Member

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    Year for year comparison between Sean Lee's base pay and Navarro Bowman's base pay

    2014:
    SL - 5.5 mil (likely to see some restructuring)
    NB - 4.7 mil

    2015:
    SL - 2.5 mil
    NB - 4.7 mil

    2016:
    SL - 3 mil
    NB - 5.85 mil

    2017:
    SL - 7 mil
    NB - 6.75 mil

    2018:
    SL - 7 mil
    NB - 8.75 mil

    2019:
    SL - 7 mil
    NB - Free Agent... expect it to be more than 7 million (average)

    But obviously you can't look at base salaries. Who has more remaining money prorated?

    Sean Lee has 8 million in proration and bonuses over the course of 4 years (the less amount of money and less amount of years being better).

    Navarro Bowman has 11.45 million over the course of 5 years years in varying amounts.

    Sean Lee is also going to lose 1.5 million in 2015 if he doesn't make 80 percent of his games between 2013 and 2014. 80 percent of 32 games is 25.6. Not sure how they calculate the .6, but given that he only played in 11 games in 2013, he has to at least make it through 14 games in 2014. Which is essentially the entire season.

    Otherwise is 2015 base pay is 1 million dollars. Which as we have seen is significantly cheaper than Bowman's.

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