DMN: Cowboys' offseason: Cap woes make draft, bargain hunting critical

Discussion in 'Fan Zone' started by jobberone, Jan 3, 2014.

  1. Bluefin

    Bluefin Well-Known Member

    4,533 Messages
    2,231 Likes Received
    It isn't just that Stephen Jones is expecting a real bump in the 2016 salary cap from new TV revenues.

    Every year the team waits to release a big contract player, another large proration of signing bonus money comes off the cap.

    Demarcus Ware received a $20M signing bonus ($4M/yr x 5yrs, '09-'13) as part of his original extension in 2009.

    So the last year of that initial signing bonus came off the books at the end of last season. Ware still has prorated bonus money on the books from subsequent restructures, but they pale in comparison to the original bonus.

    The team can realize major cap savings any time they decide to release Ware because he outlived his big signing bonus.

    As for Austin, he's in the same cross hairs that focused on RT Doug Free last off-season. Smiles hasn't lived up to his contract and he's going to be released unless the Cowboys offer him a pay cut and he accepts.

    Free and Kyle Orton have contracts designed to void following the 2014 season, which will net $8.3925M in 2015 cap savings once you add two 1st year minimum contracts to take their roster spots.

    Tyron Smith will be under contract so long as the team activates the 5th year option on his rookie contract in the next couple months.

    It will be the 2014 OL Transition tag number, which will be announced shortly and is robust in nature. But the point of the option is simply to keep Smith from becoming a free agent following the 2014 season. It allows Dallas to wait another year before having to come to terms on a long term extension.

    Tony Romo's contract will be restructured again by design, the team can create up to $12.824M.

    If Miles Austin is released as a June cut in '14 or a regular release in '15, it will net $4.0212M in '15 cap relief after accounting for a new salary taking his roster spot.

    And I already mentioned the $8.3925M net savings for Free and Orton in '15.

    That's a quick $25.2377M to help.
  2. dogunwo

    dogunwo Franchise Tagged Zone Supporter

    8,418 Messages
    3,297 Likes Received
    People are just in love with the idea of having the potential to foolishly spend a bunch of excess cap room.
    Bluefin and Kaiser like this.
  3. Hoofbite

    Hoofbite Well-Known Member

    35,102 Messages
    4,377 Likes Received
    Restructuring absolutely increases the dead money total that comes due if the player isn't living up to expectations and is cut early. There's a point in the contract where cutting a guy yields benefit, restructuring delays that point.

    If we're going to speak in absolute terms then no you could always find a way to cut someone if you wanted. Going that route though you might as well say that no amount of dead money is too high. That's ridiculous.

    I realize that. In fact I have been bringing up that very point. When do you want to take a huge cap hit for a player? When he's 26 and in likely in his prime or when he's 30 and age is starting to catch up?

    When would you rather take $16M in cap charges for DeMarcus Ware? 2014 after coming off a down season or any year prior to 2013, and particularly prior to 2012? 19.5 sacks in 2011 is a lot closer to being worth $16M than what you would expect his production to be next year but in 2011 his cap charge was under $7M. Now Dallas is in a position where they have to make a decision on the guy because they cannot justify his cap number if he isn't going to give you awesome numbers.

    Brandon Carr's contract was written with intent to restructure so you can't reasonably use an example that includes "had we not".

    Secondly, of course it's going to be the same amount because the structure of it doesn't change. Beyond that, they guaranteed those first 2 years which means its guaranteed no matter what you do with it and you actually have to get beyond the guaranteed portion to see any sort of difference. FWIW, I believe the number would be $25.5M but it doesn't really matter.

    But had they not planned to restructure they could have given him base salaries of $7.5M, $8M, $5M, $9M, $10M. He gets the same amount guaranteed and if he's cut the season after the guarantees run out, Dallas comes out with less cap charges than he's currently slotted for. If he plays 1 more season without restructuring and is cut, total cap charge is $33M. That's $2.5M more than had they structured it as I had.

    Furthermore, his current cap charge for 2014 is $12.2M whereas not planning on restructuring in the example above is $7M and his cap hit would remain lower through the rest of the contract which means that even if his performance were to slide a bit because of age the team isn't in a DeMarcus Ware situation with Brandon Carr.

    In an ideal world you may have the cap space but that's not the position Dallas has been in. They've been making room out of necessity.

    Also, having the space "now" doesn't just carry on forever. If you pull $3M from the next 4 seasons, you're short of the set cap $3M for the next 4 seasons. In order to always have more "now" you have to constantly keep creating more room with each subsequent year.

    Year 1: Free up $8M by converting $10M in base salaries. $2M deducted from next 4 years.
    Year 2: Now what? Free up how much? Anything less than $2M means "less now" at this point in time.

    Even in an ideal world what's the advantage? Just to have it? Even if you rolled it over you're gambling. You're betting that age and injury won't impact performance. You're assuming that your player will be worth that inflated cap figure. Brandon Carr is currently slotted as #3 highest cap hit for CBs for 2014 and #2 for 2015. Does his current play justify that? Will his play justify that in 2 years?

    That's what it comes down to. You can take bigger caps hits when players are younger and more likely to justify them, or you can take bigger cap hits when players are older and have accumulated wear, tear, and time.

    Throw in the fact that many older players who are still productive sign for a hell of a lot less than what a younger and equally productive player would sign for and you're basically just watching the value of your cap dollar plummet.

    There's no reason to add cap dollars to future years if you aren't actually spending it and there's rarely enough talent in the free agent pool to even acquire.

    That in itself leads into a another discussion all together that people have had on this very forum. The general opinion, IIRC, is that you can't buy a championship. Is that not what you would be trying to do by restructuring to "use" the money now?
    dreghorn2 likes this.
  4. FuzzyLumpkins

    FuzzyLumpkins The Boognish

    25,861 Messages
    12,903 Likes Received
    Then you are not paying attention. Hes been vindicated on pretty much everything from compensatory pick predictions to the accounting on his cap values to the powers Goodell is granted by the player contract.
    JPM and Little Jr like this.
  5. AdamJT13

    AdamJT13 Salary Cap Analyst

    16,227 Messages
    3,617 Likes Received
    But you've already saved the difference in increased dead money by having lower cap charges in previous years. And if you go the June 2 route when you cut a player, you're saving more cap room that season if you previously restructured him than if you did not.

    That's easy. I'd rather take the hit when he's 30, because that means I've had extra cap room for those four seasons in between -- and when I do take the hit, the same amount of money counts for a lower percentage of the cap.

    Uh, you used Carr as the example, so I was explaining why it was a smart move.

    I was talking about the cap hits for 2013 and 2014, which were the ones affected by the restructuring. I didn't include his 2012 cap number, because that was before the restructuring.

    Now you're not even talking about restructuring an existing contract, you're talking about changing the original contract (making it $600,000 less than the total value of his actual contract's first five years, by the way). And instead of having cap numbers of $3.2 million in 2012 and $5.432 million in 2013, he would have had cap hits of $9.5 million and $10 million. That's $10.868 million more than we took, which is exactly the difference in the dead money if we cut him now. So like I said, it's the same charges either way, it's just a matter of whether you want the cap room sooner or later.

    That's because you're assuming he would have signed a contract for $2.5 million less than what he actually got for the first three seasons. Sure, if we could just get players to sign for less money, we'd save a lot of cap room. Great idea!

    No, the advantage of having cap room is being able to acquire players and make your team better or to re-sign players. Not having cap room limits your ability to do that. I'd much rather have cap room and have that ability sooner than later.

    All of that is irrelevant when it comes to money that has already been paid. You're actually paying the player when he's younger and just taking the cap charges when they're older, when that money represents a smaller portion of the cap. Time is money, and putting off cap charges for as long as possible only increases the percentage of the cap you have available.

    If you could get a player to sign a $32 million contract for fully guaranteed base salaries from ages 25-30, would you rather have those salaries be $2 million, $3 million, $4 million, $5 million, $6 million and $12 million, or have them be $7 million, $7 million, $6 million, $5 million, $4 million and $3 million? He'd get the same money either way. I think it would be foolish to choose the latter option just so that his salary matched his age/performance level -- you'd have less cap room for other players for most of the contract, and you'd be using a higher percentage of your cap overall.

    Again, if cap space does not help at all, then who cares whether you have any? Why are you even debating cap strategy if you think there's no good reason to have it? And why would you care whether there is any in the future?
  6. Doc50

    Doc50 Original Fan

    2,443 Messages
    2,084 Likes Received
    Good job, Adam.

    It's just counterintuitive to a lot of folks that we don't pay as we go. That's what we've been hammered on -- the cost of interest, the value-based expenditures, the financial responsibility.

    Only this game isn't exactly played by those rules, and that remains hard to fathom.

    The current vs future value of money, and negative future interest are the keys to understanding modern caponomics.
  7. waving monkey

    waving monkey Well-Known Member

    7,471 Messages
    5,033 Likes Received
    link /

Share This Page