DMN Blog: Igor Olshansky's contract figures

[WoodysGirl]

2:19 PM Tue, Mar 10, 2009 | Permalink | Yahoo! Buzz
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Igor Olshansky actually signed a five-year deal that voids to four, according to NFL Players Association figures.

Olshansky, who should replace Chris Canty in the starting lineup at right defensive end, received a $6 million option bonus. He is scheduled to earn base salaries of $1.7 million in 2009 followed by bases of $2.465 million, $3.35 million, $4.2 million and $4.3 million in the voidable year of 2013.

He also has $100,000 workout bonuses from 2009-11.

What's interesting is how the Cowboys are using the option bonus mechanism on their deals to Keith Brooking, Jon Kitna and Olshansky. Unlike signing bonuses, option bonuses count toward the 30 percent rule. The downside? If the player runs afoul of the law or does something detrimental to the team, the team cannot recoup any of that money.

Brooking, Kitna and Olshansky, however, are not character risks.



Comments (12) Leave comment | E-mail entry

 

[Chocolate Lab]

Adam was right about the five voiding to four.

And six million bonus? Even better than the eight that was reported.

What a steal. Great job, Jerry and Wade.

 

[AdamJT13]

And six million bonus? Even better than the eight that was reported.

It was reported as $8 million in guarantees, which is what he got. Along with the $6 million option bonus, his $1.7 million base salary this season is guaranteed, as is $300,000 of his base salary next season. (And if we didn't exercise the option, his base salary this season would be $7.7 million, all guaranteed.)

 

[Chocolate Lab]

Oh, okay. Didn't know that was guaranteed. (Not that he wouldn't play this year.)

 

[zeke69]

So for us dummies, is his cap hit 2.9 for 2009?

 

[PAINFROMUKRAINE]

Adam,

How does the Option Bonus benefit us more than paying a Signing Bonus? Did Colombo get an Option Bonus as well? His contract is for 7 Years but it appears that the last 3 Years may be Voidable.

 

[AdamJT13]

So for us dummies, is his cap hit 2.9 for 2009?

Yes, it is. I posted his cap numbers in the cap thread --

2009 $2,900,000
2010 $3,765,000
2011 $4,635,000
2012 $5,500,000
2013 $5,700,000 (voidable season)


We're now $12,246,277 under the cap, pending Sensabaugh's contract.

 

[AbeBeta]

Adam -- what is the advantage of using an option bonus rather than a true SB?

 

[YosemiteSam]

It was reported as $8 million in guarantees, which is what he got. Along with the $6 million option bonus, his $1.7 million base salary this season is guaranteed, as is $300,000 of his base salary next season. (And if we didn't exercise the option, his base salary this season would be $7.7 million, all guaranteed.)

Hmm. A bit confusing. What exactly is an "option bonus"?

I'm not to hot on possibility of guaranteeing $7.7M to this guy this season.

 

[the kid 05]

where the heck can i get a work out bonus?

 

[AdamJT13]

How does the Option Bonus benefit us more than paying a Signing Bonus?

Because option bonus prorations count in calculations for the 30 percent rule.

Let's take Olshanky's contract, for example. We gave him $22.5 million over five years, with $6 million basically up front (depending on exactly when the option is exercised, but let's assume it's immediately, so he'd get the money at the same time he would get a signing bonus, or very soon thereafter). His first-year cap number includes $1.7 million in salary and a $1.2 million option bonus proration, for a total of $2.9 million. All of that counts in calculations for the 30 percent rule. Thirty percent of $2.9 million is $870,000, so for the rest of his contract, the increase from year-to-year in everything that is included in the 30 percent rule calculations can't be more than $870,000. Here's how his contract breaks down --

2009 $2,900,000
2010 $3,765,000 = $865,000 increase from 2009
2011 $4,635,000 = $870,000 increase from 2010
2012 $5,500,000 = $865,000 increase from 2011
2013 $5,700,000 (voidable season) = $200,000 increase from 2012

Since the option bonus proration ($1.2 million per season) counts in the calculations for the 30 percent rule, Olshansky's contract complies with the rule -- it doesn't increase by more than $870,000 from year to year.

On the other hand, signing bonus prorations are NOT included in the calculations for the 30 percent rule. His other 2009 compensation is just $1.7 million in base salary. Thirty percent of that is $510,000, so that would be the maximum increase in the applicable compensation. However, this is what his contract looks like right now, not including the bonus prorations --

2009 $1,700,000
2010 $2,565,000 = $865,000 increase from 2009
2011 $3,435,000 = $870,000 increase from 2010
2012 $4,300,000 = $865,000 increase from 2011
2013 $4,500,000 (voidable season) = $200,000 increase from 2012

His contract would not be approved by the commissioner's office if it was structured this way because it would violate the 30 percent rule (three seasons exceeded the maximum increase).

If we had given Olshansky a signing bonus instead of an option bonus, in order to give him the same total compensation ($12 million in salary and workout bonuses) during the first four seasons (the fifth season voids anyway), we'd have to pay more this season in order to make the year-to-year increases smaller. Here's how we'd have to structure that money to have the cap hit as small as possible this season and still comply with the 30 percent rule --

2009 $2,068,967
2010 $2,689,655
2011 $3,310,344
2012 $3,931,034


Here's how much more cap room it would cost us to make his bonus a signing bonus instead of an option bonus, then structure his contract to give him the same total amount over the first four years (if there isn't a cap after this season, the other years wouldn't matter, but I'll list them anyway) --

2009 $368,967 more
2010 $124,655 more
2011 $124,656 less
2012 $368,967 less

So basically, we make it an option bonus in order to save a little bit of cap room now instead of a little bit later (when there might not even be a salary cap).

Did Colombo get an Option Bonus as well? His contract is for 7 Years but it appears that the last 3 Years may be Voidable.

Yes, he did.

 

[FloridaRob]

I don't know if this had been addressed but apparently there were some character concerns with Igor. When he learned the Chargers were not interested in re-signing him last year, he apparently shut down his play so that he would not get hurt. This apparently irked the front office of the Chargers as well as his teamates.

I know there was an article in one of the Green Bay Newspapers last week about this and one of the possible reasons Ted Thompson was not interested. (Of course the rest of the fans know the reason TT was not interested was $$$) I will see if I can find the article and post it here. Maybe it already has been tho.

 

[ThreeSportStar80]

It was reported as $8 million in guarantees, which is what he got. Along with the $6 million option bonus, his $1.7 million base salary this season is guaranteed, as is $300,000 of his base salary next season. (And if we didn't exercise the option, his base salary this season would be $7.7 million, all guaranteed.)

I'm proud to have you as the salary cap expert cuz' it's a ***** trying to figure it all out...:laugh2:

 

[FloridaRob]

Here is a snipped from a Milwaukee Journal Sentinel Blog by Greg Bedard on March 6. (Could be sour grapes, who knows?)


....But according to people around the league, it's what appeared to happen to Olshansky last year that has likely turned off the Packers and other teams once they did a little digging.

Two league sources, including one with the Chargers, said that once it became apparent to Olshansky that he wouldn't be getting a lucrative contract extension from San Diego, it appeared as if he shut down to preserve his health and, as a result, was nearly invisible the second half of last season. It got so bad that he was benched for four of the Chargers' final eight games after he had started the previous 54 in which he had appeared.

Olshansky's poor effort down the stretch not only infuriated the coaches and front office, but also some of his teammates. They had known him to be absurdly arrogant -- to the point that some players thought he was a joke -- but when you don't start pulling your weight, players don't have much tolerance for that....

 

[FLCowboyFan]

Adam.........you are one of the rocks that make this board truly informative. I get a better picture of our team from you than ANYONE in the media

Great Job!!!!!!

 

[PAINFROMUKRAINE]

Adam,
Thank you the explanation.

 

[AbeBeta]

It got so bad that he was benched for four of the Chargers' final eight games after he had started the previous 54 in which he had appeared.

This part isn't correct -- The Chargers started several games in a Nickel set that used only 2 DLs. Igor didn't play in that set - it was usually Castillo and Williams as the lone DL in that set. Although even Williams "missed" a start in that set.

Certainly if he had been benched during the 2nd half, you would expect his backup, Bingham, would have racked up more than 6 total tackles over those 8 games.

 

[28 Joker]

Jerry got something cheap, deep. This guy is a good player. He can help the Cowboys. Good move.

Marcus Spears hasn't been a two down player, either. Perhaps, the Cowboys will be able to keep him.