Hardy contract impact on 2016 cap

[BlindFaith]

So we are all stoked about the $3,217,850 dollar cap hit we take on for Hardy this year. But what about next year?

Well next year his dead money that carries over from 2015 could be something like this - assuming he gets a 4 game suspension and manages 10 sacks:
Per game bonuses - $5,781,250
10 sack bonus - $1,000,000
Total $6,781,250 in dead money for 2016.

The max dead money we would be facing would be - $9,898,150

This is how we managed to sign Hardy without restructuring Romo. We borrowed from next year again. Not saying it wasn't the right thing to do, but he will be hitting us for a big chunk of dead money next year.

 

[RxMan]

I'm no cap expert but this is completely incorrect.

 

[Hostile]

1 year deal. How is next year even impacted?

 

[BlindFaith]

1 year deal. How is next year even impacted?

Not likely to be earned incentives. Where do you think the other 10mill of his contract is?

 

[The Quest for Six]

He only signed a one year incentive deal....there is no cap impact next year

 

[BlindFaith]

I'm no cap expert but this is completely incorrect.

Pretty sure this is how it works out.

 

[BlindFaith]

He only signed a one year incentive deal....there is no cap impact next year

When do you think the incentives get paid out? He is also getting his week to week game pay as an incentive. Only the first two games are likely to be earned. When do you think the rest gets paid out? Next year.

 

[jlust22]

Those per game roster bonuses are going to go on the 2015 cap, not 2016. The Cowboys will need to have the cap room to accommodate those weekly roster bonuses before the season starts because otherwise, they will need to clear $600,000 every week. They haven't redone Romo's deal yet but I'm pretty sure it's happening.

 

[Toruk_Makto]

When do you think the incentives get paid out? He is also getting his week to week game pay as an incentive. Only the first two games are likely to be earned. When do you think the rest gets paid out? Next year.

They will have to make the space as they go THIS year.... Likely by eating at Romo's base salary.

 

[BlindFaith]

The only other way is that the cap hit keeps going up this year as he plays more games. In which case the Cowboys would have to keep an additional 6mill on the books to pay it out.

 

[Hoofbite]

Space will become available when Dez gets a long term deal.

 

[Sydla]

Not likely to be earned incentives. Where do you think the other 10mill of his contract is?

I believe it's all in this year.

By Week 3, Dallas will have to account for $8MM in cap space for Hardy. Each week, starting in Week 3, they have to add over $500K to their cap number. If he gets suspended or injured, Dallas gets a cap credit.

If Hardy plays this year, Dallas will have to account for his 2015 salary in this year. That means signing Dez to an extension and creating cap space, restructuring Romo, cutting Carr, etc.

 

[BlindFaith]

They will have to make the space as they go THIS year.... Likely by eating at Romo's base salary.

On the other hand, if you had a clause in Payton's contract that gave him a $1M bonus for personally rushing for 10 or more TDs, this would be considered "Not likely to be earned," as Payton simply doesn't take off with the ball much. He rushes for perhaps a couple TDs a year. This money does not count against this year's cap. If you wind up paying this money, it counts against next year's cap. Whether a bonus is likely to be earned or not is decided by league lawyers, not by your team. However, there are rules and guidelines so that it's pretty easy to structure a payment such that it is or is not likely, depending on your need. Appendix 4 shows individual goals which are not likely to be earned.
http://football.calsci.com/SalaryCap2.html

I'm not sure I've ever seen a contract structured the way they did with Hardy. When does the Not Likely to be Earned designation get set? As of right now, who really knows how many games he'll play. It could all be Not Likely to be Earned.

 

[unionjack8]

the cap hit isnt shown in full right now on the cap because the roster/game bonus's are not set in stone. They wll need the cap room when the season starts to accomodate all 16 game bonus', or create space each week to accomodate them, I THINK

 

[Hostile]

Not likely to be earned incentives. Where do you think the other 10mill of his contract is?

Incentives. If he doesn't earn them, they aren't paid. If he does earn them they are, on this year's deal.

 

[BlindFaith]

Incentives. If he doesn't earn them, they aren't paid. If he does earn them they are, on this year's deal.

How do incentives affect the Salary Cap?

Incentives are written into some contracts to pay a player for reaching certain performance criteria. Incentives come in two varieties – Likely To Be Earned (LTBE) and Not Likely To Be Earned (NLTBE) – each of which has different Salary Cap implications.

Likely To Be Earned Incentives (LTBE) are incentives based on performance levels that were reached in the prior season. LTBEs count against the Salary Cap in the year they are scheduled.

For example, if a RB ran for 1,200 yards last year and he has an incentive that will pay him $100,000 if he runs for 1,000 yards this year, the incentive would be a LTBE Incentive and would count against the Salary Cap this year.

On the other hand, if the RB ran for 1,000 yards last year and he has an incentive that will pay him $100,000 if he runs for 1,200 yards this year, then incentive would be Not Likely To Be Earned (NLTBE) and would not count against this year’s Salary Cap.

If the player does not earn a LTBE Incentive, then the amount of the incentive ($100K in our example) will be credited against the following year’s Salary Cap and the team would have $100K in additional Cap space in the following year.

The opposite happens with NLTBE Incentives. If those are earned, they are charged to the following year’s Salary Cap. In our example, that would mean that the team would have $100K less in Cap space the following year.


How can anything be LTBE for Hardy if he only played 1 game last year?

 

[Hoofbite]

Interesting aspect with the likely and not likely.

 

[BlindFaith]

Found it

"All told I am calculating his cap charge at just $3,217,850 (It will be about $2.6 million if I am incorrect about his exempt date), which fits him easily under the cap…for now. Yes there is a catch to this contract that we need to consider. When we deal with per game roster bonuses that do not count against the salary cap in the offseason, we have to be prepared for taking those charges on in the regular season.

For each week Hardy is active beyond the two week expectation his cap charge will grow by $578,125. If he plays all 16 games that means he will eventually count for the full $11.311 million against the cap in 2015. Obviously Dallas does not have the room to deal with that at the moment.

I would imagine that this puts Brandon Carr on the chopping block for a June 1 cut designation (or simply to be cut in the summer). Releasing Carr after June 1 creates $8 million in cap room, which would offset this potential charge for Hardy. While I would not expect Dallas to do anythin until the Hardy situation with the league is resolved, they should have all the leverage to approach Carr now about a pay cut if he wants to remain in Dallas. Another option is restructuring Tony Romo’s contract during the season as the need arises for more money."
http://overthecap.com/looking-at-the-greg-hardy-contract-with-the-cowboys/


I'm still curious about the NLTBE incentive. Since he only played 1 or 2 games last year, could it not be possible for the Cowboys to treat all but 2 games, as NLTBE and push that cap hit to next year?

Could there be a loophole for players that were suspended the previous year?

 

[xwalker]

So we are all stoked about the $3,217,850 dollar cap hit we take on for Hardy this year. But what about next year?

Well next year his dead money that carries over from 2015 could be something like this - assuming he gets a 4 game suspension and manages 10 sacks:
Per game bonuses - $5,781,250
10 sack bonus - $1,000,000
Total $6,781,250 in dead money for 2016.

The max dead money we would be facing would be - $9,898,150

This is how we managed to sign Hardy without restructuring Romo. We borrowed from next year again. Not saying it wasn't the right thing to do, but he will be hitting us for a big chunk of dead money next year.

That is completely wrong. The per game pay will be charged to 2015. Only about 1.8M of incentives will go on the 2016 cap.
It does not really matter which year, it's all about the total amount. Any team with cap flexibility is concerned about the total multi-year cap impact. The specific year issues can be manipulated as needed.

 

[erod]

Any unforeseen cap impact will be assumed this season with remaining cap space, and if needed, restructurings as they go.

There will be no impact next year.