How Stephen Jones can hide ~ $100 million of profits

[waldoputty]

he wants to eat his cake and have it to.
he wants to be GM spend less , and win too lol.

it is not jerry.
jerry wants to win more than $
it is stephen who says value but he really means profits

 

[Proof]

I hate the loser rationalizing that being burned by high priced free agents means only look at the scrap heap.

 

[waldoputty]

I hate the loser rationalizing that being burned by high priced free agents means only look at the scrap heap.

he is only rationalizing because he wants to protect the brand

it appears they are ducking the press because they know fans are not pleased.

keeping the salary cap # low is just cover

 

[Proof]

I'm mostly talking about fans who have Stockholm syndrome

 

[waldoputty]

I'm mostly talking about fans who have Stockholm syndrome

lol, i had to think about that for a minute

that is a really astute explanation for what is going on here.

 

[Richmond Cowboy]

I wonder how Jerry's #wardaddy factors into all this. Did Stephen veto daddy's daddy?

 

[waldoputty]

I wonder how Jerry's #wardaddy factors into all this. Did Stephen veto daddy's daddy?

it seems to me stephen has taken over.
he is just squeezing that extra 30m left per year roughly.
the analysis is really only solid until end of 2020, as things will go into a different stage after 2020, with new tv contract etc.

if his priority is the superbowl, there were other things they could have done.
even if it was 1 year contracts in the name of long term stability.
just look at the numerous higher end FAs on 1 year contracts.

 

[JoeKing]

it seems to me stephen has taken over.
he is just squeezing that extra 30m left per year roughly.
the analysis is really only solid until end of 2020, as things will go into a different stage after 2020, with new tv contract etc.

if his priority is the superbowl, there were other things they could have done.
even if it was 1 year contracts in the name of long term stability.
just look at the numerous higher end FAs on 1 year contracts.

I was concerned that after Jerry pass away, we will no longer have fans knocking on the owner/GM decisions but thanks to you, you have eased those concerns soooo much. Thank you.

 

[Hoofbite]

they dont need to do anything.

however it does not look good to have 50-90 million in cap space and not spending it.
it just happens that he is changing the restructuring practice that wipes out 50 million from the cap space number.

But they're spending money, and they aren't going to spend any less money by having more cap space. Restructure or not, spent money gets charged to the cap. So as long as the team remains in the Top 10 in terms of cash spending, they won't have any trouble finding a way to use their cap space. The only thing that will change is the team will be taking greater cap charges towards the front of the contract rather than later in the contract.

 

[YosemiteSam]

Alternative fact at hand!

 

[waldoputty]

But they're spending money, and they aren't going to spend any less money by having more cap space. Restructure or not, spent money gets charged to the cap. So as long as the team remains in the Top 10 in terms of cash spending, they won't have any trouble finding a way to use their cap space. The only thing that will change is the team will be taking greater cap charges towards the front of the contract rather than later in the contract.

of course they are going to keep spending money.
stephen is just squeezing 10%-15% off the top.
that just means reduce restructuring of $20-$30 million to almost 0 for the top contracts.

the best comparison is social security.
you use future taxes to pay for current expenses.
as long as they are equal or better, you are fine.

so we have been living on credit for 20 years.
suddenly you go cold turkey.
what happens, you squeeze you budget the 1-2 years you go cold turkey.
after 13-3, it is just the wrong time to go cold turkey.
if they want to do it in a down year, at least i would not complain.

by the time this plays out in 2019/2020, there is a new tv contract and a new reality.
nobody can predict what the numbers will be etc. at this point.
that is true probably even for somebody on the competition committee and is involved tv contract negotiations.

 

[Idgit]

This place is surreal sometimes.

 

[BrAinPaiNt]

Why are we losing our own players and not replacing them with better or at least similar level free agents?
The team claims poverty and good financial planning.
The free agent market is overpriced...

The team is stressing value, but what they mean is profits.
They say long term, but what they mean is hiding profits long term.
Of course, fans would be angry if they see $100 million of cap unused.
How are they going to hide that from the fans?
It is quite simple - in the name of long term stability.

The team has been restructuring about 20-30 million dollars per year.
By systematically turning off the restructuring, you can hide about 50 million profits from the fans.
In fact, they can make their cap space look tight with this mirage in 2018,
in 2019, the savings are so huge (67million) that 32 million still shows.
in 2020, the savings are even large (92 million) that 47 million still shows.
how to hide that, they can change the standard contracting structure - essentially front loading contracts.
the drop in profits in 2021 is from the massive contracts given to resigning the class of 2016 - takes an extra year or 2 for massive cap hit to show up. actually after 2020, the model is not even relevant as there will be a new TV contract.

With the traditional 20 million of restructuring:
2017----- 2018----- 2019----- 2020----- 2021
$ 3.20---$ 28.66---$ 67.91--$ 92.72---$ 72.23

To hide the profits from the fans, with 20 million of restructuring turned off:
2017----- 2018----- 2019----- 2020----- 2021
$ 3.20---$ 8.66-----$ 32.91---$ 47.72--$ 22.23

These calculations have assumed:
1. continue to sign 3 free agents per year - 1 at 2m aav, 1 at 3m aav, 1 at 4m aav
2. resigning own free agents - martin, collins, jones and most of the class of 2016 as good starters or stars, resigning class of 2017 as decent starters (assuming draft results are not as good)

For those who want to question the financial model, I would be happy to email the model to you.
A more detailed report of the model will be posted on BTB.

Waldo Putty posting threads about the cap and the zoners are Joe Dirt stuck in the well.

 

[Hoofbite]

of course they are going to keep spending money.
stephen is just squeezing 10%-15% off the top.
that just means reduce restructuring of $20-$30 million to almost 0 for the top contracts.

the best comparison is social security.
you use future taxes to pay for current expenses.
as long as they are equal or better, you are fine.

so we have been living on credit for 20 years.
suddenly you go cold turkey.
what happens, you squeeze you budget the 1-2 years you go cold turkey.
after 13-3, it is just the wrong time to go cold turkey.
if they want to do it in a down year, at least i would not complain.

by the time this plays out in 2019/2020, there is a new tv contract and a new reality.
nobody can predict what the numbers will be etc. at this point.
that is true probably even for somebody on the competition committee and is involved tv contract negotiations.

Cap spending is not the same as cash spending. Team can allocate cap charges in whatever manner they see fit given that a player agrees to the structure. Dallas has more than enough cash so even in a situation where they need to keep cap charges low for 1 or 2 years they can just structure the contracts to have low cap figures for 1 or 2 years. It's tough to do because players know that anything beyond year 2 is rarely a lock.

Teams routinely spend more cash in a single year than the salary cap total for that year.

 

[waldoputty]

Cap spending is not the same as cash spending. Team can allocate cap charges in whatever manner they see fit given that a player agrees to the structure. Dallas has more than enough cash so even in a situation where they need to keep cap charges low for 1 or 2 years they can just structure the contracts to have low cap figures for 1 or 2 years. It's tough to do because players know that anything beyond year 2 is rarely a lock.

Teams routinely spend more cash in a single year than the salary cap total for that year.

that is absolutely true.
but how does that invalidate my point?
stephen is manipulating the cap structure of the team's salaries - effectively hiding profits.
he keeps spending this way, he would have to hide 50-100 million of savings.
the method i pointed out can hide about 50 million.
at which point there would be so much $ that the contracts themselves would to be frontloaded or similar to hide the remainder.

 

[Hoofbite]

that is absolutely true.
but how does that invalidate my point?
stephen is manipulating the cap structure of the team's salaries - effectively hiding profits.
he keeps spending this way, he would have to hide 50-100 million of savings.
the method i pointed out can hide about 50 million.
at which point there would be so much $ that the contracts themselves would to be frontloaded or similar to hide the remainder.

He is not hiding anything because - for the 3rd time - cash spending is not the same as cap spending. Don't look at the salary cap as a true reflection of the amount of cash a team spends. The moment you do that, you're already going down the wrong path.

You can't even begin to measure a team's profits based on their cap total. Dallas is the most profitable team yet is always at the bottom of the league in terms of cap space. Plenty of teams are near the bottom in terms of profits yet near the top in terms of cap space. The league is spread across a variety of combinations. You're creating a relationship between two things that doesn't naturally exist. Here's a question:

Dallas restructures Player A's base salary of $16M down to $1M. This reduces the players cap figure by $12M. What has it done to the team's cash spending?

 

[waldoputty]

He is not hiding anything because - for the 3rd time - cash spending is not the same as cap spending. Don't look at the salary cap as a true reflection of the amount of cash a team spends. The moment you do that, you're already going down the wrong path.

You can't even begin to measure a team's profits based on their cap total. Dallas is the most profitable team yet is always at the bottom of the league in terms of cap space. Plenty of teams are near the bottom in terms of profits yet near the top in terms of cap space. The league is spread across a variety of combinations. You're creating a relationship between two things that doesn't naturally exist. Here's a question:

Dallas restructures Player A's base salary of $16M down to $1M. This reduces the players cap figure by $12M. What has it done to the team's cash spending?

dallas is super profitable. i believe 300M out of 700M revenues.
cash spending is fine, but if it is for bonus, it flows to the future.
you are reducing future spending.

it is like social security in a way.
everything is fine so long as future generations keep paying for present generations.
that is how the original generation received their benefits even though they did not pay much into the system.
if the future flow is messed with, there is pain - which we are seeing now.
only it was not necessary in our case.
furthermore, it is ridiculous to time the pain after 13-3.

 

[Hoofbite]

dallas is super profitable. i believe 300M out of 700M revenues.
cash spending is fine, but if it is for bonus, it flows to the future.
you are reducing future spending.

it is like social security in a way.
everything is fine so long as future generations keep paying for present generations.
that is how the original generation received their benefits even though they did not pay much into the system.
if the future flow is messed with, there is pain - which we are seeing now.
only it was not necessary in our case.
furthermore, it is ridiculous to time the pain after 13-3.

Yeah, yeah, yeah. Answer the question.

Dallas restructures Player A's base salary of $16M down to $1M. This reduces the players cap figure by $12M. What has it done to the team's cash spending?

 

[waldoputty]

Yeah, yeah, yeah. Answer the question.

Dallas restructures Player A's base salary of $16M down to $1M. This reduces the players cap figure by $12M. What has it done to the team's cash spending?

i answered the question.
cash spending is 16
cap spending is 1M + 15/# of years
what you are forgetting is that you have reduced future spending while keeping the future cap # high.
that reduces future cash spending

 

[Hoofbite]

i answered the question.
cash spending is 16
cap spending is 1M + 15/# of years
what you are forgetting is that you have reduced future spending while keeping the future cap # high.
that reduces future cash spending

Given that teams can structure contracts how they please, it reduces future cash spending only to the extent that the team chooses. Any contract with a signing bonus will a have more cash spending than it does cap charges for the first year.