Orton a "No Show" at Minicamp Practice today **Contract Details Post #36**

[xwalker]

The restructure last year just converted some salary to bonus. It is relevant to cap space but not to how much he might owe the team.

The big issue here is that if he retires he has to pay back some SB.

If he is cut he does not have to pay it back.

So what I want someone to tell us definitively how much SB we could recover. Folks have said 3 mill but that makes no sense. He's played 2/3rds of his deal.

It is because of the 2 fake (voidable) years. He has about 1.12M of prorated money against each of 2014, 2015, and 2016 for a total of just over 3M.

 

[Vinnie2u]

At the end of the contract when the player is not worth it, there is generally a GAIN in cap space because the base salary exceeds whatever dead money we'd end up with. Plus that dead money eats up a smaller % of space 4 years down the line than it would if we just paid everyone a high base salary each year. People hear "dead money" and react negatively - but that is usually because they don't understand what it is.

And we go into every free agency

At the end of the contract when the player is not worth it, there is generally a GAIN in cap space because the base salary exceeds whatever dead money we'd end up with. Plus that dead money eats up a smaller % of space 4 years down the line than it would if we just paid everyone a high base salary each year. People hear "dead money" and react negatively - but that is usually because they don't understand what it is.

Yeah, it really is a terrible thing that we can't spend tons of UFA money on older guys.

True but isn't it smarter to spend money for in their prime players Smith and Dez instead of past performance guys like Ratliff , Ware, Austin and soon to be Carr and Romo

 

[guag]

Are we sure Orton is okay? It's really weird that the gm and coaches haven't even heard from him.

They've been in contact with his agent. They know what the deal is.

 

[xwalker]

And we go into every free agency period with negative cap space because we have so much dead money into players that are not on the team anymore.. Or are under performing their inflated contracts..

The overall cap picture is more complicated than what you're seeing.

They are able to operate with a virtual cap of greater than 100% of the actual cap with the way that they structure contracts.

You see the dead money numbers but you don't see how much more they are able to spend as compared to what they would be able to spend with your proposed method.

Most people believe that "the bill comes due" at some point, but it really does not happen if they only spend within a certain amount over the cap. If you push money into the future every year then the future never really arrives. It would be like only paying the interest on a loan but the principle never comes due.

Example:
Option 1. Pay as you go
They spend to the cap 130M.

Option 2. Similar to how they do it now.
130M on active player contracts
20M dead money
30M on money pushed into current year from previous years

That extra 50M can be pushed forward indefinitely. It will be reported that they have 20M in dead money; however in reality they can still spend the full 130M.

 

[BlindFaith]

The overall cap picture is more complicated than what you're seeing.

They are able to operate with a virtual cap of greater than 100% of the actual cap with the way that they structure contracts.

You see the dead money numbers but you don't see how much more they are able to spend as compared to what they would be able to spend with your proposed method.

Most people believe that "the bill comes due" at some point, but it really does not happen if they only spend within a certain amount over the cap. If you push money into the future every year then the future never really arrives. It would be like only paying the interest on a loan but the principle never comes due.

Example:
Option 1. Pay as you go
They spend to the cap 130M.

Option 2. Similar to how they do it now.
130M on active player contracts
20M dead money
30M on money pushed into current year from previous years

Yeah, except the Cowboys have really been the only team to use this tactic to the extreme that they have. And they stopped doing it this year.

But continue on.

 

[jday]

Keep him and fine him, and when a team needs a QB during training camp work out a trade. But cutting him is just giving him what he wants. After that game in Philly last year, he is prolly think he can still play for another team this year.

I honestly don't see how any team would find a guy behaving this way worth even a 7th rounder much less an actual player who could make the final 53.

 

[big dog cowboy]

They've been in contact with his agent. They know what the deal is.

The situation hasn't changed so there are no surprises. Orton is just being an ***.

 

[xwalker]

Yeah, except the Cowboys have really been the only team to use this tactic to the extreme that they have. And they stopped doing it this year.

But continue on.

It costs more in real dollars to do it.

I'm not saying if it is good or bad. I'm just trying to provide the information on how it works.

 

[BlindFaith]

It costs more in real dollars to do it.

I'm not saying if it is good or bad. I'm just trying to provide the information on how it works.

Hey, you can rob a bank to get more money, but I'm not going to say it's good or bad, just that it's an option.

 

[Craig]

Ive seen this compared to Ratliff a couple of times...maybe im buying a bs angle of a story, but wasnt he injured up to the start of the season and then he considered himself healthy but the team put him on the PUP which he was mad about? How do the two scenarios compare?

 

[xwalker]

Hey, you can rob a bank to get more money, but I'm not going to say it's good or bad, just that it's an option.

I don't see the relevance of this statement. Maybe if you could explain the details of stealing money with bitcoins then it would be a relevant comparison.

I'm providing information. If you don't like it don't read it.

 

[xwalker]

Ive seen this compared to Ratliff a couple of times...maybe im buying a bs angle of a story, but wasnt he injured up to the start of the season and then he considered himself healthy but the team put him on the PUP which he was mad about? How do the two scenarios compare?

The end result would be the same if Orton succeeds in getting them to cut him. It's about Orton and Ratliff keeping unearned bonus money.

 

[Sportsbabe]

Say hello to Brandon Weeden as your number 2, but we knew that already.

Hello Brandon .....

 

[Sportsbabe]

Pre tell Mickey ... I'm sure you'll let us all in on it once you find out.

 

[BlindFaith]

I don't see the relevance of this statement. Maybe if you could explain the details of stealing money with bitcoins then it would be a relevant comparison.

I'm providing information. If you don't like it don't read it.

The problem I have is that anytime someone states what a bad idea it is to restructure contracts with guaranteed money, especially for aging guys, you chime in with the whole - "well you can do it and save money on the cap" shpeel. Then your retort is, well, I'm not saying its a good idea or not. Kinda talking out both sides of your mouth in my opinion.

 

[AbeBeta]

It is because of the 2 fake (voidable) years. He has about 1.12M of prorated money against each of 2014, 2015, and 2016 for a total of just over 3M.

Sure -- but that makes zero common sense. Why on earth would a guy be penalized for doing something that the team wanted to do to create cap space. He could have simply said no to last year's conversion of salary to bonus. The advantage to Orton in taking the money up front (i.e., earning interest on the 1/4 of a mill or so he actually pocketed) far outweighs the penalty he would receive if retiring. Before that extension, we would have owed 1.33 mill. Now he owes 3.35 ish?

That just doesn't make any sense. I can see penalizing teams for using the fake option year approach but penalizing the player doesn't seem correct. Are you sure that is the correct information? Or are you going off the article which could actually be wrong as many journalists don't understand the CBA very well? (I'm not saying you don't have the right info, just clarifying the source).

 

[AbeBeta]

True but isn't it smarter to spend money for in their prime players Smith and Dez instead of past performance guys like Ratliff , Ware, Austin and soon to be Carr and Romo

Sure. But that is a totally different issue than restructuring deals. When we sign Tyron and Dez they are going to have large chunks guaranteed in the 2nd and 3rd years of their deals. We'll restructure those.

 

[TheDude]

The problem I have is that anytime someone states what a bad idea it is to restructure contracts with guaranteed money, especially for aging guys, you chime in with the whole - "well you can do it and save money on the cap" shpeel. Then your retort is, well, I'm not saying its a good idea or not. Kinda talking out both sides of your mouth in my opinion.

Pushing out money in the cap Its not inherently bad. However, it is not a risk free scenario. The risk is usually a tail risk event, but it could happen. If for whatever reason Dallas wanted to get rid of Romo this year, that would be a cap hit that likely could be absorbed with other restructures. Its a form of call risk that the player doesn't perform to the level of the contract and gets worse if it is multiple players on second contracts, the increasing cap space isn't forever increasing at large rate, etc.

That aside, I think most other teams don't use it for 2 reasons

• It takes cash - some small market teams cannot afford to convert $10s of millions of salary (paid through the season as revenue comes in) to a signing bonus paid now. Being able to do so, should be a competitive advantage all other things being equal. Time value of money $1M today is worth more than 20 equal weekly payments of $500K.
• GM Accountability - If you cut someone with a large cap hit it highlights that the player isn't living up to the contract - even if it was a bargain in the first few years, Owners will ask about the evaluation and likely have to replace the player with another free agent. That free agent my require a large signing bonus - more cash. GMs likely tend to be conservative and pay as you go if possible to avoid having to explain that "Yes you paid $20M signing bonus last year and now the cap hit of $12M after the player is quantifiable that our assessment was incorrect.
  • The 2 owners that usually have consistently employed this strategy are Jerry Jones and Dan Snyder.

If you have a top notch QB, and one or more of a LT, DE, WR, CB - chances are you are going to be re-structuring. contracts can only be spread a certain number of years. If you get no results though - the ROI ends up being comparatively lower

 

[Nightman]

Sure -- but that makes zero common sense. Why on earth would a guy be penalized for doing something that the team wanted to do to create cap space. He could have simply said no to last year's conversion of salary to bonus. The advantage to Orton in taking the money up front (i.e., earning interest on the 1/4 of a mill or so he actually pocketed) far outweighs the penalty he would receive if retiring. Before that extension, we would have owed 1.33 mill. Now he owes 3.35 ish?

That just doesn't make any sense. I can see penalizing teams for using the fake option year approach but penalizing the player doesn't seem correct. Are you sure that is the correct information? Or are you going off the article which could actually be wrong as many journalists don't understand the CBA very well? (I'm not saying you don't have the right info, just clarifying the source).

The thing that isn't clear is when the voidable years were added. Originally it was a 3yr/10.5m deal, with a 5m signing bonus. Without the voidable years, his signing bonus would count for 1.66m for 3 years(2012,2013,2014). He would only "owe" for 2014, or 1.66m if he retired.

If the voidable years were there the whole time, his original signing bonus would count for 1m per year from 2012-2016 and he would owe the full 3m if he retired. But they wouldn't get it back until 2015 at the earliest and it would come in 3 yearly installments.

Either way the Cowboys shouldn't be too pressed about getting any of the signing bonus back. The signing bonus served as his salary the last 2 years and 7m for 2 years of a top backup QB is high, but not outrageous.

If he doesn't want to play at all, they should just cut him, save the 3.25m in salary and move on. If he just doesn't want to play for us, they should play hardball and fine him everything they can.

 

[AbeBeta]

The thing that isn't clear is when the voidable years were added. Originally it was a 3yr/10.5m deal, with a 5m signing bonus. Without the voidable years, his signing bonus would count for 1.66m for 3 years(2012,2013,2014). He would only "owe" for 2014, or 1.66m if he retired.

If the voidable years were there the whole time, his original signing bonus would count for 1m per year from 2012-2016 and he would owe the full 3m if he retired. But they wouldn't get it back until 2015 at the earliest and it would come in 3 yearly installments.

Either way the Cowboys shouldn't be too pressed about getting any of the signing bonus back. The signing bonus served as his salary the last 2 years and 7m for 2 years of a top backup QB is high, but not outrageous.

If he doesn't want to play at all, they should just cut him, save the 3.25m in salary and move on. If he just doesn't want to play for us, they should play hardball and fine him everything they can.

The voidable years were added to spread the money we converted from salary to bonus over 4 years rather than the 2 left on his deal. This is pretty common practice around the league.