Doomsday101
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(June 6, 2006) -- Anyone who follows the business of football can recall the reality of what June 1 traditionally brought to the NFL. Teams all around the league cut high-priced veterans on or after June 1 and took the salary cap hit for the player in the following year.
For example, if a team did not have enough salary cap space to sign all those rookies it drafted in April and it happened to have a veteran player who was no longer playing up to par with his contract, it was time to let him go. If that veteran was scheduled to make $5 million in salary, but he also had $5 million of his former signing bonus to pay off, the club waited until after June 1 to cut him. The club would receive a $5 million credit against the cap for the salary it was not going to pay and took a $5 million cap hit the next year for the signing bonus.
Today, it is completely different for a number of reasons:
1. Most teams have plenty of salary cap space because of the increase in the cap from the new collective bargaining agreement.
2. Most teams are going to have another big jump in salary cap space next year when the salary cap increases significantly once again.
3. Most teams dumped their overpriced veterans earlier in the year and took the cap penalties this year rather than next year.
4. Most salary cap managers have already been through the pains of the old ways of doing business and never plan on returning to the "credit card" method of running a team.
Because we are in a brand new business era, the way personnel are going to move from club to club is changing. The Patriots were famous for their post June 1 selections of salary cap victims. They would sit back, watch a high-priced veteran get axed, and then sell him on the idea of a real chance at a Super Bowl ring for a reasonable salary. But something happened earlier this offseason that taught the Patriots a valuable lesson. And like always, they changed business strategies in order to stay up with the changing times.
A few months ago when teams were dumping veterans, the Patriots made a run at wide receiver Peerless Price -- another former excellent player who no longer played up to his contracts -- with the same typical offer as always. The offer to Price was the veteran minimum to play for a playoff team with Tom Brady throwing the ball to him and a chance to reinvent his career. David Givens had just left for the Titans and the opportunity was staring Price in the face. Hard to turn down. But the Buffalo Bills also had salary cap space and presented a better offer on the table. Price became a Bill and not a Patriot.
The Patriots are a quick study under head coach Bill Belichick and vice president of player personnel Scott Pioli and now they have switched gears to another method of securing talent. The latest trade of receiver Bethel Johnson to the Saints for underachieving former first-round defensive tackle Johnathan Sullivan makes perfect sense. Sullivan was the sixth overall pick in the 2003 draft and he now joins his former college teammate Richard Seymour, who also was the sixth overall pick in the 2001 draft. If anyone can get the underachieving Sullivan to play the way a first-round DT should play, it will be Seymour, who is emerging as the leader of the Patriots defense now that Willie McGinest is playing for the Browns. Here's why the trade makes
sense this time of year in the cap environment we are in today:
Johnson was scheduled to make a salary of $478,000, which now becomes the Saints' responsibility if he makes the team. The Patriots get that salary cap space back, minus the signing bonus still left on the contract. Trades are considered the same as a termination before June 1, so the Patriots must absorb the remaining bonus now. Johnson only had $350,000 left to pay off in the cap, so in fact New England gained cap space by trading
Johnson. Subtract the $350,000 obligation from the $478,000 salary and the Patriots created $128,000 in cap space.
But here comes Sullivan and his salary of $689,000. The Patriots only need an extra $83,000 of space when they combine the space created by moving Johnson to fit Sullivan under the cap. And that's nothing considering teams are all managing salary caps at over $100 million. If Sullivan doesn't shape up and the Patriots cut him in August, they never paid him a penny and they would recoup the $689,000 of cap space. It looks like New England is back in business once again.
The Saints have a different set of circumstances. When they traded Sullivan, they got back the $689,000 in space, but Sullivan still has $2.585 million in bonus debt to pay off. So the net effect of moving Sullivan was a cap charge of $1.89 million plus the new salary for Johnson of $478,000 -- at total of $2.374 million.
This isn't really a bad thing for New Orleans on a couple of levels. The Saints plenty of salary cap space to absorb the trade ramification, which is the new trend around the league. The new coaching staff has no emotional attachment to Sullivan because they didn't draft him and he was already one of the reasons new coaches are in New Orleans. Sullivan started just 17 games in three years (none in 2005) and only generated 1.5 sacks and 77 tackles. Johnson wasn't any better with just seven starts in the same three-year period, catching just 30 balls and four touchdowns. His 39 kickoff returns with a 25.1 average and two touchdowns isn't bad, but the truth is these teams had the salary cap space to switch headaches.
As one general manage said the other day, "We could see a significant increase in trades around our league over the next two years." Time will tell who got the best of the Saints-Patriots trade. But for now, neither team has to look at its former draft pick that wasn't living up to expectations. And just maybe the change of scenery will do both players some good.
http://www.nfl.com/news/story/9482175
For example, if a team did not have enough salary cap space to sign all those rookies it drafted in April and it happened to have a veteran player who was no longer playing up to par with his contract, it was time to let him go. If that veteran was scheduled to make $5 million in salary, but he also had $5 million of his former signing bonus to pay off, the club waited until after June 1 to cut him. The club would receive a $5 million credit against the cap for the salary it was not going to pay and took a $5 million cap hit the next year for the signing bonus.
Today, it is completely different for a number of reasons:
1. Most teams have plenty of salary cap space because of the increase in the cap from the new collective bargaining agreement.
2. Most teams are going to have another big jump in salary cap space next year when the salary cap increases significantly once again.
3. Most teams dumped their overpriced veterans earlier in the year and took the cap penalties this year rather than next year.
4. Most salary cap managers have already been through the pains of the old ways of doing business and never plan on returning to the "credit card" method of running a team.
Because we are in a brand new business era, the way personnel are going to move from club to club is changing. The Patriots were famous for their post June 1 selections of salary cap victims. They would sit back, watch a high-priced veteran get axed, and then sell him on the idea of a real chance at a Super Bowl ring for a reasonable salary. But something happened earlier this offseason that taught the Patriots a valuable lesson. And like always, they changed business strategies in order to stay up with the changing times.
A few months ago when teams were dumping veterans, the Patriots made a run at wide receiver Peerless Price -- another former excellent player who no longer played up to his contracts -- with the same typical offer as always. The offer to Price was the veteran minimum to play for a playoff team with Tom Brady throwing the ball to him and a chance to reinvent his career. David Givens had just left for the Titans and the opportunity was staring Price in the face. Hard to turn down. But the Buffalo Bills also had salary cap space and presented a better offer on the table. Price became a Bill and not a Patriot.
The Patriots are a quick study under head coach Bill Belichick and vice president of player personnel Scott Pioli and now they have switched gears to another method of securing talent. The latest trade of receiver Bethel Johnson to the Saints for underachieving former first-round defensive tackle Johnathan Sullivan makes perfect sense. Sullivan was the sixth overall pick in the 2003 draft and he now joins his former college teammate Richard Seymour, who also was the sixth overall pick in the 2001 draft. If anyone can get the underachieving Sullivan to play the way a first-round DT should play, it will be Seymour, who is emerging as the leader of the Patriots defense now that Willie McGinest is playing for the Browns. Here's why the trade makes
sense this time of year in the cap environment we are in today:
Johnson was scheduled to make a salary of $478,000, which now becomes the Saints' responsibility if he makes the team. The Patriots get that salary cap space back, minus the signing bonus still left on the contract. Trades are considered the same as a termination before June 1, so the Patriots must absorb the remaining bonus now. Johnson only had $350,000 left to pay off in the cap, so in fact New England gained cap space by trading
Johnson. Subtract the $350,000 obligation from the $478,000 salary and the Patriots created $128,000 in cap space.
But here comes Sullivan and his salary of $689,000. The Patriots only need an extra $83,000 of space when they combine the space created by moving Johnson to fit Sullivan under the cap. And that's nothing considering teams are all managing salary caps at over $100 million. If Sullivan doesn't shape up and the Patriots cut him in August, they never paid him a penny and they would recoup the $689,000 of cap space. It looks like New England is back in business once again.
The Saints have a different set of circumstances. When they traded Sullivan, they got back the $689,000 in space, but Sullivan still has $2.585 million in bonus debt to pay off. So the net effect of moving Sullivan was a cap charge of $1.89 million plus the new salary for Johnson of $478,000 -- at total of $2.374 million.
This isn't really a bad thing for New Orleans on a couple of levels. The Saints plenty of salary cap space to absorb the trade ramification, which is the new trend around the league. The new coaching staff has no emotional attachment to Sullivan because they didn't draft him and he was already one of the reasons new coaches are in New Orleans. Sullivan started just 17 games in three years (none in 2005) and only generated 1.5 sacks and 77 tackles. Johnson wasn't any better with just seven starts in the same three-year period, catching just 30 balls and four touchdowns. His 39 kickoff returns with a 25.1 average and two touchdowns isn't bad, but the truth is these teams had the salary cap space to switch headaches.
As one general manage said the other day, "We could see a significant increase in trades around our league over the next two years." Time will tell who got the best of the Saints-Patriots trade. But for now, neither team has to look at its former draft pick that wasn't living up to expectations. And just maybe the change of scenery will do both players some good.
http://www.nfl.com/news/story/9482175
