Understanding the NFL Salary Cap (1 Viewer)

[Max Power]

I have always been under the impression that all 32 NFL teams had roughly the same Cap number. I guess that isn't the case.

http://sportsillustrated.cnn.com/2008/writ...ures/index.html

The highest Cap goes to the Vikes at 135 M.... while the lowest is the Lions at 111 M

I wanted to copy the table from page 2 here, but I couldn't get the formatting to stay...

 

[WampusCat43]

"Teams with significant cap space late in a season can manipulate the following year's cap by writing likely-to-be-earned incentive bonuses into contracts that, in reality, have zero chance of being earned."



I think I understand the idea, but the sentence doesn't make a lot of sense. Would it have killed them to give an example?

 

[derek245583]

I have know about this trick for awhile now. I believe it was discussed about the Eagles on this site a long time ago. Here is my question:

Why dont teams just put this clause in all defensive players contracts? "50 or more sacks and you get a 20 million dollar bonus" The way I understand it is that if an incentive is not met you get that dollar amount added onto your next seasons salary cap. It seems like you would have an unspendable amount of money if you just put this in everyones contract.

What am I missing here?

ETA: I see my mistake. You have to have room under your cap to put the bonus in.

Well here is my next question. Why dont you just sign a roster full of minimum salary guys and leave yourself about 100 million in cap space. Offer one player a crazy incentive and a 100 million dollar bonus. Then the following season, you have a 200 something million dollar cap. You can then go and get all the best players available in one season. Leave a little more room and it is an endless cycle.

 

[wdh76]

I have know about this trick for awhile now. I believe it was discussed about the Eagles on this site a long time ago. Here is my question:

Why dont teams just put this clause in all defensive players contracts? "50 or more sacks and you get a 20 million dollar bonus" The way I understand it is that if an incentive is not met you get that dollar amount added onto your next seasons salary cap. It seems like you would have an unspendable amount of money if you just put this in everyones contract.

What am I missing here?

Such incentives count against a team's cap the year they're written, but if they're not met -- and teams have ways of making sure they're not met -- the team is then credited the amount of the bonuses against the following year's cap.That maybe?

 

[Workhorse]

I have know about this trick for awhile now. I believe it was discussed about the Eagles on this site a long time ago. Here is my question:

Why dont teams just put this clause in all defensive players contracts? "50 or more sacks and you get a 20 million dollar bonus" The way I understand it is that if an incentive is not met you get that dollar amount added onto your next seasons salary cap. It seems like you would have an unspendable amount of money if you just put this in everyones contract.

What am I missing here?

Such incentives count against a team's cap the year they're written, but if they're not met -- and teams have ways of making sure they're not met -- the team is then credited the amount of the bonuses against the following year's cap.That maybe?

Exactly. It's an accounting loophole that allows teams to borrow cap room from one year to another.

 

[Max Power]

I have know about this trick for awhile now. I believe it was discussed about the Eagles on this site a long time ago. Here is my question:

Why dont teams just put this clause in all defensive players contracts? "50 or more sacks and you get a 20 million dollar bonus" The way I understand it is that if an incentive is not met you get that dollar amount added onto your next seasons salary cap. It seems like you would have an unspendable amount of money if you just put this in everyones contract.

What am I missing here?

Such incentives count against a team's cap the year they're written, but if they're not met -- and teams have ways of making sure they're not met -- the team is then credited the amount of the bonuses against the following year's cap.That maybe?

Exactly. It's an accounting loophole that allows teams to borrow cap room from one year to another.

Does the amount always remain on the cap? or is it only allowed to be used in the following season?

 

[Marvelous]

I have know about this trick for awhile now. I believe it was discussed about the Eagles on this site a long time ago. Here is my question:Why dont teams just put this clause in all defensive players contracts? "50 or more sacks and you get a 20 million dollar bonus" The way I understand it is that if an incentive is not met you get that dollar amount added onto your next seasons salary cap. It seems like you would have an unspendable amount of money if you just put this in everyones contract.What am I missing here?ETA: I see my mistake. You have to have room under your cap to put the bonus in. Well here is my next question. Why dont you just sign a roster full of minimum salary guys and leave yourself about 100 million in cap space. Offer one player a crazy incentive and a 100 million dollar bonus. Then the following season, you have a 200 something million dollar cap. You can then go and get all the best players available in one season. Leave a little more room and it is an endless cycle.

1. There is more to building a team than getting expensive free agents for one year. I doubt that approach will build a good team.2. This manuveur only gives you a 1-year bonus. So if you spend the full $200 M, you are back to the regular cap in following year.3. Teams like the Redskins in the past are always trying to get more cap money to spend in the current year. This trick moves money back into future years.

 

[Workhorse]

I have know about this trick for awhile now. I believe it was discussed about the Eagles on this site a long time ago. Here is my question:

Why dont teams just put this clause in all defensive players contracts? "50 or more sacks and you get a 20 million dollar bonus" The way I understand it is that if an incentive is not met you get that dollar amount added onto your next seasons salary cap. It seems like you would have an unspendable amount of money if you just put this in everyones contract.

What am I missing here?

Such incentives count against a team's cap the year they're written, but if they're not met -- and teams have ways of making sure they're not met -- the team is then credited the amount of the bonuses against the following year's cap.That maybe?

Exactly. It's an accounting loophole that allows teams to borrow cap room from one year to another.

Does the amount always remain on the cap? or is it only allowed to be used in the following season?

As far as I know, you can only use if for the following season.It's been going for years and the NFLPA can't stand it.

 

[ScottyFargo]

"Teams with significant cap space late in a season can manipulate the following year's cap by writing likely-to-be-earned incentive bonuses into contracts that, in reality, have zero chance of being earned." I think I understand the idea, but the sentence doesn't make a lot of sense. Would it have killed them to give an example?

Pat Williams signed an extension last season. It had a $13.2 million incentive for him playing 100% of snaps at quarterback (or something equally ridiculous). Because of the rules of the CBA, that $13.2 million counted against last years salary cap for the Vikings because it was considered Likely To Be Earned (LTBE). Obviously Pat didn't earn the incentive. That means the Vikings had $13.2 million counted against last years cap that was never actually paid. That means they get that money back through cap credits towards this years salary cap. So the Vikings will have gotten an additional $13.2 million in cap credits because of the Pat Williams contract. They also have a number of other cap credits through other unearned LTBE incentives. That is how you move money forward under the CBA.

I think the actual incentive they signed Pat for was special teams tackles (which he doesn't play any more often than he does QB) but this post from another message board is a good summary example.

 

[Billy Costigan Jr]

I have always been under the impression that all 32 NFL teams had roughly the same Cap number. I guess that isn't the case.

http://sportsillustrated.cnn.com/2008/writ...ures/index.html

The highest Cap goes to the Vikes at 135 M.... while the lowest is the Lions at 111 M

I wanted to copy the table from page 2 here, but I couldn't get the formatting to stay...

Nice find.HTH...I sorted the list by Adjusted Cap from highest to lowest instead of just alphabetically.

NFL	 Adjustments	 Adjusted Cap------------------------------------MIN	 $18,432,577	 $135,161,577PHI	 $14,087,449	 $130,816,449TBB	 $13,306,634	 $130,035,634BUF	 $12,713,009	 $129,442,009CLE	 $12,633,503	 $129,362,503JAX	 $11,920,898	 $128,649,898KCC	 $11,658,373	 $128,387,373GBP	 $ 9,430,581	 $126,159,581CAR	 $ 8,926,802	 $125,655,802NOS	 $ 8,017,003	 $124,746,003SEA	 $ 7,386,108	 $124,115,108IND	 $ 6,501,115	 $123,230,115TEN	 $ 5,491,147	 $122,220,147NYJ	 $ 5,052,789	 $121,781,789OAK	 $ 4,340,722	 $121,069,722MIA	 $ 3,944,997	 $120,673,997NEP	 $ 2,596,078	 $119,325,078BAL	 $ 2,532,265	 $119,261,265SFO	 $ 2,310,787	 $119,039,787WAS	 $ 1,821,260	 $118,550,260DAL	 $   998,443	 $117,727,443CHI	 $   726,231	 $117,455,231DEN	 $   660,000	 $117,389,000STL	 $   632,320	 $117,361,320ARZ	 $		 0	 $116,729,000CIN	 $		 0	 $116,729,000ATL	-$   350,574	 $116,378,426SDC	-$   597,647	 $116,131,353PIT	-$ 1,910,774	 $114,818,226HOU	-$ 2,207,869	 $114,521,131NYG	-$ 3,096,512	 $113,632,488DET	-$ 5,348,065	 $111,380,935

 

[AB in DC]

The two teams with zero adjustments are Arizona and Cincinnati. No surprise there.

 

[David Yudkin]

For those clamoring for an example of how to do this, a player could have in his contract that he would receive a $1 million bonus if he returned 50 punts. But that player might not even be a special teams player.

So the team would allocate $1 million in YEAR X tot he salary cap that would never be met and it would get carried over (ie credited) as unused cap space in YEAR Y.

 

[GregR_2]

"Teams with significant cap space late in a season can manipulate the following year's cap by writing likely-to-be-earned incentive bonuses into contracts that, in reality, have zero chance of being earned." I think I understand the idea, but the sentence doesn't make a lot of sense. Would it have killed them to give an example?

Why dont teams just put this clause in all defensive players contracts? "50 or more sacks and you get a 20 million dollar bonus" The way I understand it is that if an incentive is not met you get that dollar amount added onto your next seasons salary cap. It seems like you would have an unspendable amount of money if you just put this in everyones contract.What am I missing here?ETA: I see my mistake. You have to have room under your cap to put the bonus in.

One thing you're also missing here is that in addition to having to fit under that year's cap, it has to be considered Likely To Be Earned (LTBE). Only LTBE incentives are coutned against the current year's cap. Unlike To Be Earned (UTBE) incentives are not counted. What determines if an incentive is likely to be earned is the previous year's performance. Writing an incentive for 50 or more sacks would only be LTBE if the player had previously had around that number. I want to say that for things like sacks if the player was within 10% of it the previous year it is LTBE. Since he probably didn't have 45-46 sacks, that wouldn't work. However, I'm under the understanding that special teams incentives are always considered LTBE. So just take some player that will never play special teams for you and write him a bonus if he plays 50% of the special teams snaps and you can carry your money over.On the original article, the writer is kind of overboard in his statements like "The level playing field the NFL's salary cap supposedly created? It's a myth." This type of salary cap management has been widely reported on and well known for quite awhile, to where if a team isn't doing it their owner should probably be having a talk with his front office. Everyone is on a level playing field in that respect. It really isn't any different than how signing bonuses are a way teams can effectively use cap room from different years now. In the long run though teams had the same amount of cap room to work with over the same span of years.

 

[Workhorse]

"Teams with significant cap space late in a season can manipulate the following year's cap by writing likely-to-be-earned incentive bonuses into contracts that, in reality, have zero chance of being earned." I think I understand the idea, but the sentence doesn't make a lot of sense. Would it have killed them to give an example?

Why dont teams just put this clause in all defensive players contracts? "50 or more sacks and you get a 20 million dollar bonus" The way I understand it is that if an incentive is not met you get that dollar amount added onto your next seasons salary cap. It seems like you would have an unspendable amount of money if you just put this in everyones contract.What am I missing here?ETA: I see my mistake. You have to have room under your cap to put the bonus in.

One thing you're also missing here is that in addition to having to fit under that year's cap, it has to be considered Likely To Be Earned (LTBE). Only LTBE incentives are coutned against the current year's cap. Unlike To Be Earned (UTBE) incentives are not counted. What determines if an incentive is likely to be earned is the previous year's performance. Writing an incentive for 50 or more sacks would only be LTBE if the player had previously had around that number. I want to say that for things like sacks if the player was within 10% of it the previous year it is LTBE. Since he probably didn't have 45-46 sacks, that wouldn't work. However, I'm under the understanding that special teams incentives are always considered LTBE. So just take some player that will never play special teams for you and write him a bonus if he plays 50% of the special teams snaps and you can carry your money over.On the original article, the writer is kind of overboard in his statements like "The level playing field the NFL's salary cap supposedly created? It's a myth." This type of salary cap management has been widely reported on and well known for quite awhile, to where if a team isn't doing it their owner should probably be having a talk with his front office. Everyone is on a level playing field in that respect. It really isn't any different than how signing bonuses are a way teams can effectively use cap room from different years now. In the long run though teams had the same amount of cap room to work with over the same span of years.

This isn't really quite right, Greg.The CBA states that "Any new or altered incentive bonuses renegotiated in a pre-existing contract after the start of the regular season in which they may be earned automatically will be deamed "likely to be earned" during that season". So that means that if a team renegotiates a players deal during the season, you could throw any kind of clause in there as LTBE, no matter how UNlikely it is to actually be met.

 

[ScottyFargo]

"Teams with significant cap space late in a season can manipulate the following year's cap by writing likely-to-be-earned incentive bonuses into contracts that, in reality, have zero chance of being earned." I think I understand the idea, but the sentence doesn't make a lot of sense. Would it have killed them to give an example?

Why dont teams just put this clause in all defensive players contracts? "50 or more sacks and you get a 20 million dollar bonus" The way I understand it is that if an incentive is not met you get that dollar amount added onto your next seasons salary cap. It seems like you would have an unspendable amount of money if you just put this in everyones contract.What am I missing here?ETA: I see my mistake. You have to have room under your cap to put the bonus in.

One thing you're also missing here is that in addition to having to fit under that year's cap, it has to be considered Likely To Be Earned (LTBE). Only LTBE incentives are coutned against the current year's cap. Unlike To Be Earned (UTBE) incentives are not counted. What determines if an incentive is likely to be earned is the previous year's performance. Writing an incentive for 50 or more sacks would only be LTBE if the player had previously had around that number. I want to say that for things like sacks if the player was within 10% of it the previous year it is LTBE. Since he probably didn't have 45-46 sacks, that wouldn't work. However, I'm under the understanding that special teams incentives are always considered LTBE. So just take some player that will never play special teams for you and write him a bonus if he plays 50% of the special teams snaps and you can carry your money over.On the original article, the writer is kind of overboard in his statements like "The level playing field the NFL's salary cap supposedly created? It's a myth." This type of salary cap management has been widely reported on and well known for quite awhile, to where if a team isn't doing it their owner should probably be having a talk with his front office. Everyone is on a level playing field in that respect. It really isn't any different than how signing bonuses are a way teams can effectively use cap room from different years now. In the long run though teams had the same amount of cap room to work with over the same span of years.

This isn't really quite right, Greg.The CBA states that "Any new or altered incentive bonuses renegotiated in a pre-existing contract after the start of the regular season in which they may be earned automatically will be deamed "likely to be earned" during that season". So that means that if a team renegotiates a players deal during the season, you could throw any kind of clause in there as LTBE, no matter how UNlikely it is to actually be met.

Right. The teams that are doing this were going to be under the cap for their current year so they created these incentives to hold over that cap money to the next year.

 

[GregR_2]

"Teams with significant cap space late in a season can manipulate the following year's cap by writing likely-to-be-earned incentive bonuses into contracts that, in reality, have zero chance of being earned." I think I understand the idea, but the sentence doesn't make a lot of sense. Would it have killed them to give an example?

Why dont teams just put this clause in all defensive players contracts? "50 or more sacks and you get a 20 million dollar bonus" The way I understand it is that if an incentive is not met you get that dollar amount added onto your next seasons salary cap. It seems like you would have an unspendable amount of money if you just put this in everyones contract.What am I missing here?ETA: I see my mistake. You have to have room under your cap to put the bonus in.

One thing you're also missing here is that in addition to having to fit under that year's cap, it has to be considered Likely To Be Earned (LTBE). Only LTBE incentives are coutned against the current year's cap. Unlike To Be Earned (UTBE) incentives are not counted. What determines if an incentive is likely to be earned is the previous year's performance. Writing an incentive for 50 or more sacks would only be LTBE if the player had previously had around that number. I want to say that for things like sacks if the player was within 10% of it the previous year it is LTBE. Since he probably didn't have 45-46 sacks, that wouldn't work. However, I'm under the understanding that special teams incentives are always considered LTBE. So just take some player that will never play special teams for you and write him a bonus if he plays 50% of the special teams snaps and you can carry your money over.On the original article, the writer is kind of overboard in his statements like "The level playing field the NFL's salary cap supposedly created? It's a myth." This type of salary cap management has been widely reported on and well known for quite awhile, to where if a team isn't doing it their owner should probably be having a talk with his front office. Everyone is on a level playing field in that respect. It really isn't any different than how signing bonuses are a way teams can effectively use cap room from different years now. In the long run though teams had the same amount of cap room to work with over the same span of years.

This isn't really quite right, Greg.The CBA states that "Any new or altered incentive bonuses renegotiated in a pre-existing contract after the start of the regular season in which they may be earned automatically will be deamed "likely to be earned" during that season". So that means that if a team renegotiates a players deal during the season, you could throw any kind of clause in there as LTBE, no matter how UNlikely it is to actually be met.

Thank you, I wasn't aware of that being the rule for renegotiations.

 

[Workhorse]

"Teams with significant cap space late in a season can manipulate the following year's cap by writing likely-to-be-earned incentive bonuses into contracts that, in reality, have zero chance of being earned." I think I understand the idea, but the sentence doesn't make a lot of sense. Would it have killed them to give an example?

Why dont teams just put this clause in all defensive players contracts? "50 or more sacks and you get a 20 million dollar bonus" The way I understand it is that if an incentive is not met you get that dollar amount added onto your next seasons salary cap. It seems like you would have an unspendable amount of money if you just put this in everyones contract.What am I missing here?ETA: I see my mistake. You have to have room under your cap to put the bonus in.

One thing you're also missing here is that in addition to having to fit under that year's cap, it has to be considered Likely To Be Earned (LTBE). Only LTBE incentives are coutned against the current year's cap. Unlike To Be Earned (UTBE) incentives are not counted. What determines if an incentive is likely to be earned is the previous year's performance. Writing an incentive for 50 or more sacks would only be LTBE if the player had previously had around that number. I want to say that for things like sacks if the player was within 10% of it the previous year it is LTBE. Since he probably didn't have 45-46 sacks, that wouldn't work. However, I'm under the understanding that special teams incentives are always considered LTBE. So just take some player that will never play special teams for you and write him a bonus if he plays 50% of the special teams snaps and you can carry your money over.On the original article, the writer is kind of overboard in his statements like "The level playing field the NFL's salary cap supposedly created? It's a myth." This type of salary cap management has been widely reported on and well known for quite awhile, to where if a team isn't doing it their owner should probably be having a talk with his front office. Everyone is on a level playing field in that respect. It really isn't any different than how signing bonuses are a way teams can effectively use cap room from different years now. In the long run though teams had the same amount of cap room to work with over the same span of years.

This isn't really quite right, Greg.The CBA states that "Any new or altered incentive bonuses renegotiated in a pre-existing contract after the start of the regular season in which they may be earned automatically will be deamed "likely to be earned" during that season". So that means that if a team renegotiates a players deal during the season, you could throw any kind of clause in there as LTBE, no matter how UNlikely it is to actually be met.

Thank you, I wasn't aware of that being the rule for renegotiations.

No problem. It really makes no sense at all to have this in-year exception other than providing a loophole for teams to carryover unused cap dough.

 

[trollmonger]

I have know about this trick for awhile now. I believe it was discussed about the Eagles on this site a long time ago. Here is my question:

Why dont teams just put this clause in all defensive players contracts? "50 or more sacks and you get a 20 million dollar bonus" The way I understand it is that if an incentive is not met you get that dollar amount added onto your next seasons salary cap. It seems like you would have an unspendable amount of money if you just put this in everyones contract.

What am I missing here?

Such incentives count against a team's cap the year they're written, but if they're not met -- and teams have ways of making sure they're not met -- the team is then credited the amount of the bonuses against the following year's cap.That maybe?

Exactly. It's an accounting loophole that allows teams to borrow cap room from one year to another.

Does the amount always remain on the cap? or is it only allowed to be used in the following season?

As far as I know, you can only use if for the following season.It's been going for years and the NFLPA can't stand it.

Why?Assuming the NFLPA's objective is to earn as much money as possible for the players, it would seem to work in their favour. If a team isn't going to use it's cap space this year, that money is gone forever and stays in the owner's pocket. But if it is carried over to the following season, there's at least a chance that some player is going to get it.

 

[Workhorse]

I have know about this trick for awhile now. I believe it was discussed about the Eagles on this site a long time ago. Here is my question:

Why dont teams just put this clause in all defensive players contracts? "50 or more sacks and you get a 20 million dollar bonus" The way I understand it is that if an incentive is not met you get that dollar amount added onto your next seasons salary cap. It seems like you would have an unspendable amount of money if you just put this in everyones contract.

What am I missing here?

Such incentives count against a team's cap the year they're written, but if they're not met -- and teams have ways of making sure they're not met -- the team is then credited the amount of the bonuses against the following year's cap.That maybe?

Exactly. It's an accounting loophole that allows teams to borrow cap room from one year to another.

Does the amount always remain on the cap? or is it only allowed to be used in the following season?

As far as I know, you can only use if for the following season.It's been going for years and the NFLPA can't stand it.

Why?Assuming the NFLPA's objective is to earn as much money as possible for the players, it would seem to work in their favour. If a team isn't going to use it's cap space this year, that money is gone forever and stays in the owner's pocket. But if it is carried over to the following season, there's at least a chance that some player is going to get it.

I've never really understood their beef but the NFLPA has always felt that the LTBE loophole keeps money out of players hands in the short term.