dhockster said:
It's not 50 million of cap space the Texans would save but 30 million. Trading him now takes this years cap hit from about $15 million to $20 million (due to the Texans being on the hook for his signing bonus). So it costs the Texans $5 million this year, and then they save the $35 million next year for a net savings of $30 million
Actually my $50m should have been $45.5m, I had his salary wrong for one of the years.
But no, you aren't using the right equation to get at the total savings over all years of the cap for the different scenarios.
The cap collectively takes the signing bonus hit ($21.6m actually,) if he's traded this year, next year, is cut, or plays out his contract. The only difference is which years it hits in. So when we want the total change in cap hits between the two scenarios we can completely remove it from the equation. It hits equally in all, just the timing is different. The Texans total cap across the years is reduced this amount in all scenarios.
The only change in total cost depending on year of trade is the salary you pay him and it hits your cap, or you don't pay him and it doesn't. I'll leave the signing bonus in there for completeness, but it doesn't end up playing a role.
Trade now:
$21.6m (signing bonus escalated) hits the cap in 2021.
Trade after 2022:
$10.5m salary hits in 2021.
$35m salary hits in 2022
$5.4m (signing bonus) hit in 2021
$5.4m (signing bonus) hit in 2022
$10.8m (signing bonus escalated) hits in 2023
---------------
$67.1m cap hits total across 2021+2022+2023 ($21.6m bonus + $10.5m salary + 35m salary)
So the difference now or after 2022 = $67.1m - $21.6m = $45.5m. Which is exactly his two salaries we didn't pay, $10.5m in 2021 and $35m in 2022.
Why didn't your number work? $5m is the NET CHANGE in the 2021 cap if you trade him now. It is not his actual cap number. If you want to work with net changes then you have to use the actual net changes for the other years too. $35m is only
part of the net change in the 2022 cap. There is also the $5.4m that changed when you escalated it into 2021. And there are also $5.4m charges in each of 2023 and 2024 similarly changed. Those contribute too if you're going to work in net changes. Those 3 x $5.4m =16.2m of his signing bonus are the amount you're off by (or would be if we'd used the same exact numbers instead of rounding/approximate).
But easier to just skip the cap hit from the signing bonus since it hits eventually regardless of scenario.