Calling CrazyCanuck - Landry Cap Question

We need a batsignal for CrazyCanuck.

It's rare when I'm baffled by a cap issue, but when I am, I throw up a distress call to CrazyCanuck.

CC, in the Predict Landry's Contract thread, I started off by saying Landry would get $17.5 million in guarantees and $39.5 million in total contract value. But then I started thinking about the rookie pool, and figured there was no way he could get $17.5 million in guarantees. The Skins' rookie pool allotment was $3.4 million this year. After signing our 4 lower draft picks, we had about $2.1 million remaining in the rookie pool to sign Landry.

Now, today ESPN is reporting that Landry got a 5 year contract with $17.5 million in guarantees. I can't understand how that fits under the $2.1 million rookie pool. I always thought that all of your guaranteed money got distributed evenly over the length of your contract. So $17.5 million divided by 5 years comes to $3.5 million per season. If that's the case, his cap number this year would be well over the rookie pool.

So, logic tells me that one of my premises or assumptions is wrong. Maybe it's just the signing bonus itself that gets spread over the life of the contract? Maybe some of that $17.5 million is a signing bonus, say something like $10 million, and the other $7.5 million is another type of guaranteed money? Maybe that $7.5 million is guaranteed to be paid to him next season, and it will allocate over the remaining 4 years of the contract?

So my question is, how is guaranteed, non-signing bonus money allocated to the cap?

Does some of it come from out of the NON-rookie pool maybe? :confused:

Guarantees can (and frequently) include roster bonuses that aren't paid until the second year. They might include a $10 million bonus to be paid in 2008, that has a $10 million buyout for not paying it. Ergo (and forthwith), that bonus hasn't been paid, and doesn't affect the 2007 cap.

Numbers are fun if they don't really mean anything...

Maybe it has to do with the way the bonuses are distributed? Some of it is probably roster bonuses that kick in down the line.

Maybe it has to do with the way the bonuses are distributed? Some of it is probably roster bonuses that kick in down the line.

My thought is that it's a two-stage bonus. Meaning maybe (making up numbers here) $10 million now and $7.5 million next year.

Maybe that means the $10 million gets spread over the 5 year contract ($2.0 million per season) and the $7.5 million gets spread over the final 4 years ($7.5 million divided by 4 years = $1.875 per year).

So it'd be:

2007 - $2.0 + base salary
2008 - $2.0 + $1.875 + base salary
2009 - $2.0 + $1.875 + base salary
2010 - $2.0 + $1.875 + base salary
2011 - $2.0 + $1.875 + base salary

Maybe?

I would say that you are right, Schneed. (Signing Bonus + Roster Bonus = Guaranteed Money)

I put together pertinent sections of the CBA that will help answer your question.

Article XVII Entering Player Pool
Article XXIV Guaranteed League-wide Salary, Salary Cap & minimum Team Salary

http://www.skinsfan.us/sf/Redskins/other/schneed_cba.zip

We need a batsignal for CrazyCanuck.

It's rare when I'm baffled by a cap issue, but when I am, I throw up a distress call to CrazyCanuck.

CC, in the Predict Landry's Contract thread, I started off by saying Landry would get $17.5 million in guarantees and $39.5 million in total contract value. But then I started thinking about the rookie pool, and figured there was no way he could get $17.5 million in guarantees. The Skins' rookie pool allotment was $3.4 million this year. After signing our 4 lower draft picks, we had about $2.1 million remaining in the rookie pool to sign Landry.

Now, today ESPN is reporting that Landry got a 5 year contract with $17.5 million in guarantees. I can't understand how that fits under the $2.1 million rookie pool. I always thought that all of your guaranteed money got distributed evenly over the length of your contract. So $17.5 million divided by 5 years comes to $3.5 million per season. If that's the case, his cap number this year would be well over the rookie pool.

So, logic tells me that one of my premises or assumptions is wrong. Maybe it's just the signing bonus itself that gets spread over the life of the contract? Maybe some of that $17.5 million is a signing bonus, say something like $10 million, and the other $7.5 million is another type of guaranteed money? Maybe that $7.5 million is guaranteed to be paid to him next season, and it will allocate over the remaining 4 years of the contract?

So my question is, how is guaranteed, non-signing bonus money allocated to the cap?$17 million may be the guarenteed number, but we know the signing bonus could not have been more than 8 million. The max money he got for this season was the 8 million SB (prorated over 5 years at 1.6 million per season) plus the league minimum salary (465,000), or roughly 2.1 million.

I'm guessing the remaining 9.5 million is a series of guarenteed roster bonuses. Not sure exactly how else they could do it.

$17 million may be the guarenteed number, but we know the signing bonus could not have been more than 8 million. The max money he got for this season was the 8 million SB (prorated over 5 years at 1.6 million per season) plus the league minimum salary (465,000), or roughly 2.1 million.

I'm guessing the remaining 9.5 million is a series of guarenteed roster bonuses. Not sure exactly how else they could do it.

Yeah that's exactly my thinking too. I guess future bonuses don't start getting allocated until the year they're paid.

So Schneed, How much after the Landry signing, How much cap does that leave the Redskins with?

The way this works now is that it gets spread out with roster bonuses as several have said. What is particularly interesting is the way these roster bonuses work. By definition they cannot be guaranteed since they require the player to be on the roster on a certain date. Usually March 1 but not always. So what teams and agents came up with was the "non-exercise clause" which says if a roster bonus is not exercised then a one-time payment equal to the roster bonus is paid. This in effect guarantees the roster bonus/es.

2007 - $2.0 + base salary
2008 - $2.0 + $1.875 + base salary
2009 - $2.0 + $1.875 + base salary
2010 - $2.0 + $1.875 + base salary
2011 - $2.0 + $1.875 + base salary

Probably close but the salaries are not right. I believe there are clauses in the CBA which may require the escalation of salaries througout the life of a contract. This is one of several reasons that restructuring helps since you can then restart the salary lower as it is technically a new contract. In your example he probably has, like Tripp said, a 8mil SB and then several 2-4mil RBs. He probably has at least one season with no RB since the Skins generally have not explicitly laid all the guarneteed money out over every year of a contract before. I don't know why they do that but it probably has something to do with their projected teams salaries compared to the projected cap down the line. IE: if they know they already have a bunch of money tied up in 2009 then they might try to not have a RB for that year in his contract.