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It always makes sense to kick the salary-cap can to future years
Posted by Mike Florio on February 21, 2023, 9:20 AM EST
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We’ll be writing and talking a lot in the coming days about teams re-doing deals in order to reduce cap charges in the 2023 league year, and to push cap costs into 2024.
Some teams, like the Saints and G.M. Mickey Loomis, have perfected the craft of kicking the cap can. And it’s not like an unexpectedly high utility bill. When teams sign contracts, they know how the money will hit the cap, with typically lower charges in the early years, increasing cap consequences in later years, and often a bill on the back end that will chew up cap space after the player is gone.
Every year, teams have to reconfigure contracts in order to comply with the cap. Again, it’s never a surprise. It’s part of managing the supposedly hard cap on spending that, as a practical matter, can be engineered through payments that get spread over multiple league years.
And while the dollars inevitably will hit the cap at some point, the fact that the cap keeps going up and up and up makes a cap dollar in 2023 have less of a relative impact in 2024, when the cap spikes again.
For example, a $1 million cap charge means less when the limit is $224.8 million (as it will be this year) than when the limit is $208.2 million (as it was last year). And it will mean even less next year.
The only problem is that these cap maneuverings often require cooperation from players. Plenty of contracts give teams the ability to convert salary (which isn’t spread over multiple years) to signing bonus (which is). And few players would refuse to take cash in hand now.
But then there are players like Tom Brady, whose expiring contract has a $35.1 million cap charge — and whose team would benefit from Brady agreeing to a one-year dummy deal that would allow more than $24 million to be bumped to 2024.
The Bucs reportedly plan to take their medicine this year, which sounds a lot better than saying, “We wanted to reduce the number, but Brady refused to play ball with us.”
Really, why would any team choose to take a full dead-cap charge in any current year, unless they’re looking for cover for cheapness?
Unlike the early days of the cap, when teams had to play contractual games with incentives to carry cap space from one year to the next, it all happens automatically. So if the Bucs would clear $24 million in cap space by re-doing Brady’s deal and ultimately not use it all in 2023, they’d be able to push the full amount of the excess to 2024.
So, basically, it’s easy to create cap space, and it always makes sense to do it. Whenever any team starts saying or leaking that it wants to take its cap medicine now, it’s fair to wonder whether the team simply doesn’t want to spend money now.
They’ll never admit that, of course. Because if teams aren’t spending as much money as they can on players, why should fans did deep for season-ticket renewals?
Remember that, folks, when you get your invoice — especially when it shows an increase over last year. If your local team isn’t doing everything it can to get the most out of the available cap dollars, why should you do everything you can to cough up hard-earned cash that isn’t being used to its fullest?
Posted by Mike Florio on February 21, 2023, 9:20 AM EST
Getty Images
We’ll be writing and talking a lot in the coming days about teams re-doing deals in order to reduce cap charges in the 2023 league year, and to push cap costs into 2024.
Some teams, like the Saints and G.M. Mickey Loomis, have perfected the craft of kicking the cap can. And it’s not like an unexpectedly high utility bill. When teams sign contracts, they know how the money will hit the cap, with typically lower charges in the early years, increasing cap consequences in later years, and often a bill on the back end that will chew up cap space after the player is gone.
Every year, teams have to reconfigure contracts in order to comply with the cap. Again, it’s never a surprise. It’s part of managing the supposedly hard cap on spending that, as a practical matter, can be engineered through payments that get spread over multiple league years.
And while the dollars inevitably will hit the cap at some point, the fact that the cap keeps going up and up and up makes a cap dollar in 2023 have less of a relative impact in 2024, when the cap spikes again.
For example, a $1 million cap charge means less when the limit is $224.8 million (as it will be this year) than when the limit is $208.2 million (as it was last year). And it will mean even less next year.
The only problem is that these cap maneuverings often require cooperation from players. Plenty of contracts give teams the ability to convert salary (which isn’t spread over multiple years) to signing bonus (which is). And few players would refuse to take cash in hand now.
But then there are players like Tom Brady, whose expiring contract has a $35.1 million cap charge — and whose team would benefit from Brady agreeing to a one-year dummy deal that would allow more than $24 million to be bumped to 2024.
The Bucs reportedly plan to take their medicine this year, which sounds a lot better than saying, “We wanted to reduce the number, but Brady refused to play ball with us.”
Really, why would any team choose to take a full dead-cap charge in any current year, unless they’re looking for cover for cheapness?
Unlike the early days of the cap, when teams had to play contractual games with incentives to carry cap space from one year to the next, it all happens automatically. So if the Bucs would clear $24 million in cap space by re-doing Brady’s deal and ultimately not use it all in 2023, they’d be able to push the full amount of the excess to 2024.
So, basically, it’s easy to create cap space, and it always makes sense to do it. Whenever any team starts saying or leaking that it wants to take its cap medicine now, it’s fair to wonder whether the team simply doesn’t want to spend money now.
They’ll never admit that, of course. Because if teams aren’t spending as much money as they can on players, why should fans did deep for season-ticket renewals?
Remember that, folks, when you get your invoice — especially when it shows an increase over last year. If your local team isn’t doing everything it can to get the most out of the available cap dollars, why should you do everything you can to cough up hard-earned cash that isn’t being used to its fullest?
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