Wednesday, May 27, 2009

Salary Cap Schmalary Cap - A Financial Bit o' Tin

  • Turns out Jason Taylor is not THAT cheap. Let's clarify the contract because there are a lot of conflicting reports in the mass media. Here is what JT actually costs.
$400k signing bonus (this is the 'guaranteed' money)
$700k salary (i.e. $43, 750 per game)
$500k incentives (these are always kept private, but I would guess they include staying healthy, participating in a certain percentage of plays or games, and number of sacks.)
This adds up to $1.6 Million total. But wait...that's not the ACTUAL total, is it...
Turns out Taylor is still owed approximately $1.7 Million by the Dolphins from his previous contract. Ah yes, that means Jason Taylor is scheduled to smack up the Salary Cap for $3.3 Million in 2009! Cheap for Jason Taylor, sure, but still a sizable blow to the Cap.

  • Will Allen was ACTUALLY scheduled to hit the cap for $4.9 Million this year making him the fifth-highest paid player on the team behind Joey Porter, Jake Long, Ronnie Brown and Vernon Carey. Then he was to be a free agent in 2010. Now with his re-signing, it's unclear how much he will hit the cap for but let's assume it will be more, since his guaranteed money went from $900k to $10 million over 3 years (this could be very erroneous reporting and may turn out to be significantly less).
  • Channing Crowder signed a 3 year deal that will hit the cap for $3.5 M in 2009. Strangely enough, they managed to sign him without any guaranteed money. He either has the worst agent in history, or he really loves that Miami fishing.
  • Lousaka Polite got a pretty good deal for a relatively unknown full-back. As long as he keeps his YPC average above 1 yard, he'll be getting about $1.8 Million this year.
  • Rookie Tight-End, John Nalbone, will have to compete with David Martin, Anthony Fasano, and Joey Haynos for a roster spot but for now he'll put a $483k dent in the cap.
While this is highly-speculative, and I'm no math expert, and even less of a salary cap nerd, I did do some math for this post and came up with an approximate projection of $8.9M of current cap room for the Dolphins.

This may seem like enough to sign the partnership of Smith, White, and Davis, with possible room for a low-ball contract for a rookie wide receiver, but one must factor in that Matt Roth, Anthony Fasano, Davone Bess, Ricky Williams, Jason Ferguson, Tyrone Culver, Dan Carpenter, John Denney, Ronnie Brown and even Chad Pennington will have their agents attacking the front office for extensions of their own, though I suspect they will tell both Brown and Pennington flat out that they won't talk contract until 2010.


So, you can see there really isn't a lot of cap room for the Dolphins to work with here. It's clear that we can't afford to trade for Anquan Boldin, or to extend Ronnie Brown's contract. This time last year we had only a handful of players who wanted an extension, and we also had more than double the cap room we have now (and this was AFTER Jake Long and Justin Smiley practically mugged the salary cap).

So unless Pat White plans to play for potato chips and Wilford will void his current contract in favor of a box of oreos, this could get ugly, and players could be let go simply to save money (see Jason Allen, Ronnie Brown, Randy 'Freightliner' Starks, etc.)

35 comments:

  1. Tin,
    I presume this analysis includes the recent cap extension? I never thought we had a shot at Boldin, but we can all dream.....?
     
    Just less than 2 hours to k.o. Getting very excited now - global audience of >200m expected to watch. Needless to say I won't mention the outcome until tomorrow.

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  2. Yes this is with the current cap of $128 Million.  We always had a shot at Boldin, it was never about the cap (until now), the Trifecta just doesn't value wide receivers at $10M a year.  They will always reserve big money for o-line, running backs and the defense.
     
    They are actually showing the CL match here on ESPN so I get to watch it on the big screen tonight.  I have the Tivo set for 2:30pm my time.

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  3. Oh, and much appreciated on the not mentioning the outcome ;)

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  4. Nice breakdown Tin, the contract extension before the rookie signing made me wonder about this.
     
    Interesting point about dropping people to save money, the thought hadn't crossed my mind. As much as I keep hearing it mentioned I don't see Ronnie going anywhere this year... maybe not re-signing him ( don't we have some ability to keep him one more year without giving him a whole new contract), but definetely not dropping him.
     
    I have one more question about dropping someone to save money. The whole thing about not dropping Wilford because he would cost money anyways. Is that because it was guaranteed money? And how is it that some people can be dropped to save money like Holiday and Wilford would cost money

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  5. The Knight who says Ni!May 27, 2009 at 12:42 PM

    \nI wouldn\'t think we\'d have much cap space left by now. I don\'t worry about the contracts effecting the rookie salary cap because teams know what they need to sign their draftees.

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  6. The only way we'd be able to keep Ronnie is if he decides to take a bargain basement contract like Channing Crowder next year.  Considering Brown would be the cream of the crop in the free agency period (unlike Crowder) I don't see it happening.  Either Ricky or Ronnie would have to go.  I'd expect Ricky would sign for whatever he could get.
     
    We did save $8 million by letting Holliday go because he was due a roster bonus.  Had he re-worked his contract he probably would have stayed (progress-stopper my butt).  However, we still owe him $3 million in 2009, so Holliday is still taking a big bite out of the cap.
     
    Wilford on the other hand, is a Trifecta guy and he got his bonus and will put a $3M smackdown on the cap this year whether he's on the team or not.  That's essentially the reason he's still around.  If they keep him, it will cost them $3M against the cap.  If they cut him, it will still cost them $4.5M against the cap (his signing bonus is 1.5M/yr).  However, if they cut him AFTER June 1st, the cap hit  can be split over two years).  If they trade him, they would still have to pay the full balance of the bonus immediately ($4.5M).
     
    Basically the trifecta screwed up big time by giving this contract to Wilford.  He was brought in beause he was 'productive' in Jacksonville, but let's face it, the guy averaged 35 catches and 3.5 TDs a year.  Those are low numbers for a tight-end.  Why they thought he was the Bee's Knees is beyond me.   Even if he was better than he was, the contract is insane.  In my mind, giving Will Allen $10M guaranteed is a continuation of this mortgaging go for broke attitude that could really blow up in their faces a couple of years down the road.

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  7. Thanks Tin, that whole thing had me confused. Makes more sense now

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  8. Knight :  Your right in that assesment.  I don't know how teams stay under the cap space but they seem to do it.  I don't think they worry about it, they find a way to sign a player if they need him.  Take a look at NE, with all those players how do they stay under the cap ?

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  9. I did some 'research' on the cap stuff earlier this year, because being the accountant type, I thought I might be able to learn some useful stuff.  Sadly it is on the old laptop, and I didn't get that folder back when it crashed.  But from what I have read, there are so many ways the contracts are worked, bonuses, etc., there is plenty of room for some creative accounting.  Trying to figure it out is a massive algebra problem, with so many variables we aren't privy to, so why try?  Management knows the number, who they are keeping, who they plan to cut, and the financial implications of it all.
     
    On another note, I was dismayed to hear this on local news.  We just can't catch a break up here.
     
    http://www.tallahassee.com/article/20090526/BREAKINGNEWS/90526021/1001/RSS

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  10. Fang, it is impossible to go OVER the cap.  Any contract that would put the team over the limit is automatically voided by the NFL.  So basically if you try to go over you hear a big 'Wah Wah Waaaah' and then the words 'TRY AGAIN' are texted to you from Goodell.

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  11. "Trying to figure it out is a massive algebra problem, with so many variables we aren't privy to, so why try? "
     
    Now that's a fine attitude! 
     
    Actually, as far as the funny math goes, the truth is that there really isn't as much as there used to be.  They changed all the rules in 2006 and it's quite regimented how you pay players.  For one, their salary cannot increase/decrease by more than 25% from year to year, and their signing bonuses are prorated over the course of the contract (example,  Wilford's $6M over 4 years is paid out at $1.5M per year).
     
    There's really only one way to circumvent the salary cap and that's to go up to a player like Will Allen and say, if you get 8 interceptions, you'll earn a $2M bonus.  Well since Allen getting 8 INTs would be considered 'not easily attainable', then the $2M would not count towards the salary cap.  But any other bonuses would.  There's really only one way to avoid the trouble altogether, and that is to not pay out big guaranteed money.  But then a couple years down the road you'd end up with Vonnie Holliday about to earn $8M bonus for 'being on the roster' and you have to cut him.
     
    So in the end it's all about finding a balance, and before that, doing your homework and finsing players that you want to stick around for a long time.
     
    btw, I went to a party on the weekend and they had  'margarita brownies' .  They were actually blondies, but they had actual margarita mix in them.

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  12. The Knight who says Ni!May 27, 2009 at 4:28 PM

    LOL, that is true. We should be fine.

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  13. I have a recipe for margarita pie.  The crust is made out of crushed up pretzels, for the salt, and the filling is similar to key lime pie, but with margarita mix, a fair amount of tequila.  It was very popular at a grown up girls pajama party I went to a year or so ago.
     
    Now I also have a brownie recipe, but I don't put margarita mix in them... ;)

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  14. <span><span><span><span><span>approximate projection of $8.9M of current cap room for the Dolphins.</span>
    </span></span></span></span>
    <span><span><span><span>""</span>This may seem like enough to sign the partnership of Smith, White, and Davis, with possible room for a low-ball contract for a rookie wide receiver, but one must factor in that Matt Roth, Anthony Fasano, Davone Bess, Ricky Williams, Jason Ferguson, Tyrone Culver, Dan Carpenter, John Denney, Ronnie Brown and even Chad Pennington will have their agents attacking the front office for extensions of their own, though I suspect they will tell both Brown and Pennington flat out that they won't talk contract until 2010.""</span></span></span>
    <span></span>
    <span></span>
    <span><span>Funny storyline title!! Tin,NOT arguing cuz your obviously more of a""capnerd/math expert""than you think,and I pay no mind to others assets..</span></span>
    <span></span>
    <span><span>So my question is,what about the 30plus other inconsiquential roster spots/players,that'll be disgaurded of rapidly in the coming wks/mnths from the current roster of 85??</span></span>
    <span></span>
    <span><span>I have know idea if they presently count against the cap or how much the average minimal contract is,but even if it's as low as 250k(again I don't know),times 30 or so is what(7.5 mill or so)??  (8.9 + 7.5  ???)</span></span>
    <span><span>I'm also sure that a few aces remain up the sleeve!!</span></span>
    <span></span>
    <span><span>I believe TS has won"OUR"players hearts!!</span></span>
    <span><span>Shoot,ONE yr ago and recent yrs previous,players were looking to take less elsewhere to get out of Miami!!</span></span>
    <span><span>All of a sudden MANY are taking less to stay/come,in hopes of retiring here.. I believe RB/CP are two one of these guys!! </span></span>
    <span></span>
    <span><span>You mentioned that running back is one area that TriTuna puts $$ aside for,and when healty RB is too well rounded for this O,too hard of a worker,and a team player..I believe they'll come to a benificial comprimise for all!! </span></span>
    <span></span>
    <span><span>And CP,has to think that the regime were angels sent to exclamate his career(and visversa),while opening possibilities of extending it into the realm of coaching..</span></span>
    <span><span>Of course I'm biased,but I don't see better scenario's out there for for the players or the regime!!</span></span>
    <span></span>
    <span><span>Even JT's heart has been won,and he wasn't even around for the excitement!! Cris Cooley said his locker was next to JTs,and JT was very regretful of leaving the FINS,while having to watch from afar how enthused his former teammates were to play for TS!!!</span></span>
    <span></span>
     

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  15. The Knight who says Ni!May 27, 2009 at 6:31 PM

    You put the sticky from your garden in them don't you?  ;)

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  16. Knight:
    Me?  O:-)
     
    No green thumb here.  I have to go to the farmer's market to buy plants other people have already started.  The only herbs I currently have growing are basil, cilantro, and tarragon.  I don't think any of those go well in brownies.
     
    But I remember when I lived in Missouri, my friend used to make some that were magically delicious!

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  17. ""If they put Will Allen on the trading block, does anyone disagree he'd be the top free agent corner out there? ""

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    <div class="js-singleCommentText"><span><span style=" ">“</span></span>The only way we'd be able to keep Ronnie is if he decides to take a bargain basement contract like Channing Crowder next year.  Considering Brown would be the cream of the crop in the free agency period (unlike Crowder) I don't see it happening.  Either Ricky or Ronnie would have to go.  I'd expect Ricky would sign for whatever he could get.""</div>
    <div class="js-singleCommentText">MAYBE this regime wants the creams of the crops b/4 rising to the tops.. (ONLY THEY REALLY KNOW WHAT THEY HAVE,and what they need)!! Signing WA prior his o10 status of"top FA corner"and saving @least 3-4mill a yr to retain his services had we waited.. While doing the same w'RB THIS YR(prior to 09s rise to the top),would IMHO be HIGHLY recommended!! Sign him now,we can have him for o11 backup money(exg),(RWs out of the league by o11).. Try to sign RB after this yrs breakout yr (that he was on his way to in 07pre-injury),and his price doubles per yr.. IMHO,give Ronnie that 7.5 that the 30 cuts SHOULD add to"OUR"cap space,use the 8.9,and aces to sign the rooks,and whoever else the regime deems worthy!! JMcapignorantO!! </div>
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  18. during the offseason, only the top 51 players count against the salary cap.

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  19. ...does the current salary cap not go away next year and get replaced by whatever the new player union contract calls for? ...one of things that's almost a certainty are new caps on rookie contracts ...we were forced to let Holiday go because of the money we had to pay Long ...which is insane imnsho ...what other successful business puts all of its money in unproven new hires and lets highly productive veterans go instead? 
     
    ...and I'm not knocking your numbers tin but neither am I going to lose any sleep over them ...I've seen so many salary cap analyses that are wildly different in their conclusions that I just ignore them and trust that the trifecta has it under control ...that may seem a bit simplistic to you but like I said, the numbers vary wildly depending upon who you listen to ...so I just hit the mute button.

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  20. Herdfan I bake specialty cakes and pies for special occasions, You know the stuff with flowers and things on them and I have great recipe for brownies,  They are simply sinfull but I think one could make them even more sinfull if needed.  If you want the recipe let me know.  The way it appears many of the FSU players would like the brownies with the added secret ingedient.

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  21. Man are you on track with this.  No one knows what will come down in 2010.  I have to think things will be different.  The structure of the pay scale is upside down and really needs to be fixed.  I'm just not sure if the union and owners will agree on how to fix it.  Something tells me this going to be a problem next year, and I wouldn't be surprised to see a lockout from the owners or a walkout from the players.

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  22. I remember reading the 51 player thing too, and it makes sense to a point.  But what about the 2 players that end up making the roster.  Do payments to them in the off season count toward 'total player salary'?
     
    Also, I seem to remember someone saying the Dolphins were well under the cap for last year.  Is that correct?  If thats true, why couldn't they take the full hit for some of the signing bonuses in one year rather than deferring, and leave the space for following years when you need it.  It doesn't seem like you would actually leave some cap space unused in a year.  Or have I totally misunderstood this?

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  23. ...a few things are certain to change besides the salary cap and rookie vs veteran pay scales ...player agents have too much power and drive the costs ever upward simply because they work on a percentage ...revenue sharing issues especially between teams with public financed stadiums/facilities and those privately financed ...player share of total revenues, etc
     
    ...all of this coming in a recession year when teams will almost certainly see both gate and tv revenues crash ...yeah, I'd think the chance of a serious showdown of some kind is very likely even though both sides would love to avoid it.
     
    ...the next big thing is going to be the nfl imposing caps on team staffing costs ...with top coaches making millions and assistants routinely exceeding a mil, the disparity between rich teams/owners able to attract big talent (aka the trifecta) and those who can't is starting to impact competition as much as the players do ...imnsho of course.

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  24. The fins were under the cap at the beginning of training camp, but once they re-signed Ricky Williams, Greg Camarillo, and also Chad Pennington, and the addition of other players during the year, I don't think they had a huge cap space by the end of the season.
     
    But the cap is the MAXIMUM team salary allowed, they don't have to spend that much.  There IS a minimum, which I think is set at about $112 Million this year.
     
    Keep in mind that many, many teams barely spend the minimum year in and year out, and they are generally the worst teams in the league, ie. the bengals, detroit (i think they are on NFL foodstamps up there), etc.  Usually the only teams who spend the maximum are the ones who have superbowl-ready rosters, like the Pats, the Jets last year, the Steelers, the Cardinals, etc.
     
    As for the signing bonus, they USED to be able to do that but since 2006, the bonuses are prorated.  Not by choice, per the NFL rules.
     
    And the reason you don't just fill up the cap to save space the next year, besides it being next to impossible thanks to the CBA, is that you actually have to pay the money, and there's no reason to pay out extra millions of dollars if you don't have to.

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  25. Oops, I didn't answer your first question.  During the offseason, all the way up to the week of final cuts, only the top 51 salaries count against the cap.  Once that day comes, the final 53 salaries count.  Keep in mind, the final two players are generally bottom feeders on the roster and will get paid minimum wage, so it's usually not a big jump.
     
    Oh, and the payments during the offseason, OTAs, camps, etc, is part of the contract and is not additional to the cap, i.e. if a player, say JT, is under contract for $700k this season, a portion of that is paid out weekly/bi-weekly during the offseason, but the big checks come when the season starts.  (although sometimes, there might be a bonus check for winning a starting job, or for making weight goals, etc)
     

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  26. email is optionalMay 28, 2009 at 7:57 AM

    Ouch. Normally, it's Utd handing out lessons. That one hurt.

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  27. I wasn't saying using it up to pay players more, just because it is available.  What I was getting at was actually answered when you explained the bonus HAS to be prorated.  I'm a cash basis sort, so I guess that's why I'm thinking this way.

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  28. See the new blog update
     
    http://tinsfins.blogspot.com/2009/05/deja-vu-cest-la-vie.html

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  29. Can I be on your Cash Basis plan please?

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  30. I'm still confused.
     

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  31. Your average college head coach makes as much as an NFL coach.  If you impose caps on the NFL, the coaches will all flee to the college ranks.

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  32. ..."average college head coach" ...no way, not even close ...a few make big bucks, but very few ...and the staff far less ...iirc both Waanstadt and Saban took major cuts when they went back to college coaching and both are at top tier football factories. 

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  33. lemmus, while there are about ten coaches in the NFL that make significantly more than any college coach, C-holmes is partly right as well.
     
    Look at Lane Kiffin, he gets fired from the NFL, then ends up getting paid twice as much in college.  There are over 50 college coaches making more than $1 mill a year, and I think almost every coach in the SEC makes more than $3 mill a year.  Bob Stoops makes $6.5M/year.  That is way more than most NFL coaches.  I think Sparano brings down about $2 mill.

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  34. but you're right, it's not the 'average' but it's hard to compare averages of a small group like the NFL against a bigger pool (college).

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  35. ...lol ...I didn't make the comparison
     
    ...Sparano made 2.7mil last year on a 4 year contract ...I suspect
    he was rewarded well this year for the results he produced last year but I've not seen any new numbers.
     
    ...and its not a good comparison anyway ...the NFL is the top of the game for football coaches ...sure there are those who prefer college but most savor the idea of a chance to coach the best of the best ...and while total compensation is a lure to any and all including you and me, most would take less for a shot at the top ...imnsho of course.
     
    ...but my point was and is that there is going to be some kind of cap put on coaching staff numbers and compensation for the same reason they exist on players ...to keep the richest owners from buying their way into being competitive.

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