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Baas Restructures


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All this restructuring has to hurt us later. It's like living on credit.

 

yes. borrowing from Peter to pay Paul as it where.

 

The hope is that with the new TV deals in 2014 there will be a jump in the cap though.

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yes. borrowing from Peter to pay Paul as it where.

 

The hope is that with the new TV deals in 2014 there will be a jump in the cap though.

 

I think the hope is to keep the pieces around Eli for the next four-five years before he retires.

 

Then go through a rebuild,

 

Seems to be the normal for any team with a franchise QB.

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Unless they get cut right?

 

No, it takes the salary, which is not guaranteed, and converts it to bonus which is guaranteed. Bonus, for salary cap purposes, gets prorated over remaining years of contract. Salary, for salary cap purposes, is includeable in current year of contract.

 

Take Rolle for example.

 

2012 salary is 6,750,000; bonuses 2,350,000

2013 salary is 7,000,000; bonuses 2,350,000

2014 salary is 7,000,000; bonuses 2,350,000

 

If we cut him today, we save 6.75 million on the cap, but we remain on the hook for the bonus money. The 7.05 million in bonus money gets accelerated into this year. So, cutting Rolle, contrary to what I may have posted earlier in another thread, would actually COST us 300K this year, but save us 9.35 million in each of the next two years.

 

The magic date is June 1st. If we cut Rolle after June 1st of this year, the one year of bonus money is allocable to this year whereas the remaining two years of bonus money hit next year. So, cutting Rolle after June 1st this year would save 4.4 million this year, but create a hit next year of 4.7 million when he's not on the team.

 

Now, if we reduce the 6.75 million salary to 0.75 million salary and give him a 6 million bonus...Rolle still gets paid the same amount this year. However, the cap number for THIS year gets reduced to 2.75 million (6 million bonus/3 remaining years + 0.75 million salary) + other previously allocated bonuses. However, the cap in the next two years would be 11.35 million each (9.35 current hit + 2 million added hit from restructure). Following this same example, if we then cut him next offseason pre-June 1st, we take a hit next year of 1.7 million (two years of bonuses totaling 8.7 million (2.35 + 2.35 + 2.00 + 2.00) less the 7 million savings on salary). If we cut him next offseason post-June 1st, we save 2.65 million next year (7 million salary savings less 4.35 bonus hit)...also creating a 4.35 million hit in the final year of his contract where he'd no longer be here.

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Ummmmm.......that is not simple. Especially not for math retards like myself.

It's actually kind of simple in terms of it makes that player un-cuttable unless you want dead money on the cap unless all bonus money has been paid. I suppose it's not the simplest thing in the world, but hey I understand it pretty well and I suck at math,

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Ummmmm.......that is not simple. Especially not for math retards like myself.

 

You need only remember that for cap purposes, salary hits in the year it's for and bonus is divided out evenly over the remaining years of the contract. From there, it's only addition/subtraction to compare what the player is at now vs. what they'd be at given a proposed change to their contract.

 

If you put it on paper in numerical form, it's much, much easier to understand than trying to read through someone's post.

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No, it takes the salary, which is not guaranteed, and converts it to bonus which is guaranteed. Bonus, for salary cap purposes, gets prorated over remaining years of contract. Salary, for salary cap purposes, is includeable in current year of contract.

 

Take Rolle for example.

 

2012 salary is 6,750,000; bonuses 2,350,000

2013 salary is 7,000,000; bonuses 2,350,000

2014 salary is 7,000,000; bonuses 2,350,000

 

If we cut him today, we save 6.75 million on the cap, but we remain on the hook for the bonus money. The 7.05 million in bonus money gets accelerated into this year. So, cutting Rolle, contrary to what I may have posted earlier in another thread, would actually COST us 300K this year, but save us 9.35 million in each of the next two years.

 

The magic date is June 1st. If we cut Rolle after June 1st of this year, the one year of bonus money is allocable to this year whereas the remaining two years of bonus money hit next year. So, cutting Rolle after June 1st this year would save 4.4 million this year, but create a hit next year of 4.7 million when he's not on the team.

 

Now, if we reduce the 6.75 million salary to 0.75 million salary and give him a 6 million bonus...Rolle still gets paid the same amount this year. However, the cap number for THIS year gets reduced to 2.75 million (6 million bonus/3 remaining years + 0.75 million salary) + other previously allocated bonuses. However, the cap in the next two years would be 11.35 million each (9.35 current hit + 2 million added hit from restructure). Following this same example, if we then cut him next offseason pre-June 1st, we take a hit next year of 1.7 million (two years of bonuses totaling 8.7 million (2.35 + 2.35 + 2.00 + 2.00) less the 7 million savings on salary). If we cut him next offseason post-June 1st, we save 2.65 million next year (7 million salary savings less 4.35 bonus hit)...also creating a 4.35 million hit in the final year of his contract where he'd no longer be here.

 

Thanks for educating us Roc. I'm scratching my head over the size of Rolle's and Canty's contracts. Not saying they're not good players.. they are... but they seem to be getting paid at pro-bowl levels and in turn is handicapping the organization from signing solid players.

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Thanks for educating us Roc. I'm scratching my head over the size of Rolle's and Canty's contracts. Not saying they're not good players.. they are... but they seem to be getting paid at pro-bowl levels and in turn is handicapping the organization from signing solid players.

 

It's not easy putting that in writing, but you're welcome. Those big contracts are ones we're likely stuck with this season unless they agree to pay cuts, not just restructuring.

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You need only remember that for cap purposes, salary hits in the year it's for and bonus is divided out evenly over the remaining years of the contract. From there, it's only addition/subtraction to compare what the player is at now vs. what they'd be at given a proposed change to their contract.

 

If you put it on paper in numerical form, it's much, much easier to understand than trying to read through someone's post.

 

OK, this made more sense to me. Thanks roc.

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It's not easy putting that in writing, but you're welcome. Those big contracts are ones we're likely stuck with this season unless they agree to pay cuts, not just restructuring.

 

Which almost never happens, unless you are about to be cut. The players are always restructuring because it's actually better for them financially. Maybe you loose a little bit of money but then all the rest is guaranteed.

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Which almost never happens, unless you are about to be cut. The players are always restructuring because it's actually better for them financially. Maybe you loose a little bit of money but then all the rest is guaranteed.

 

That could be the avenue the Giants go down with Rolle and maybe Canty. We'll guarantee X dollars now, but overall you'll get paid less. So essentially the player decides to pay x dollars to guarantee a larger portion of their contract.

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Anyone know if the "restructured" players get the cash up front, or do they actually spread out the payments over the years ie. is it just an accounting procedure?

 

Generally speaking, it becomes an upfront, guaranteed, bonus-like payment that for cap-accounting purposes, is prorated out over the remaining years of the contract.

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Generally speaking, it becomes an upfront, guaranteed, bonus-like payment that for cap-accounting purposes, is prorated out over the remaining years of the contract.

 

That's what I thought, thanks. So even tax-wise these guys aren't giving up a dime.

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