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Salary Cap Question

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  • Salary Cap Question

    ok, so everybody makes a certain amount every year, but what is each player's cap value? what the person makes minus their signing bonus that was broken up over the life of the contract?

    help me understand the cap. thanks.
    Official 2009 Sponsor of nobody

  • #2
    Extremely complicated but I'll do my best.

    A player's cap value while on the team is his contractual salary + (the signing bonus divided by the number of years of the contract).

    For example, let's say a player signed a five year, $15 million deal with a $5 million signing bonus. The signing bonus is equally distributed throughout the contract. $5 million divided by five is $1 million. So the $1 million goes on the cap each of the five years. What's left of the contract is a salary of $10 million over five years, which of course could be structured in any number of ways. It could be that a player gets $1 million in salary in the first four years, then gets $6 million in the fifth year. Or it could be structured some other way. Whatever the salary is in each year is added to the $1 million from the signing bonus to make up the cap value.

    Here's an example:

    5-year, $15 million contract, with a $5 million signing bonus.

    Year 1 salary: $500,000
    Year 2 salary: $950,000
    Year 3 salary: $1,000,000
    Year 4 salary: $3,500,000
    Year 5 salary: $4,050,000

    Year 1 cap value: $500,000 + $1,000,000
    Year 2 cap value: $950,000 + $1,000,000
    Year 3 cap value: $1,000,000 + $1,000,000
    Year 4 cap value: $3,500,000 + $1,000,000
    Year 5 cap value: $4,050,000 + $1,000,000

    That's it in its simplest form. There are other things that can affect a cap value though. Let's take the same contract. Let's say it is for a running back and there is an incentive in Year 1 that if he scores 13 touchdowns, he gets a $500,000 bonus. Well, if he reaches that incentive, the $500,000 is applied to the Year 2 cap value, even if the player is no longer on the team for whatever reason.

    There are also contracts with roster bonuses, such as Kurt Warner's. Let's the same contract I outlined above and add a roster bonus of $3 million to be given if the player is still on the roster on March 1 after Year 2 that triggers the remaining three years of the contract (if the roster bonus is declined, the player becomes a free agent). That $3 million is spread equally over the remaining three years of the contract in terms of cap hit, so $1 million per year. So if the roster bonus is picked up, the cap values now look like this:

    Year 3 cap value: $1,000,000 + $1,000,000 + $1,000,000
    Year 4 cap value: $3,500,000 + $1,000,000 + $1,000,000
    Year 5 cap value: $4,050,000 + $1,000,000 + $1,000,000

    Now, let's say the player is cut after the second year of the contract. There is still $3 million left in signing bonus money left on the cap. Well, that money accelerates and it is all is applied toward the salary cap in Year 3. So if the player is cut after Year 2, his Year 3 cap value is $3 million and in Year 4 and Year 5 he is off the books. If the player is cut after June 1 though, the remaining signing bonus money is split up over two years. So the cut player counts $1.5 million in Year 3, $1.5 million in Year 4, and $0 in Year 5. That is why you hear so much about the June 1 cut date because it spreads out the salary cap hit rather than putting it all in one year. The contractual yearly salary, however, is non-guaranteed and does not apply to the cap at all once the player is cut.

    I know all of that is extremely complicated. If there is anything I can clarify, let me know and I'll try my best.


    • #3
      Nicely done.
      . . . and to tell you this: I work with gays, have friends who are gay, go to church with gays. Most of them are aware that I believe that homosexual behavior is sin. Some of them actually agree. Most don't. It's OK . . . because they also know or at least have been made aware of my multitude of sins: adulterous heart, lustful and covetous behavior, wicked pride, angry spirit . . . do I need to go on?
      mike smith, post-dispatch online sports editor


      • #4
        dev.........crystal clear now. Thanks a bunch.
        Official 2009 Sponsor of nobody