Football salary cap question?.... (1 Viewer)

[todd s]

Their is a big debate on the radio today in NY here about since the Jets won't be able to get Reggie Bush. That they should go after a QB. But, since they owe Pennington so much...they couldn't afford it under the salary cap. My question is this...If Pennington is out for the year. Why should his salary be considered part of the cap? I know they still have to pay him...But, doesn't seem right that a player who is out a full season (not a few games) should count against the cap. And yes I know life isn't fair.

 

[Casey Trowbridg]

It counts against the cap because its guaranteed for the year. If a player is on the roster 1 week before the start of the season, his salary is guaranteed for the entire season whether he plays the whole season or not.

Plus, if a player were to get hurt, go on IR and clear cap room that way it would give the team a leg up if say there were actually a street free agent worth paying money to.

The current system is the best and makes the most sense.

 

[Lew Crippen]

What Chad Pennington is paid this year has (almost) nothing to do with next year’s cap.

Although he was placed on injured reserve this year, he is still getting paid. Since he is getting paid a salary, this salary is subject to the cap. Clear so far? Still it made sense to put him on injured reserve, because that opens a spot on this year’s roster.

Next year the Jets could choose to release Pennington and not have to pay his salary. However they would still have to take the hit for his signing bonus (about $12M left plus another $3M roster bonus). This is the weird part. The Jets have already paid the $12M, but it did not count against the salary cap, because signing bonuses are prorated against the life of the contract.

This is very good for the club, because they get to defer the money and charge it against the salary cap in later years (when the believe their cap will be larger). But if the club releases a player before the contract is over, the full amount of the signing bonus still has to be charged against the cap. It was real money that was part of the salary, so it has to be realized sometime.

The roster bonus has not yet been paid and won’t have to be paid if the Jets decide to release him. However (in his case) the timing is bad for the Jets, because they will probably have to decide before they know if he will be able to play.

 

[Lew Crippen]

And one more thing Todd—when a player is released, all of the accrued (remaining) bonus gets charged against the cap in the upcoming year. So in Chad Pennington’s case, if the Jets released him before he is placed on the 2006 roster, they save all of his salary and also the $3M roster bonus. But they will be charged the $13M remaining to be realized on money already paid.

And they probably would not even know if he could play or not.

 

[Scott Merryfield]

To add to Lew's excellent explanation, there is a certain date (I think it's June 1st, but I'm not positive), where any player released after that date allows the club to spread the remaining signing bonus money over the next two years salary cap, should they desire. You will see numerous players released after that date each preseason.

Think of the signing bonus as the guaranteed portion of the player's contract (which he receives up front), and the annual salary as non-guaranteed.

 

[Lew Crippen]

Exactly Scott--and of course that date is well after the roster bonus payment is due (that date is typically just before training camp). So if a club chooses to wait, then they owe the roster bonus (in the case $3M) and instead of taking the $13M hit immediately, get to spread it out over 2 years—again in this case $6.5M each year.

If the Jets take this approach, they will take a salary cap hit of $6.5M+$3M=9.5M instead of $13M in 2006. In 2007 they will take another $6.5M hit instead of $0.

All very complex. I can’t remember the actual 2006 salary implications, but I’m sure that there are some.

 

[Shane Martin]

Scott,
You are correct that it's June 1st. Just wanted to clarify. This is a most excellent explanation of how the cap works in the NFL.

Other leagues work differently like the NBA where everything is guaranteed.

 

[todd s]

Thanks for the info. I am more of a baseball fan. But, try to follow whats up with my local football teams. I was listening to ESPN radio this morning. They were discussing how it might be better for Houston to trade down and get more picks than to just take Reggie Bush. I missed most of the discussion. But, that seemed to be the jist.

 

[Scott Merryfield]

I think you need a PhD in math (or be really drunk) to understand the NBA's salary cap.

 

[nolesrule]

a PhD in math won't do you any good with the NBA salary cap, because there is no logic to it.

Well, maybe a PhD in fuzzy math.

 

[JeremyErwin]

Nonsense. The NBA salary cap is simple and logical. There's even a FAQ that explains it all

 

[nolesrule]

Sorry, that faq creates more questions than it answers. Specifically...

wtf? and why?