Mr. Laz
03-17-2005, 05:32 PM
Teams getting smarter with the salary cap
By Pat Kirwan
NFL.com Senior Analyst
(March 11, 2005) -- A few years ago when NFL teams came to the start of the fiscal year and free agency, most had already taken their first significant hit against the salary cap because of incentives that players earned during the previous season that they were not expected to reach. It wasn't an issue that was talked about that often, but it could really do some damage to future plans. Many teams had a negative salary-cap adjustment after the league factored in incentives earned.
This year, only 12 teams took a hit against the salary cap for incentives earned from the 2004 season. The Steelers won 15 games and took the biggest shot to the cap with $5.4 million in charges -- that's the price of winning, I suppose. Meanwhile, three teams (Buffalo, Arizona and Cincinnati) had no ill effects from bonuses earned that had not counted during the season, effectively giving them a "balanced budget."
Where things have changed is the number of teams that essentially received a rebate back in extra salary-cap space for player incentives that the teams were planning on for 2004 but were not earned. If a player has a likely-to-be-earned incentive in his contract and never achieves it during the 16-game schedule, the club gets that space back for 2005. Seventeen teams actually got extra space to work with in 2005, which gives them the chance to be very aggressive this time of year if they care to be.
No team did a better job of bringing space forward from last season to this season than the Minnesota Vikings. They received an extra $15.6 million of space for positive carryovers from 2004. How did they do it and was it conveniently tied to the anticipated trade of Randy Moss?
The Vikings knew a year ago that if they traded Moss this offseason, they would have to absorb about a $7 million dollar hit to the cap for his old bonuses. Not many teams could take that kind of a shot, but the Vikings had no problem absorbing the cap ramifications of trading Moss. Some say the Vikings don't want to spend money, but the contracts given to free-agent signings Pat Williams and Fred Smoot dispute that claim.
By not reaching his incentives, Brian Russell saved the Vikings valuable cap space.
But how did they get all this space? When I took a look at one particular player's contract, I found out exactly how they used $7 million of cap space in 2004 that they promptly got back this year to offset the Moss cap hit. Their starting safety, Brian Russell, had his excusive rights salary of $382,000 in 2004, but he also had an unusual incentive for special teams performance for $7 million. His salary-cap charge for 2004 was an extremely high $7,382,000 because all special teams incentives are likely to be earned and charged in full to the salary cap in the year they are in the contract. Russell never earned the $7 million incentive (most NFL starters have limited special teams work) so the Vikings got $7 million in cap space back and added to the 2005 space. A brilliant move by the Minnesota Vikings, and with 17 teams creating a positive carryover this year, I anticipate more teams doing it next year.
Russell is now a restricted free agent who was never drafted. Another team could sign him to an offer sheet, and if the Vikings didn't match the offer, the new team would not have to surrender any draft compensation. Of course, Minnesota has the most salary-cap space in the NFL and could match the offer sheet if it wanted to do so. This situation forced me to look for other bargains in restricted free agency.
By Pat Kirwan
NFL.com Senior Analyst
(March 11, 2005) -- A few years ago when NFL teams came to the start of the fiscal year and free agency, most had already taken their first significant hit against the salary cap because of incentives that players earned during the previous season that they were not expected to reach. It wasn't an issue that was talked about that often, but it could really do some damage to future plans. Many teams had a negative salary-cap adjustment after the league factored in incentives earned.
This year, only 12 teams took a hit against the salary cap for incentives earned from the 2004 season. The Steelers won 15 games and took the biggest shot to the cap with $5.4 million in charges -- that's the price of winning, I suppose. Meanwhile, three teams (Buffalo, Arizona and Cincinnati) had no ill effects from bonuses earned that had not counted during the season, effectively giving them a "balanced budget."
Where things have changed is the number of teams that essentially received a rebate back in extra salary-cap space for player incentives that the teams were planning on for 2004 but were not earned. If a player has a likely-to-be-earned incentive in his contract and never achieves it during the 16-game schedule, the club gets that space back for 2005. Seventeen teams actually got extra space to work with in 2005, which gives them the chance to be very aggressive this time of year if they care to be.
No team did a better job of bringing space forward from last season to this season than the Minnesota Vikings. They received an extra $15.6 million of space for positive carryovers from 2004. How did they do it and was it conveniently tied to the anticipated trade of Randy Moss?
The Vikings knew a year ago that if they traded Moss this offseason, they would have to absorb about a $7 million dollar hit to the cap for his old bonuses. Not many teams could take that kind of a shot, but the Vikings had no problem absorbing the cap ramifications of trading Moss. Some say the Vikings don't want to spend money, but the contracts given to free-agent signings Pat Williams and Fred Smoot dispute that claim.
By not reaching his incentives, Brian Russell saved the Vikings valuable cap space.
But how did they get all this space? When I took a look at one particular player's contract, I found out exactly how they used $7 million of cap space in 2004 that they promptly got back this year to offset the Moss cap hit. Their starting safety, Brian Russell, had his excusive rights salary of $382,000 in 2004, but he also had an unusual incentive for special teams performance for $7 million. His salary-cap charge for 2004 was an extremely high $7,382,000 because all special teams incentives are likely to be earned and charged in full to the salary cap in the year they are in the contract. Russell never earned the $7 million incentive (most NFL starters have limited special teams work) so the Vikings got $7 million in cap space back and added to the 2005 space. A brilliant move by the Minnesota Vikings, and with 17 teams creating a positive carryover this year, I anticipate more teams doing it next year.
Russell is now a restricted free agent who was never drafted. Another team could sign him to an offer sheet, and if the Vikings didn't match the offer, the new team would not have to surrender any draft compensation. Of course, Minnesota has the most salary-cap space in the NFL and could match the offer sheet if it wanted to do so. This situation forced me to look for other bargains in restricted free agency.