What is Cash to the Cap?

[billsrcursed]

^Where've you been??

 

Either way, good to see you're back. It's gotten...... "odd" around here.

[timbuk3]

i'm trying to get my head around this. when you give it to him, isn't it his? or have the bills been taken over by the federal government?

 

As opposed to paying it out to create a "high quality" product.

 

[Steely Dan]

Wow, you guys do realize the Bills come out spending salary cap money in the middle of the pack right? So they don't spend less than everyone else for the illiterate.

 

The Ralph is cheap myth will forever go on. When people examine the facts it's an easily debunked myth but a lot of people refuse to look at the facts.

 

The only credible argument that can be made by the Ralph is cheap contingent is his coaching payrolls. However, he was willing to part with a lot of dough this year.

 

 

http://www.altiusdirectory.com/Sports/nfl-salaries.php

 

Bills rank in player salary in 2009: 16/32...

 

They dont underspend or overspend, they just pay the wrong players.

 

Enter Buddy Nix.

 

Notice the Pets* are the 30th team on the list and Baltimore is 31st. Their payroll is less than 29 other teams in the league. There is a big difference between spending and spending well. It should also be noted that the Faders spend the most.

 

Here's an article on it. It's from Buffalo rumblings. The article is from 2008 so the lag period mentioned should be over now.

 

What it means for Buffalo

 

I want to be clear when I say that cash to the cap in no way limits the Bills' ability to spend. This is a misconception spread by the uninformed Mortenson's and Clayton's of the world. Granted, there is a lag period where the Bills will be slightly more constrained that other teams. But that lag period is slight in Buffalo, since we have very few large contracts on the books from earlier years. The large contracts we have (Kelsay, Schobel, Dockery, Walker) were accounted for under cash to the cap.

 

The lag period comes in because the Bills will still have contracts on the books under which portions of the signing bonus have been amortized. Once those contracts are cleared off the books and replaced by cash to the cap contracts, the Bills will have just as much freedom to spend, if not more. The greater ability to spend will come in with the flexibility to cut under-performing players without cap hits.

 

The team can spend on par with other clubs under cash to the cap. A traditional NFL team may have, of a total available salary cap of $100 million, $25 million in deferred bonuses and $50 million in player salaries, leaving $25 million to spend. The Bills will have more total room because they would not have the deferred bonuses. Instead, the Bills would just have player salaries on the books. So the Bills would have $50 million in cap room. They have more room, but account for more of the contract up front.

 

In this scenario, the free agents the Bills sign will eat up more of the cap room that they have to spend. Instead of deferring, the Bills absorb the hit. But because the Bills absorb the hit upfront, they will have more room the next year to spend. This system should leave the Bills in a position where they always have more room under the cap at the start of free agency, but a spending power approximately equal to one of the more free spending traditional teams.

 

Read the rest at the link.

[3rdnlng]

The Ralph is cheap myth will forever go on. When people examine the facts it's an easily debunked myth but a lot of people refuse to look at the facts.

 

The only credible argument that can be made by the Ralph is cheap contingent is his coaching payrolls. However, he was willing to part with a lot of dough this year.

 

 

 

 

Notice the Pets* are the 30th team on the list and Baltimore is 31st. Their payroll is less than 29 other teams in the league. There is a big difference between spending and spending well. It should also be noted that the Faders spend the most.

 

Here's an article on it. It's from Buffalo rumblings. The article is from 2008 so the lag period mentioned should be over now.

 

What it means for Buffalo

 

I want to be clear when I say that cash to the cap in no way limits the Bills' ability to spend. This is a misconception spread by the uninformed Mortenson's and Clayton's of the world. Granted, there is a lag period where the Bills will be slightly more constrained that other teams. But that lag period is slight in Buffalo, since we have very few large contracts on the books from earlier years. The large contracts we have (Kelsay, Schobel, Dockery, Walker) were accounted for under cash to the cap.

 

The lag period comes in because the Bills will still have contracts on the books under which portions of the signing bonus have been amortized. Once those contracts are cleared off the books and replaced by cash to the cap contracts, the Bills will have just as much freedom to spend, if not more. The greater ability to spend will come in with the flexibility to cut under-performing players without cap hits.

 

The team can spend on par with other clubs under cash to the cap. A traditional NFL team may have, of a total available salary cap of $100 million, $25 million in deferred bonuses and $50 million in player salaries, leaving $25 million to spend. The Bills will have more total room because they would not have the deferred bonuses. Instead, the Bills would just have player salaries on the books. So the Bills would have $50 million in cap room. They have more room, but account for more of the contract up front.

 

In this scenario, the free agents the Bills sign will eat up more of the cap room that they have to spend. Instead of deferring, the Bills absorb the hit. But because the Bills absorb the hit upfront, they will have more room the next year to spend. This system should leave the Bills in a position where they always have more room under the cap at the start of free agency, but a spending power approximately equal to one of the more free spending traditional teams.

 

Read the rest at the link.

 

 

Simply put cash to cap means that you aren't mortgaging your future with the hope that the salary cap will continue to go up. Sort of like paying off your credit cards each month. Ralph is cheap? He spends in the middle of the pack with the lowest ticket prices in the league without an inordinate amount of luxury suite and seat license money. Now, could that money be spent more wisely. Think Williams, Dockery, Walker, Parrish, Fowler etc.

[ektin]

Cash to Cap is a way to guarantee that you will finish between 6-10 and 7-9. You sign 2nd or 3rd rate FA's who give the fans just enough optimism to think in July that we have a chance and by October they settle into reality that we still need Linemen, linebackers, TE's, QB's and if we are lucky we can get a good draft pick so the cash to cap cycle can continue next year.

[cage]

The Ralph is cheap myth will forever go on. When people examine the facts it's an easily debunked myth but a lot of people refuse to look at the facts.

 

The only credible argument that can be made by the Ralph is cheap contingent is his coaching payrolls. However, he was willing to part with a lot of dough this year.

 

 

 

 

Notice the Pets* are the 30th team on the list and Baltimore is 31st. Their payroll is less than 29 other teams in the league. There is a big difference between spending and spending well. It should also be noted that the Faders spend the most.

 

Here's an article on it. It's from Buffalo rumblings. The article is from 2008 so the lag period mentioned should be over now.

 

What it means for Buffalo

 

I want to be clear when I say that cash to the cap in no way limits the Bills' ability to spend. This is a misconception spread by the uninformed Mortenson's and Clayton's of the world. Granted, there is a lag period where the Bills will be slightly more constrained that other teams. But that lag period is slight in Buffalo, since we have very few large contracts on the books from earlier years. The large contracts we have (Kelsay, Schobel, Dockery, Walker) were accounted for under cash to the cap.

 

The lag period comes in because the Bills will still have contracts on the books under which portions of the signing bonus have been amortized. Once those contracts are cleared off the books and replaced by cash to the cap contracts, the Bills will have just as much freedom to spend, if not more. The greater ability to spend will come in with the flexibility to cut under-performing players without cap hits.

 

The team can spend on par with other clubs under cash to the cap. A traditional NFL team may have, of a total available salary cap of $100 million, $25 million in deferred bonuses and $50 million in player salaries, leaving $25 million to spend. The Bills will have more total room because they would not have the deferred bonuses. Instead, the Bills would just have player salaries on the books. So the Bills would have $50 million in cap room. They have more room, but account for more of the contract up front.

 

In this scenario, the free agents the Bills sign will eat up more of the cap room that they have to spend. Instead of deferring, the Bills absorb the hit. But because the Bills absorb the hit upfront, they will have more room the next year to spend. This system should leave the Bills in a position where they always have more room under the cap at the start of free agency, but a spending power approximately equal to one of the more free spending traditional teams.

 

Read the rest at the link.

 

 

Let put a numerical example to this so we can all be clear....

 

Let assume player is given the following simple 3 year contract that includes $3M Signing Bonus, $1M in Year 1, $2M in Year 2 and $3M in year 3

 

NFL rules allow that contract to be counted against the cap as follows amortizing the bonus over the life of the contract:

-- Year 1 $2M, ... Year 2, $3M, ... Year 3 $4M

 

The Bills would account for the player in their internal budgeting as

-- Year 1, $4M, ... Year 2 $2M, ... Year 3, $3M the entire bonus counting in the first year

 

That overstates the first year of the contract and limits other signings whenever signing bonuses are paid. They could achieve the same thing by not paying a signing bonus, making the first year of the contract guaranteed and giving the entire bonus amount as salary.

 

I don't think the Bills do that. I think they're amortizing the signing bonus contract per the NFL rules, while voluntarily limiting further signings when they've reached their salary + signing bonus cap level (cash to the cap) for a given year, simply as an internal budgeting process.

[DE Bills Fan]

http://www.altiusdirectory.com/Sports/nfl-salaries.php

 

Bills rank in player salary in 2009: 16/32...

 

They dont underspend or overspend, they just pay the wrong players.

 

Enter Buddy Nix.

If that is true, we really are pathetic judges of talent. For a roster so devoid of star quality players, we should be much further down the list. Really depressing, but totally not surprising.

[BillsfaninSixburgh]

The Steelers use a similiar cash to the cap philosophy as Bills, and they get called prudent. It isn't a matter of Bills being cheap, it's that they haven't spent their money wisely and invested in the right players.

[The Dean]

The Steelers use a similiar cash to the cap philosophy as Bills, and they get called prudent. It isn't a matter of Bills being cheap, it's that they haven't spent their money wisely and invested in the right players.

 

Indeed. Although, IMO, coaching has been a bigger issue than talent on the field. Both contribute (or don't), of course.

[NoSaint]

I don't think the Bills do that. I think they're amortizing the signing bonus contract per the NFL rules, while voluntarily limiting further signings when they've reached their salary + signing bonus cap level (cash to the cap) for a given year, simply as an internal budgeting process.

 

is there a reason you believe that? Or does it just support your suspicion? Mathematically it would not work out long term in "saving money." you can play tricks like that to create bubbles for a year or two but it all evens out over time. If they did what you are saying they would never reach the salary floor - there is a minimum. Truly there is no economical advantage to what you are saying past very short periods, which you would have to make up for later. You can cook your books with creative accounting but it will always catch up in real numbers eventually.

 

 

Ps correct me if this is wrong -- signing bonuses amoritize, a roster bonus does not. Buffalo uses far more roster bunuses then an average team. The advantage, no cap acceleration when you cut a player. The disadvantage, if a player gets a signing bonus and gets arrested (ala vick), you can pursue that money because it is a bonus to the execution of the deal, with a roster bonus the day it is paid it is fully earned and can not be taken back for any reason. Buffalo generally has early high priced bonuses that account for not giving big signing bonuses.

[leh-nerd skin-erd]

As opposed to paying it out to create a "high quality" product.

 

 

 

no argument there. if the goal of the organization is to identify the direction they want to go, figure out the best way to spend organizational resources, and ultimately get into the playoffs (and perhaps even take a shot at the big game), they've fallen short there.

 

that's a different argument than the one that he's keeping "your money".

[UB Bull]

Let put a numerical example to this so we can all be clear....

 

Let assume player is given the following simple 3 year contract that includes $3M Signing Bonus, $1M in Year 1, $2M in Year 2 and $3M in year 3

 

NFL rules allow that contract to be counted against the cap as follows amortizing the bonus over the life of the contract:

-- Year 1 $2M, ... Year 2, $3M, ... Year 3 $4M

 

The Bills would account for the player in their internal budgeting as

-- Year 1, $4M, ... Year 2 $2M, ... Year 3, $3M the entire bonus counting in the first year

 

That overstates the first year of the contract and limits other signings whenever signing bonuses are paid. They could achieve the same thing by not paying a signing bonus, making the first year of the contract guaranteed and giving the entire bonus amount as salary.

 

I don't think the Bills do that. I think they're amortizing the signing bonus contract per the NFL rules, while voluntarily limiting further signings when they've reached their salary + signing bonus cap level (cash to the cap) for a given year, simply as an internal budgeting process.

 

CORRECT! excellent post

 

to sum it up: Signing bonuses are amortized whether the team wants to or not. The cash-to-cap philosophy is simply an internal method of accounting.

 

Everyone should re-read this post.

[NoSaint]

CORRECT! excellent post

 

to sum it up: Signing bonuses are amortized whether the team wants to or not. The cash-to-cap philosophy is simply an internal method of accounting.

 

Everyone should re-read this post.

 

 

I bring back my original question -- are the bills far more reliant on roster bonuses then other teams. A roster bonus for being on the team a week after the contract is signed is not amortized.

 

Also, over the course of several years accounting tricks will not cover up a lack of spending. If you read the article, you see the mention of a short transition and then more money available. It would work out dollar to dollar the same through a cycle of contracts for the team.

 

It's just a smarter way to manage cash flow. If I spend 5 million for 4 straight years, or 20 million this year with none for the next three, or 20 this year but amortize it -- it all shows up as 20 million in spending, and takes up 20 million in cap space. Basically the bills have decided not to hand out 120% of the cap space one year and then be left with 80% the following year( lto put it in very oversimplified terms).

[todd]

Cash 2 Cap is Ralph's way of keeping more of your money.

 

Instead of all the whiny bitches complaining about it, why not just refuse to give him your money?

 

The whiny bitches are starting to bother me.

[CountDorkula]

Instead of all the whiny bitches complaining about it, why not just refuse to give him your money?

 

The whiny bitches are starting to bother me.

 

The Todd has spoken......

 

 

.......and I Agree

[todd]

And yes, I am being a whiny B word for whining about whiny bitches. :-)

 

Instead of all the whiny bitches complaining about it, why not just refuse to give him your money?

 

The whiny bitches are starting to bother me.