Cash to Cap Question...

[rsxfirefighter]

Correct me if I am wrong....and I know there are alot of people on this board who love to do it.

 

I keep reading how Ralph and the Bills are going to be screwed under this new CBA because of the Cash to Cap basis of the Salary Cap.

 

But if I do remember correctly, we all have been BIT..ing the past few years because Russ Brandon has been shoving down our throats the Buffalo Bills Salary Cap Approach of none other than "Cash to Cap".

 

So if the NFL is now going to this Basis...how is this going to screw our Beloved Buffalo Bills? I honestly think this makes the Free Agency Market more competitive because you wont have teams like Washington and Dallas throwing out ridiculous signing bonuses to multiple free agents to bring them in because they can hide that money later on down the line.

 

But as I stated before, Flame On!!!

[nucci]

Correct me if I am wrong....and I know there are alot of people on this board who love to do it.

 

I keep reading how Ralph and the Bills are going to be screwed under this new CBA because of the Cash to Cap basis of the Salary Cap.

 

But if I do remember correctly, we all have been BIT..ing the past few years because Russ Brandon has been shoving down our throats the Buffalo Bills Salary Cap Approach of none other than "Cash to Cap".

 

So if the NFL is now going to this Basis...how is this going to screw our Beloved Buffalo Bills? I honestly think this makes the Free Agency Market more competitive because you wont have teams like Washington and Dallas throwing out ridiculous signing bonuses to multiple free agents to bring them in because they can hide that money later on down the line.

 

But as I stated before, Flame On!!!

The point some are making is that the cap floor has increased meaning the Bills will be forced to spend more.

[SRQ_BillsFan]

I thought I read somewhere that there has been a floor in the past. It had been increasing about 2% a year and was at 87-88% anyway? Not sure where I read it, but it was right after this 90% thing surfaced.

[Ghost of Rob Johnson]

I thought I read somewhere that there has been a floor in the past. It had been increasing about 2% a year and was at 87-88% anyway? Not sure where I read it, but it was right after this 90% thing surfaced.

Both the cap and the floor were adjusted annually based on the league's revenues, and they increased each year. In 2009, the final capped year under the current CBA, the cap was $128 million per team, while the floor was 87.6% of the cap. Using the formula provided in the league's collective bargaining agreement, the floor in 2009 was $112.1 million. The salary floor percentage would have increased 1.2% per year until it reached 90% of the cap in 2011.

 

http://en.wikipedia.org/wiki/Salary_cap#Salary_cap_in_the_NFL

 

A big part of reaching the cap floor for alot of teams is the use of "dead money" however. Not sure if the players were trying to get rid of the use of that in the cap calculation.

Edited July 19, 2011 by Ghost of Rob Johnson

[Mark Long Beach]

Actually we were right in the middle of the pack for actual cash spending. Cash to cap spending means we didn't play a lot of fancy accounting games vs the cap. Reaching the minimum spending cap will involve no new strategies or unusual expenditures as we didn't carry "dead money".

[rsxfirefighter]

go figure...after I post this question which has been bugging me for weeks...the buffalo news runs an article with key information..

 

By my calculations we have been spending between 88-92% cash to cap the past three cap years...so therefore we will be spending about the same as usual if the floor remains at 90%....

 

so in theory we will not be affected at all by this new cba....but actually be helped out by not allowing the ”magical” accounting by the big spenders out there....

[Ramius]

From what i have been reading, the salary cap floor withh be 90%, but the amount of cash spent by each team must be at or near 100% of the cap. As far as i know, Danny boy in washington can still spend over the cap in actual cash.

 

Buffalo wont necessarily go on a spending spree, because they can simply front load new contracts to meet the cash lower limit in any given year. Plus, we need to extend Stevie, Fitz, etc.

[NoSaint]

http://en.wikipedia.org/wiki/Salary_cap#Salary_cap_in_the_NFL

 

A big part of reaching the cap floor for alot of teams is the use of "dead money" however. Not sure if the players were trying to get rid of the use of that in the cap calculation.

Dead money might shuffle hits around creatively but it's still money that was spent. If its 5m this year and 5 next or 10m this year it's still not saving you money spent.

[BobbyC81]

go figure...after I post this question which has been bugging me for weeks...the buffalo news runs an article with key information..

 

By my calculations we have been spending between 88-92% cash to cap the past three cap years...so therefore we will be spending about the same as usual if the floor remains at 90%....

 

so in theory we will not be affected at all by this new cba....but actually be helped out by not allowing the ”magical” accounting by the big spenders out there....

 

So, is what they're saying that if you sign a player say to a 5-year contract at $5 Mil per with a $5 Mil signing bonus, you count $10 Mil to this year's cap??

 

Whereas, in the past, the $5 Mil would be spread over the 5 years at $1 Mil per?

[Ramius]

So, is what they're saying that if you sign a player say to a 5-year contract at $5 Mil per with a $5 Mil signing bonus, you count $10 Mil to this year's cap??

 

Whereas, in the past, the $5 Mil would be spread over the 5 years at $1 Mil per?

 

For salary cap purposes, the 5 mil is still spread over the 5 years. For cash purposes, it counts towards this year. Think of it as almost having 2 limits. A 90% lower limit (with a ceiling) for the salary cap, as it used to be. But now, there's a lower limit for the amount of cash a team must spend. Previously, teams could be near the cap without spending a lot of cash.

 

So if the numbers out there are correct, each team must be between $108-120 million in salary cap dollars, but your books for 2011 must show that you spent at least $120 million in actual cash paid out to players during that calendar year, regardless of your cap figure.

[Peter]

Have any of you heard anything about what is likely to be agreed to regarding revenue sharing?

 

As far as the Bills (and othe small market teams are concerned) that issue is as important (if not more important) than any other.

 

 

[NoSaint]

For salary cap purposes, the 5 mil is still spread over the 5 years. For cash purposes, it counts towards this year. Think of it as almost having 2 limits. A 90% lower limit (with a ceiling) for the salary cap, as it used to be. But now, there's a lower limit for the amount of cash a team must spend. Previously, teams could be near the cap without spending a lot of cash.

 

So if the numbers out there are correct, each team must be between $108-120 million in salary cap dollars, but your books for 2011 must show that you spent at least $120 million in actual cash paid out to players during that calendar year, regardless of your cap figure.

 

 

right, and my point was that over a couple years that evens out. the dead space means you were over spending in year one cash wise, but slightly under spending the next 5. over a decade, you arent getting out magically waaaay ahead. its two different ways to account for the same dollars, spent, one giving you an extra spending cushion in the current year, in exchange for less in the future.

 

10M this year, or 2M for 5 years has the same dollar and cents expenditure as far as percentage of cap spent over that 5 year window. the bills count it in year one and can/must spend extra the next 4 years.

Edited July 19, 2011 by NoSaint

[San Jose Bills Fan]

Have any of you heard anything about what is likely to be agreed to regarding revenue sharing?

 

As far as the Bills (and othe small market teams are concerned) that issue is as important (if not more important) than any other.

 

 

Good question. Haven't heard a single thing about the so-called Supplemental Revenue Sharing system.

 

You're right.

 

It's very important because without it, the Bills might spend around 60% of revenues on player compensation while a big revenue team might spend 30% of revenues on player compensation.

 

[rsxfirefighter]

From what I just read:

 

Cap is $120 Million.

Minimum Cash per year spent is 90% of Cap (~$108 Million)

The additional $12 Million will account for "Dead" Money and any extra the team wants to spend in Cash that year.

 

Teams wont spend $150+ Million in cash in a given year, because it creates too much float money rolling over towards the next year cap. Which wouldnt give them enough room to spend the 90% Cash to Cap. Therefore they would have to restructure current players deals to give them bonus (IE guaranteed salary) and reduce their yearly salary to make up the Cash to Cap portion. This is rather a smart move on players who dont have guaranteed contracts to find a way to get more money guaranteed in the future by making teams more tempted to renegotiate contracts with players to move money around.