San Jose Bills Fan Posted January 8, 2014 Share Posted January 8, 2014 Again, it would be nice to see profit figures as opposed to revenue figures. Link to comment Share on other sites More sharing options...
Dibs Posted January 8, 2014 Share Posted January 8, 2014 Again, it would be nice to see profit figures as opposed to revenue figures. For 2012: http://www.thepostgame.com/blog/dish/201308/only-one-nfl-team-lost-money-2012 Link to comment Share on other sites More sharing options...
BADOLBILZ Posted January 8, 2014 Share Posted January 8, 2014 Though I don't believe OldTimer1960 is correct in his belief that the Bills(and small market teams) struggle to be able to afford the cap(which I'll explain me reasons why at the end).......he has highlighted an issue which clearly places the small market teams at a disadvantage.....and potentially a great disadvantage. Though OldTimer1960 has gone through the issue......I feel many did not fully understand the point he was making. The Salary Cap is determined by the total of all of the revenue(AR) every team makes......which is then divided by a certain percentage(roughly 47%).....and then divided by 32(the number of teams). Shared Revenue for each team is however based upon a lesser amount. Essentially only the TV rites, ticket sales & NFL merchandise gets divided equally amongst the 32 teams. The monies any particular team makes from luxury boxes, advertising, naming rites etc goes directly to them......and 47% of the amount, divided by 32, is added to each teams cap. Question 1.2 in the link explains it better.... http://www.askthecom...aryCap/faq.aspx A simplistic example: If the top 5 teams each earn an extra $136m which isn't revenue shared........the cap increases by $10m per team [(136x5x0.47)/32 = 10].....but the other 27 teams don't have the extra revenue to pay for it. Those top 5 teams are better off by $126m each while the other 27 teams are worse off by $10m each. To put things another way......because the Cowboys can make a bigger profit, the Bills have to pay their players more money(without getting additional funding to do so). I personally don't believe that it is an issue at this point in time because quite frankly I don't believe the profit figures given out each year by the NFL teams are an accurate reflection of their profits. For tax reasons, it is always in the best interest for private businesses to show as little profit as possible......and that is exactly what I believe the NFL teams do. Other reasons that I see are......it is illogical for a billion dollar company to maintain viability if they are only slightly above the break even point each year......and if things were indeed as tight as the figures show, there would be a greater emphasis from the small market teams to garner revenue. (Ralph Wilson Stadium would be too much of a luxury to afford not to sell the naming rights if the team was making virtually no profits). The only real effect that I see in today's NFL is that the smaller market teams might not have enough cash on hand to be able to pay multiple Signing Bonuses in the one year.......where the big market teams obviously have plenty of cash on hand to do this. I believe that this is why most teams follow a rough Cash to Cap system. It might be possible in the future that the AR becomes so much higher than the shared revenue that the small market teams actually will be struggling to pay the cap......but the massive increase in revenue for the new TV deals(coming in 2015) have me doubtful that this will be the case any time soon. No disagreement there. And like I said.......that advantage wrt immediate access to signing bonus money is insignificant. Link to comment Share on other sites More sharing options...
TXBILLSFAN Posted January 8, 2014 Share Posted January 8, 2014 (edited) So, let me try and summarize the points made by Dibs and Old Timer --- The Bills can't afford to spend to the cap since they don't have the same revenues as the larger market team --- am I correct ? --- and this is probably the same reason we consistently see them under spending to the CAP, why they need to ship a home game to Toronto each year and why we always go cheap with coaches --- what I think and others on this board THINK is that they should spend to win and make that a priority -- if they start to win, they will be able to generate more revenue and mitigate any losses or even turn profit ---- said another way, the Bills think SMALL --- look no further than Green Bay if you want a lesson in maximizing a small market --- and Brandon self professes himself to be a marketing genius --- UGH Edited January 8, 2014 by TXBILLSFAN Link to comment Share on other sites More sharing options...
BADOLBILZ Posted January 8, 2014 Share Posted January 8, 2014 So, let me try and summarize the points made by Dibs and Old Timer --- The Bills can't afford to spend to the cap since they don't have the same revenues as the larger market team --- am I correct ? --- and this is probably the same reason we consistently see them under spending to the CAP, why they need to ship a home game to Toronto each year and why we always go cheap with coaches --- what I think and others on this board THINK is that they should spend to win and make that a priority -- if they start to win, they will be able to generate more revenue and mitigate any losses or even turn profit ---- No, that is not what he said. At the risk of agreeing with me.........Dibs basically just repeated what i said. The Bills are very capable of paying to the cap. They do make less money than some of the larger teams......but it makes no more than a whisker's difference in their ability to spend to the cap. And I will add this.......though the Bills only made about $12M last year,.... throughout most of the last 12 years they have been in the top half of the league in profitability. As I mentioned upthread.....the team had an AVERAGE operationg income over the last 12 years of just under $30M. Link to comment Share on other sites More sharing options...
TXBILLSFAN Posted January 8, 2014 Share Posted January 8, 2014 No, that is not what he said. At the risk of agreeing with me.........Dibs basically just repeated what i said. The Bills are very capable of paying to the cap. They do make less money than some of the larger teams......but it makes no more than a whisker's difference in their ability to spend to the cap. And I will add this.......though the Bills only made about $12M last year,.... throughout most of the last 12 years they have been in the top half of the league in profitability. As I mentioned upthread.....the team had an AVERAGE operationg income over the last 12 years of just under $30M. So, are we back to square one in the thread -- "why don't the Bills spend to the cap ?" Link to comment Share on other sites More sharing options...
San Jose Bills Fan Posted January 8, 2014 Share Posted January 8, 2014 For 2012: http://www.thepostga...lost-money-2012 Thanks Dibs. Link to comment Share on other sites More sharing options...
Sisyphean Bills Posted January 8, 2014 Share Posted January 8, 2014 Since the title of this thread is "cap management" and not "who makes the most cheese", this link might be interesting. https://nflplayers.com/reports/RunPublicReport.aspx?report=top51 Link to comment Share on other sites More sharing options...
BADOLBILZ Posted January 8, 2014 Share Posted January 8, 2014 So, are we back to square one in the thread -- "why don't the Bills spend to the cap ?" Why they don't is less important in this thread than the fact that they don't have to. Hence the reason why the 89% rule was put in place. To force teams to spend rather than pocket that money. The players want it and the league wants it because they want competitive balance. Link to comment Share on other sites More sharing options...
Dibs Posted January 8, 2014 Share Posted January 8, 2014 (edited) So, are we back to square one in the thread -- "why don't the Bills spend to the cap ?" Why did none of the NFL teams spend to the cap? (See Sisyphean Bills' link above). The cap is exactly what the word "cap" means. It is a maximum level that a team is allowed to spend to. Due to the nature of this.....and the penalties involved in going over the cap.....all teams will generally leave some room under the cap to cover unforeseen situations. The question really is "why don't the Bills spend closer to the cap?". As I don't know the actual numbers of the past.....one can only look at the current CBA rules to determine why. If the cap is allowed to be re-rolled(debated in this thread)......it makes no difference at all for a team to not spend in any given year as the money will continually roll forward, creating a bigger and bigger number for teams to spend. It would seem logical that under this situation, teams will eventually spend the excess money from previous years when they are in the situation where they feel it warranted. Where they feel it warranted. This to me is a vital aspect in spending to the cap. Though it should never be used as an excuse(which I'm sure was done in the past by certain teams(Bills?), there shouldn't be an insistence IMO for a team to always spend close to the maximum. Cap planning is a very complex system. Spending all of your money today(simply because it is there) will often preclude the spending of money tomorrow in areas deemed to be of better value. Teams need to look at their active contracts for future years as well as the projected cap figures for future years before they commit signing a player. As an example, the Bills active roster spend for 2013 is $90m. Their active roster spend for 2014 is already $102m and doesn't include Byrd or new rookies. The cap increase from 2013 to 2014 looks to be only $3m. Spending the extra monies in 2013(rather than letting it roll over into 2014) would drastically alter the cap situation in 2014. I see no problem with the Bills looking ahead, realizing that they might want to extend Dareus, Spiller, A.Williams & Hughes.....and have some money left to sign a big FA if the right one becomes available(Graham?)......and deciding not to spend all of the free money they had(to make this possible). Mind you, the 2015 cap is looking to be a great deal higher than 2014......so if the Bills don't take advantage of the great setup they have created for the 2014 year(a buyers market for FAs) & instead they let things ride through to the 2015 season, I will be very negative towards them in regards to cap management. Regardless of whether a team can re-roll rollover money or not, it seems clear(due to base rollover and 4 year cap minimums) that the new CBA has taken into account these concepts. It readily allows for the concept that not all years are the same for a team regarding their cap(and future cap) situation.....and while still enforcing a minimum spend, allows a much greater leeway for cap management. Edited January 8, 2014 by Dibs Link to comment Share on other sites More sharing options...
808 Posted January 8, 2014 Share Posted January 8, 2014 Do you have a source for this information? That seems pretty high. So I just checked the Forbes 400 Richest Americans. The 400th Richest American is worth $1.3 billion. Ralph Wilson is not anywhere on the list. http://www.forbes.co...:All categories ill try and look for it again. i could be totally wrong but I'm pretty sure it was out there a a year or 2 ago. ill look around. Link to comment Share on other sites More sharing options...
TXBILLSFAN Posted January 8, 2014 Share Posted January 8, 2014 Why did none of the NFL teams spend to the cap? (See Sisyphean Bills' link above). The cap is exactly what the word "cap" means. It is a maximum level that a team is allowed to spend to. Due to the nature of this.....and the penalties involved in going over the cap.....all teams will generally leave some room under the cap to cover unforeseen situations. The question really is "why don't the Bills spend closer to the cap?". As I don't know the actual numbers of the past.....one can only look at the current CBA rules to determine why. If the cap is allowed to be re-rolled(debated in this thread)......it makes no difference at all for a team to not spend in any given year as the money will continually roll forward, creating a bigger and bigger number for teams to spend. It would seem logical that under this situation, teams will eventually spend the excess money from previous years when they are in the situation where they feel it warranted. Where they feel it warranted. This to me is a vital aspect in spending to the cap. Though it should never be used as an excuse(which I'm sure was done in the past by certain teams(Bills?), there shouldn't be an insistence IMO for a team to always spend close to the maximum. Cap planning is a very complex system. Spending all of your money today(simply because it is there) will often preclude the spending of money tomorrow in areas deemed to be of better value. Teams need to look at their active contracts for future years as well as the projected cap figures for future years before they commit signing a player. As an example, the Bills active roster spend for 2013 is $90m. Their active roster spend for 2014 is already $102m and doesn't include Byrd or new rookies. The cap increase from 2013 to 2014 looks to be only $3m. Spending the extra monies in 2013(rather than letting it roll over into 2014) would drastically alter the cap situation in 2014. I see no problem with the Bills looking ahead, realizing that they might want to extend Dareus, Spiller, A.Williams & Hughes.....and have some money left to sign a big FA if the right one becomes available(Graham?)......and deciding not to spend all of the free money they had(to make this possible). Mind you, the 2015 cap is looking to be a great deal higher than 2014......so if the Bills don't take advantage of the great setup they have created for the 2014 year(a buyers market for FAs) & instead they let things ride through to the 2015 season, I will be very negative towards them in regards to cap management. Regardless of whether a team can re-roll rollover money or not, it seems clear(due to base rollover and 4 year cap minimums) that the new CBA has taken into account these concepts. It readily allows for the concept that not all years are the same for a team regarding their cap(and future cap) situation.....and while still enforcing a minimum spend, allows a much greater leeway for cap management. Agree on the semantics, "why don't the Bills spend closer to the cap" is the question --- they will always want to leave a few million just in case, got it. ---- the new CBA does allow rollovers, it is not clear if they allow re-rollovers, but, within the 4-year period where teams must spend to a floor it becomes somewhat irrelevant ---- however, spending to 89% of cap vs. 98 or 99% is significant when the cap is in the $120M+ range -- we are talking $12M/year in lost opportunity to improve the team --- as far as when to spend to retain guys, I think if Bills strategy is to wait and use rollover monies vs. restructuring contracts of existing players to move cap dollars around, I'd prefer the former, however, that's an easy answer to a questions that never is asked by media --- in other words, Brandon could say, we are under spending the cap in 2013 to ensure we have extra money in 2014 to extend Dareus, A Williams, Spiller and Hughes ---- he could also say during year end presser that "the Bills are committed to spend as close to the cap as possible to ensure we have the best players on the field" --- he could also say that "we didn't sign Levitre because we wanted to save 2013/2014 and 2015 monies to extend Wood and Glenn" etc. etc ----- these questions that we are debating are on a lot of fans minds -- a lot of people I talk to feel that the Bills are not willing to maximize their financial spending to build a winner --- and before everybody brings up Mario, the year he was signed the Bills were under the cap by almost $10M (2012), in 2011 (over $20M)---- this is where the words spoken don't match the actions ---- and this is where media and fans should be questioning and probing --- the guys in this FO do not deserve the benefit of the doubt --- BTW, great post --- Link to comment Share on other sites More sharing options...
GunnerBill Posted January 8, 2014 Share Posted January 8, 2014 (edited) I don't think it would be wise for Russ Brandon or Doug Whaley to get into specifics about their plans regarding future extensions for certain players it would give the agents of those players a certain amount of power in the negotiations if they know that the team has used keeping those players on improved contracts as a reason for their cap management strategy. Therefore I think what you get from the FO is more ambiguous statements about the cap being something that you can't approach just looking from year to year and that you have to have one eye down the road in terms of keeping your good players and that the team is looking to draft good players and then keep those players. I know that can be frustrating for fans and leaves huge unanswered questions about the plan and the strategy that lead to threads like this.... however, for me getting into specifics of the cap management plan in public is a little akin to Doug Marrone publishing his play book on the website every Friday (I bet it contains a lot of first down running plays ). That's just the way it is in pro-sports. Maybe they could improve in explaining things after they are done though. So for example if we extend Aaron Williams and Jerry Hughes and CJ Spiller then maybe it would be helpful for the FO to say "listen this was part of our plan and that's why we managed the cap in the way we did last year".... whether people would believe them or think that was just a convenient excuse is, however, another question. Edited January 8, 2014 by GunnerBill Link to comment Share on other sites More sharing options...
Sisyphean Bills Posted January 8, 2014 Share Posted January 8, 2014 In the link I posted above, the Bills had the 2nd largest amount of unspent cap, had the 8th largest rollover from the previous year, and had the 4th smallest cap (only Washington, Dallas, and Miami had less room). They are also on the low end of number of contracts. I think someone could use those numbers to form an argument on the relative quality of cap management. Link to comment Share on other sites More sharing options...
TXBILLSFAN Posted January 8, 2014 Share Posted January 8, 2014 I don't think it would be wise for Russ Brandon or Doug Whaley to get into specifics about their plans regarding future extensions for certain players it would give the agents of those players a certain amount of power in the negotiations if they know that the team has used keeping those players on improved contracts as a reason for their cap management strategy. Therefore I think what you get from the FO is more ambiguous statements about the cap being something that you can't approach just looking from year to year and that you have to have one eye down the road in terms of keeping your good players and that the team is looking to draft good players and then keep those players. I know that can be frustrating for fans and leaves huge unanswered questions about the plan and the strategy that lead to threads like this.... however, for me getting into specifics of the cap management plan in public is a little akin to Doug Marrone publishing his play book on the website every Friday (I bet it contains a lot of first down running plays ). That's just the way it is in pro-sports. Maybe they could improve in explaining things after they are done though. So for example if we extend Aaron Williams and Jerry Hughes and CJ Spiller then maybe it would be helpful for the FO to say "listen this was part of our plan and that's why we managed the cap in the way we did last year".... whether people would believe them or think that was just a convenient excuse is, however, another question. Agree that I wouldn't expect them to mention specific names or numbers --- but, it's no secret to the other NFL teams or agents, if we can google the cap and contracts they certainly can ---so, we all know Dareus, A Williams, Spiller and Highes expire after 2014 --- and those guys all had good years ---- my biggest issue is that the words / statements Brandon has made do not match the actions ---- maybe 2014 will be different and we'll have a year when the Bills are aggressive at resigning and signing and spend close to the cap ---- I just don't see it happening based on past actions --- Link to comment Share on other sites More sharing options...
GG Posted January 8, 2014 Share Posted January 8, 2014 In the link I posted above, the Bills had the 2nd largest amount of unspent cap, had the 8th largest rollover from the previous year, and had the 4th smallest cap (only Washington, Dallas, and Miami had less room). They are also on the low end of number of contracts. I think someone could use those numbers to form an argument on the relative quality of cap management. The new CBA did not change the fundamental operation of Ralph Wilson Enterprises - Buffalo Bills will not spend cash above the cap. The cap discussions almost always ignore the difference between cash spending and cap spending, which is not the cash amount. Any team that lives under the cash to cap regime will always be at the lower end of salary caps. One thing I don't understand about some of the cap analyses, is why wouldn't a team perpetually roll over unused cap space, since it looks to be a free option? Link to comment Share on other sites More sharing options...
TXBILLSFAN Posted January 8, 2014 Share Posted January 8, 2014 The new CBA did not change the fundamental operation of Ralph Wilson Enterprises - Buffalo Bills will not spend cash above the cap. The cap discussions almost always ignore the difference between cash spending and cap spending, which is not the cash amount. Any team that lives under the cash to cap regime will always be at the lower end of salary caps. One thing I don't understand about some of the cap analyses, is why wouldn't a team perpetually roll over unused cap space, since it looks to be a free option? Only reason I can think of is the PR implications --- for 2012 to 2013 there were implications on spending to the floor, since floor is a 4-year average 2013-2017, but after 2013, I can't think of a CBA or financial reason Link to comment Share on other sites More sharing options...
ICanSleepWhenI'mDead Posted January 8, 2014 Share Posted January 8, 2014 In the link I posted above, the Bills had the 2nd largest amount of unspent cap, had the 8th largest rollover from the previous year, and had the 4th smallest cap (only Washington, Dallas, and Miami had less room). They are also on the low end of number of contracts. I think someone could use those numbers to form an argument on the relative quality of cap management. Just food for thought - - Let's say you're a gazillionaire planning to bid on some NFL franchise when it comes up for auction. Which situation would make you bid higher: 1. Team spends close to the maximum allowable salary cap figure every year, giving it the best possible mix of players (in the current GM's opinion) and probably a better recent W/L record; or 2. Team spends as close to the salary cap floor as PR considerations allow (and maybe even significantly underspends the cap in the first 2 years just before the auction), simultaneously giving the prospective new owner (i) the obligation to spend more heavily than most other owners in the last 2 years of the 4 year period to meet the 89% floor requirement, and (ii) the ability to let his new GM reshape the roster more quickly to that new owner's and/or new GM's satisfaction by using the wad of cash the team saved in the 2 years before the auction . I can see how various gazillionaires might differ about which approach they would prefer before the auction. We as fans would prefer option #1. Maybe egotistical types like Jerry Jones and Dan Snyder would prefer option #2. Actual policy determined by what Littman thinks future bidders prefer. Link to comment Share on other sites More sharing options...
Dibs Posted January 9, 2014 Share Posted January 9, 2014 ..... One thing I don't understand about some of the cap analyses, is why wouldn't a team perpetually roll over unused cap space, since it looks to be a free option? I assume that every team will always carry over their maximum amount. To not do so would be tantamount to waving a big flag and yelling "Look at me! Many of you assumed I was cheap......now I've proven it." I think everybody has been discussing things under the same assumption that the max roll will always be rolled. So far there has been no suggestion that this will not happen. Link to comment Share on other sites More sharing options...
Dibs Posted January 9, 2014 Share Posted January 9, 2014 (edited) In the link I posted above, the Bills had the 2nd largest amount of unspent cap, had the 8th largest rollover from the previous year, and had the 4th smallest cap (only Washington, Dallas, and Miami had less room). They are also on the low end of number of contracts. I think someone could use those numbers to form an argument on the relative quality of cap management. Though nobody has actually used the ranking numbers you listed, plenty have made argument on the overall numbers to suggest poor management and a generally cheap attitude from the Bills. Though understandable that people see these numbers and feel "Ugh, the Bills are cheap!", it is a very insular way to look at the current situation. The questions that would need to be asked are.... Who do you spend the money on? What effect does the spending have on future cap management? Assuming non re-roll(re-rolling would effectively make all arguments moot as the money will be there to spend when there are appropriate players to spend it on....Glenn, Kiko, Dareus etc).... ....the signing of just one extra decent contract this year would have sent the 2014 cap into trouble. The most appropriate and easiest example would be if the Bills matched the Titans contract on Levitre. Using figures as they stand now, this would have dropped the cap space for 2014 by $13.2m......going from $19m down to $5.8m. (I'll show more detailed numbers if people want.....though I have done so many times prior). How do we then sign Byrd or rework A.Williams, Dareus, Spiller, Hughes....or go after a top FA? The Bills may well be cheap and regularly mismanage their cap.......but this isn't the season to try and show it IMO. Edited January 9, 2014 by Dibs Link to comment Share on other sites More sharing options...
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