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Ennjay

Help Me Out With A Dead Money Explanation

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Why does Dareus count so much?  Is that the difference between his total cap-assigned numbers for his years with the Bills and what he was actually payed, and the trade accelerates that into the next league year?

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22 minutes ago, Boatdrinks said:

I believe it is due to bonus $$ already paid out. Trading the player doesn't get the team off the hook for all of the bonus. 

 

This in a nutshell.  Based on the timing of when he was traded, a portion of the dead money related to the bonus applied last year and the remainder applies this year.  

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27 minutes ago, Marv's Neighbor said:

We're paying dead money for a lot of dead as*es who aren't here anymore.  Dareus comes to mind.

no more $100M deals to d lineman!

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1 minute ago, LABILLBACKER said:

no more $100M deals to d lineman!

Depends on the lineman. 

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1 hour ago, Marv's Neighbor said:

We're paying dead money for a lot of dead as*es who aren't here anymore.  Dareus comes to mind.

 

Yep.

 

Short term it actually looks bad on paper, as we are on the hook $14.2mil dead cap in 2018 to him, while only saving $2.3 on the cap.

 

After 2018 though, he's gone from our books for good.

He would have had a $11.6mil cap hit in 2019, and it increases from there.

It is a win after 2018 for long term cap flexibility.

 

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Yes, as others have said, his dead cap number has to do with the actual dollars already paid out to him. 

 

IIRC he got a $25 million signing bonus that was paid out at the time he signed his new contract. 

 

The Bills paid out something like $40 or $50M to him between 2015 and 2017, but they had spread that signing bonus amount (as well as any other bonuses he received) out over the life of the contract.

 

But now that he's cut all that money that was going to be spread out over the the next 4-5 years has to be accounted for. 

8 minutes ago, SouthNYfan said:

 

Yep.

 

Short term it actually looks bad on paper, as we are on the hook $14.2mil dead cap in 2018 to him, while only saving $2.3 on the cap.

 

After 2018 though, he's gone from our books for good.

He would have had a $11.6mil cap hit in 2019, and it increases from there.

It is a win after 2018 for long term cap flexibility.

 

Yep, as bad as the dead cap is this year, the Bills still saved something like $50+ million over the next few years. 

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13 minutes ago, BillsFan4 said:

Yes, as others have said, his dead cap number has to do with the actual dollars already paid out to him. 

 

IIRC he got a $25 million signing bonus that was paid out at the time he signed his new contract. 

 

The Bills paid out something like $40 or $50M to him between 2015 and 2017, but they had spread that signing bonus amount (as well as any other bonuses he received) out over the life of the contract.

 

But now that he's cut all that money that was going to be spread out over the the next 4-5 years has to be accounted for. 

Yep, as bad as the dead cap is this year, the Bills still saved something like $50+ million over the next few years. 

 

Well said.

 

So as an example, if we say Dareus got a $25 million signing bonus, Dareus gets all of that bonus right up front when he signs the contract, but the Bills get to spread it out over the life of the contract. I don't recall, but let's say the contract was for 5 years. So the Bills get to average that out and count $5 million of that bonus against the cap for each of the 5 years of the contract.

 

If Dareus is cut or traded before the end of the 5 year contract, all of the bonus money still needs to be accounted for. Dareus already received the whole sum ($25 million) up front, but all of it needs to be accounted for in the cap. Let's say in this instance Dareus is traded after the 3rd year of the 5-year contract. That means the bonus that was supposed to be spread out over years 4 and 5 of the contract ($5 million each year, or $10 million total) automatically get lumped onto the Bills cap for the following year (in this case, year 4, the year after he leaves).

 

So that's considered dead money -- here, $10 million of the Bills cap counting towards someone who is no longer on the roster. On the bright side, we don't have to count his salary against the cap anymore, so there are some overall cap savings over time.

 

(The exact numbers are different, of course, I just don't know the details.)

Edited by Rubes
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Signing a player to a long contract with a big bonus is a risky proposition.  If you cut him, you have to absorb the cap impact of that bonus in one or two years (one year if the player is cut before June 1st-two years if cut after June 1st) rather than the cap impact being prorated over the life of the contract.

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1 hour ago, jr1 said:

his agent is a genius 

No Jim Overdorf was an idiot including a clause not holding Darius liable he had repeated issue with drugs again.

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7 hours ago, LABILLBACKER said:

no more $100M deals to d lineman!

Question. How many players who get those kind of FA deals actually play up to their contacts?

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21 hours ago, Ennjay said:

Why does Dareus count so much?  Is that the difference between his total cap-assigned numbers for his years with the Bills and what he was actually payed, and the trade accelerates that into the next league year?

 

Not quite.  It divides into several parts. 

 

When a player is signed, one of the "clever cap tricks" is that any signing bonus paid can be divided up (prorated or amortized) over the length of the contract.

So when Dareus was signed in 2015,  he received a $25M signing bonus that was divided up across 5 years.  There was $10M left of this amount for 2018 and 2019.

 

He may also have an "option" in the contract where if the team retains him past the option date, another bonus triggers - for Dareus, he had a $7M option come due in 2016.  This also gets divided up over the remaining length of the contract.  There was $4.2M of this amount for 2018 and 2019.

 

The key thing to remember is that when a player goes off a team's roster (whether cut, traded, or injured), all the remaining years become payable in that year (if before June 1) or the next year (if after June 1).

 

In addition, Dareus was owed $5M of guaranteed salary for 2018.

 

So if Dareus had been cut, and no other team signed him, the Bills would have had $10M + 4.3M + 5M against their cap = $19.3M

But since he was traded, and the Jags are paying him, they get his guaranteed salary and we just get the cap hit from the roster and option bonus.

 

While we're on the subject, I'd like to address the famous "post June 1" cut which so many love to bring up after clicking buttons on Spotrac or Overthecap.

It's not the panacea folks like to make it out to be.  First of all, it can only be designated for 2 players per year.  Second, it comes with a big "Gotcha"

 

The Gotcha is if you designate a player as a post-June 1 cut, his pre-cut cap hit counts against the cap UNTIL JUNE 1.  Let's take Tyrod Taylor as an example.

He counts $18M against the cap due to salary and pro-rated bonuses.  If we cut him (and someone else signs him and pays him at least $1M), we take on $7.6M of dead cap.  People get all excited that's even lower if he's "post-June 1", but the problem is - if it's post June 1, his current $18M cap hit counts against the cap until June 1, preventing the cap space from being used to sign or extend other players.

 

 

 

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