Cash to the Cap explained by Chris Brown

[MadBuffaloDisease]

Ralph voted AGAINST having the salary cap based on total revenue AND giving the players a much higher percentage. Hence the reason he's asking for his money back. It's funny that the owners were so gung-ho to give the money to the players, yet squabble over giving it to their fellow owners.

 

Ralph's also PO'd that league money went towards building these new stadiums (all of which, except for Snyder's and Kraft's, were paid for by their counties) that drive-up his cap without him seeing extra money from it.

[Dibs]

This may all be true but it is still a weak excuse for not spending on free agency and letting our best players walk. Ralph most likely will make anywhere from $40-60m this year, and it is tough to swallow seeing Clements walk. For every dollar in unshared revenue made by a team like the Skins, the salary cap goes up $.02 for the Bills. It is a weak excuse for not signing players. As much as Snyder is villified, the guy paid $800m for that team, so it hard to get mad if he makes more money. Yes, unshared revenues should not be included in the salary cap calculation, but it is a poor reason for crying poor and not spending on players.

Clements walking may be a good thing for the team if we spend the money elsewhere.

Your .02 cents is correct. Lets say 10 big market teams make an extra $100mil each. That will put up the cap $20mil. Which means they have operational profits of +$80mil each. If the Bills can only generate $10mil in 'extra' money, they will be out of pocket $10mil. And the figures just go up each year.

 

It's not a matter of making more money.....it's a matter of over time making less & less profits in comparison to your capitol(percentage).

[Dibs]

Ralph's also PO'd that league money went towards building these new stadiums (all of which, except for Snyder's and Kraft's, were paid for by their counties) that drive-up his cap without him seeing extra money from it.

I didn't realize this bit.

[Kelly the Dog]

It is not a handout. Money is being taken (at a greater rate each year) from RWs pocket & he wants to stop it. There is no way that can be considered a handout.

It doesn't negate an argument about him actually spending the money.....it doesn't negate any argument to do with an over-all picture.

The reality is that with the increase in populations....therefore increase in 'extra' money, the bigger markets will increase the cap so that each year the operating profit percentages will increase the most for the biggest markets & will actually decrease for the smaller markets(& decrease the most for the smallest).

That is what the Bills face under this CBA.......smaller profit percentages each year.

RW owes it to the fans to rock the boat. You may disagree with how he is doing it but surely you can't disagree that it needs to be rocked.

 

You mentioned loans & upkeep & stadiums. It all comes back to profit percentage.....regardless of size.

 

People surely can't be wanting RW to just shut up & have the Bills slowly diminish till they have to move. At some point a low enough profit percentage is going to mean just that. In the end, it is a business, & it needs to make a reasonable profit for the capitol involved.

He's going to be getting back (6 million a year which goes up to 11 million a year) from the handout, more than the amount taken from his pocket, especially considering the new economic bracket. And again, the millions he is losing (or just allegedly or potentially losing) is simply deducting from the multi millions he is making in profit and NOT preventing him from paying any free agents he wants to pay. That's what this whole argument is about. The Bills in those Forbes ratings were 31st in market size, 25th in revenue and 13th in operating income. The Bills profit percentage is amongst the very best in the league. The only problem is IF he sells the team to someone other than his family, AND they take out enormous loans for the cash to buy the team and then have to pay off those loans where the interest will be several million a year. That's likely years down the line and a new contract will likely be in place. He has no financial problems now whatsoever.

[Kelly the Dog]

Ralph voted AGAINST having the salary cap based on total revenue AND giving the players a much higher percentage. Hence the reason he's asking for his money back. It's funny that the owners were so gung-ho to give the money to the players, yet squabble over giving it to their fellow owners.

 

Ralph's also PO'd that league money went towards building these new stadiums (all of which, except for Snyder's and Kraft's, were paid for by their counties) that drive-up his cap without him seeing extra money from it.

Both are true, and good points.

[Kelly the Dog]

Lets say 10 big market teams make an extra $100mil each. That will put up the cap $20mil. Which means they have operational profits of +$80mil each. If the Bills can only generate $10mil in 'extra' money, they will be out of pocket $10mil. And the figures just go up each year.

 

It's not a matter of making more money.....it's a matter of over time making less & less profits in comparison to your capitol(percentage).

They don't. Right now, only one does, the Skins.

[Dibs]

Both are true, and good points.

You realize that the first point was the only point that I have been trying to make to you?

[Kelly the Dog]

You realize that the first point was the only point that I have been trying to make to you?

The point he made that was good was that the owners had an easier time giving the money to the players than each other. I didn't see you make that point, perhaps you did. The other part of that first sentence, the point you have been making, is obvious and has been debated here since it first came out.

[I 90]

Thanks to all for the Ralph poverty update and its varied nuances. Is it really his intention to make his team play by a separate set of rules ?

 

I understand that Chris Brown's original explanation of adding in signing bonuses to reach a "cash to cap" number is nonsensical if one wants to reach a true NFL cap number. The Joe F modification, amortizing bonuses, (tiering them at least in the mind of One Bills Drive) gives one hope but still leaves us with a true cap number. And that number must be at least 93 million.

 

Who is this "cash to cap" song and dance for ? Is it a gutless way of saying "we will spend the absolute minimum using our own peculiar scheme" ? Is this how the Bengals and Cardinals use to sell it ? Forget what it says to fans and ticket buyers and think what it might mean to players and agents. Differences in cap space are a design to redistribute talent and foster parity -- "cash to cap" posturing negates it.

[obie_wan]

He's going to be getting back (6 million a year which goes up to 11 million a year) from the handout, more than the amount taken from his pocket, especially considering the new economic bracket. And again, the millions he is losing (or just allegedly or potentially losing) is simply deducting from the multi millions he is making in profit and NOT preventing him from paying any free agents he wants to pay. That's what this whole argument is about. The Bills in those Forbes ratings were 31st in market size, 25th in revenue and 13th in operating income. The Bills profit percentage is amongst the very best in the league. The only problem is IF he sells the team to someone other than his family, AND they take out enormous loans for the cash to buy the team and then have to pay off those loans where the interest will be several million a year. That's likely years down the line and a new contract will likely be in place. He has no financial problems now whatsoever.

 

 

which is why they have flat out stated they will spend to the $109 million cap, but not go crazy back loading contracts with huge upfront signing bonuses.

[BillsVet]

Why do the optimists out there think cash to the cap is a good thing? What's good about it? This cash to the cap approach is further restrictions on our ability to get better players in here. The NFL is changing and we're not changing with it because our geriatric owner gives his personnel people financial limitations. If Marv said 30M is what we have left, that's not much. Our top pick will get their bonus and pay and now we're down even more from that 30M. Last year the Bills paid so little in salary compared with other teams around the leauge, I wondered if they were saving up for another season. Now I see that's not the case.

 

Don't be misled by cash to the cap. All it means is we're going to play with less than the other boys. You can talk all you want about how last years draft picks are going to start and how there's another draft coming up and we haven't started free agency. But...we've just limited ourselves voluntarily by saying we've got 30M to use as opposed to what the NFL says we have.

[JoeF]

Why do the optimists out there think cash to the cap is a good thing? What's good about it? This cash to the cap approach is further restrictions on our ability to get better players in here. The NFL is changing and we're not changing with it because our geriatric owner gives his personnel people financial limitations. If Marv said 30M is what we have left, that's not much. Our top pick will get their bonus and pay and now we're down even more from that 30M. Last year the Bills paid so little in salary compared with other teams around the leauge, I wondered if they were saving up for another season. Now I see that's not the case.

 

Don't be misled by cash to the cap. All it means is we're going to play with less than the other boys. You can talk all you want about how last years draft picks are going to start and how there's another draft coming up and we haven't started free agency. But...we've just limited ourselves voluntarily by saying we've got 30M to use as opposed to what the NFL says we have.

 

Its not a good thing BillsVet--you are dead on. Unfortunately its reality for the Bills and there are ways to get creative to make it work. Believe me its not the preferred method -- but we kind of have to deal with the world the way it is not the way we wish it would be.

[HurlyBurly51]

If Marv said 30M is what we have left, that's not much. Our top pick will get their bonus and pay and now we're down even more from that 30M.

 

But...we've just limited ourselves voluntarily by saying we've got 30M to use as opposed to what the NFL says we have.

 

Your last point is not lost on me, but as it pertains to your other point, the good news is that at least the draft picks and the huge signing bonus for the #12 pick have already been accounted and budgeted for before coming up with the $30M figure. Hey, it's something

[I 90]

Don't be misled by cash to the cap. All it means is we're going to play with less than the other boys. You can talk all you want about how last years draft picks are going to start and how there's another draft coming up and we haven't started free agency. But...we've just limited ourselves voluntarily by saying we've got 30M to use as opposed to what the NFL says we have.

 

 

Its not a good thing BillsVet--you are dead on. Unfortunately its reality for the Bills and there are ways to get creative to make it work. Believe me its not the preferred method -- but we kind of have to deal with the world the way it is not the way we wish it would be.

 

Creative ?

 

If the Bills actual cap number comes in around the enforced minimum it leaves us with a 7-9 team playing with a handicap. More luck than creativity would be required.

 

Does this year become a positioning year, a placeholder ? That would dangerously creative. Ralph has been a traditional NFL spender in the past and will be in the future, I assume. Packing in 2007 (because the free agent class doesn't inspire ?) is a risk for one of the least successful teams of this decade.

[JoeF]

Creative ?

 

If the Bills actual cap number comes in around the enforced minimum it leaves us with a 7-9 team playing with a handicap. More luck than creativity would be required.

 

Does this year become a positioning year, a placeholder ? That would dangerously creative. Ralph has been a traditional NFL spender in the past and will be in the future, I assume. Packing in 2007 (because the free agent class doesn't inspire ?) is a risk for one of the least successful teams of this decade.

 

Creative in the sense of the structuring of contracts...gauranteed years -- higher base salaries in the first years of the deal rather than the last years. We are taking amoritization off the table as a tool and a factor here--we have to be creative. That was the point......

 

Again--if we sign a player say for 5 years at $25 Million, the Bills may break the contract as all base salaries something like:

 

$8 Million (Y1); $7 Million (y2); $4 M (Y3); $3M (y4); $3M (y5) and gaurantee the first 2 or 3 years of the contract in place of a signing bonus..its a risk--but we have to be creative. There are some advantages in this method that may help attract players--withholding taxes are lower for a salary spread over 17 game checks than one large bonus check; The gauranteed years may be something that not every team is willing to do--and it is a risk because of injury and simply non performance.

 

 

For the same contract another team--say the Washington Snyderskins -- may structure the contact $10M SB and salaries of $750K; $3M; $3.25M; $4M; $4M--amoritizing the sigining bonus--cap hits would be:

 

 

$2.75M (Y1); $5M(Y2); $5.25 (Y3); $6M (y4); $6M (y5)

 

This is a really simple example (Clumpy is probably ready to kill me) -- because there are no roster bonuses or other incentive clauses involved--but what the Bills are really doing is NOT spending cap minimum, they will spend most of the cap...they are eliminating amoritization as a factor in future contracts. It hurts us from a competitive standpoint -- probably a lot for the top tier free agents -- so we have to structure contracts in a way that allows us advantage.