Top 5 Reasons

[Mikie2times]

1. Show me and I'll pay you

 

Teams incur more financial risk by increasing bonus money. The hits teams take on guaranteed money or dead cap is what Buffalo is trying to remove with this strategy. We will offer very respectable to high end contracts without much guaranteed. The Bills are asking a player to keep performing, and if you do we will compensate you well. They might even jack up the player’s first year salary to show the commitment a signing bonus does.

 

2. Build threw the draft

 

We won't bring in many guys demanding a ton of up front money so that shifts emphasis to building threw the draft. Isn't the draft how you build championships anyway?

 

3. Keep your own guys

 

We will look to the draft but we will also look to renegotiate as early as possible. It's a method Buffalo has struggled with before but has shown some progress in recently. We will only get better at it as our emphasis shifts away from other FA's to our own.

 

4. FA Bust

 

Hand a guy in his mid to late 20's over ten million dollars and see if he's plays as hard for you the following season. These guys are human, this is the payday they've waited for and the expectation of the next one is not a priority.

 

5. Character

 

Good players who will play for us without demanding a huge bonus are guys who will have a high degree of character. It shows the player is willing to be compensated for actual performance and doesn't have the sense of entitlement that many players do.

[stuckincincy]

1. Show me and I'll pay you

 

Teams incur more financial risk by increasing bonus money. The hits teams take on guaranteed money or dead cap is what Buffalo is trying to remove with this strategy. We will offer very respectable to high end contracts without much guaranteed. The Bills are asking a player to keep performing, and if you do we will compensate you well. They might even jack up the player’s first year salary to show the commitment a signing bonus does.

 

Load up with a big thermos of coffee and a dozen doughnuts. You're going to be waiting for a long time before anyone shows up...

[Mikie2times]

Load up with a big thermos of coffee and a dozen doughnuts. You're going to be waiting for a long time for anyone to show up.

Your response is one more then I usually get.

[Kelly the Dog]

Top 5 reasons why your top 5 reasons are nonsense.

 

1. Doesn't and can't work that way. #1 picks get paid a lot before they produce. Other teams pay players a lot before they produce based on what they produced before. if the Bills do it this way, and the guy produces, he is gone because they won't resign him. So he never gets it.

 

2. Totally immaterial. This policy has zero to do with the draft. If anything, it hurts our draft because we will have more positions to fill in it and therefore cannot target the best player as easily. We will draft the best guy available on our board at a position of need regardless of who we do or do not sign as a free agent. So all of that building will be here or won't be here anyway. And if they are great picks and reach the end of their contract, they're gone.

 

3. Under this policy we can't keep our own guys, if they are great players. Read: Nate Clements. If Lee Evans was a free agent this year, we wouldn't be able to sign him and would lose him.

 

4. This happens, yes. But it's true in every sport, only to a percentage of the players, and it's unavoidable. Under your reasoning, however, nobody gets a huge payday from the Bills, whether it is for old accomplishment or future accomplishment.

 

5. Character is immaterial, too. The highest paid players in the game often have the highest character as far as the game goes. Manning and Brady and Favre come to mind. The highest paid back is who, LT now? There are just as many high quality character stars as there are low character, probably more. People badmouth Clements for calling himself "playmaker". What does he do in the real world? Try his ass off, never complain, say he loves Buffalo, etc.

[stuckincincy]

Your response is one more then I usually get.

 

 

Ah, you get your share, Mike.

[Mikie2times]

Talk about a classic example of point 1, look at LeCharles Bentley. 12.5 million dollar signing bonus, all guaranteed. His annual salary being eaten because the investment is to large to just let him walk. When it's all said and done Bentley could cost the Browns 20 million or more for a couple weeks of football.

[DeLuca1967]

Talk about a classic example of point 1, look at LeCharles Bentley. 12.5 million dollar signing bonus, all guaranteed. His annual salary being eaten because the investment is to large to just let him walk. When it's all said and done Bentley could cost the Browns 20 million or more for a couple weeks of football.

 

Are football players insured like other pro athletes?

[I 90]

2. Build threw the draft

We won't bring in many guys demanding a ton of up front money so that shifts emphasis to building threw the draft. Isn't the draft how you build championships anyway?

 

 

2. So all of that building will be here or won't be here anyway. And if they are great picks and reach the end of their contract, they're gone.

 

This is the issue. Teams arrive; they are not built. Contract structure and the shortness of careers means that no stone can be left unturned in any year. Players can't be told that future years will be better than the current one -- they don't wan't to hear it. An artificial restriction on spending sends the wrong message. Management must be on the same page as players (who want to win now).

[obie_wan]

Are football players insured like other pro athletes?

 

 

Players may buy insurance on the non-guaranteed portion of their contracts. I don;t know if the team insures them. In anmy event, any insurance proceeds do nothing to reduce the massive cap hit for a non-producing player.

[apuszczalowski]

Are football players insured like other pro athletes?

The teams may have some type of insurance that covers the cost for injured players, but the team still has that signing bonus hit the cap (not sure on the salary, might not count against the cap if they are on the IR)

[BUFFALOTONE]

Players may buy insurance on the non-guaranteed portion of their contracts. I don;t know if the team insures them. In anmy event, any insurance proceeds do nothing to reduce the massive cap hit for a non-producing player.

 

Actually prior to the draft certain athletes like Peyton Manning took out a 40 million dollar insurance policy on his arm. I am also pretty sure Vick did something similar. It is pretty commo from what I understand.

[Ramius]

Talk about a classic example of point 1, look at LeCharles Bentley. 12.5 million dollar signing bonus, all guaranteed. His annual salary being eaten because the investment is to large to just let him walk. When it's all said and done Bentley could cost the Browns 20 million or more for a couple weeks of football.

 

No player is going to sign with a team that offers small signing bonuses. Bonuses are the onyl things guaranteed in a players contract in the NFL, so they will get as much as they can. You'll see a player turn down a bigger contract with a smaller bonus for a bigger bonus and a smaller contract. Thats the way it works with non-guaranteed contracts.

[Mikie2times]

Are football players insured like other pro athletes?

I don't think they do but it's almost irrelevant anyway. If they had a policy that truly covered them from risk the premiums would be just as big a burden as the dead cap would be. It's not uncommon for 10-30% of the annual cap to be made up of dead cap space. The average is around 12% so dead cap will make up over 10 million for the average team this year. Some will pay upwards of 30 million in dead cap. This number doesn't even factor in any base salary that teams pay because they usually keep an injured or uninspired player a few more years if a big bonus is invested.

[richNjoisy]

I have been keeping myself as educated as I could possibly be (within reason) about the NFL salary cap and how to structure contracts.

Ever since marv's pronouncement last Friday I have - for the first time - started considering a shift in how contracts are structured.

 

Obviously, the method in the the past 10 years or so has been to keep base contracts (non guaranteed money) as low as possible and use the signing bonus divided by the lebgth of the contract as a means of circumventing the cap by effectively "borrowing" cap space from future years. As Kazoo has correctly pointed out, this can nail a team if a player gets seriously injured or simply does not play up to the size of his signing bonus (the only guaranteed money a player gets) .

 

The question is, Is this a new era? The Bills have $32 million in 2007 cap space which they claim they will spend (rookies are accounted for already so the total is for FA signings alone). Player salaries CAN be guaranteed even if they are released. Thus, a high base salry can be the same as bonus money EXCEPT it all has to count for the given year. It cannot be spread out over several years. For the player, all that matters is guaranteed money. Period. Length of contract is a joke a player would actually benefit if he were to get a high base salary and then make it easier for a team to release him in subsequent years without penalty (cap hit). For example, let's say (for kicks) that the Bills offer Nate a 6-year deal with a $12 mil base salary and a $4 mil bonus. That's $16 mil in his pocket for 2007. The rest of the contract can be whatever....say $6 , $7, $8, $9, $10 so the contract is listed as 6-year, $56 million. He pockets $16 mil right away. Bills take on $12.67 Mill on the cap. That leaves $20 mil left to spend. And they only risk at most a $3.3 cap hit in 2008 reducing by 2/3 mil every year.

 

The "normal" alternative contract to this would be a 6-year,$56 mil contract with a base of $2 mil and a signing bonus of $14 mil. Nate still pockets $16 mil but the Bill only take a 2007 cap hit of $4.67 mil leaving them with $27.33 mil to spend in 2007. But, if Nate is hurt or blows, eventually his release will accelrate money onto a future year's cap ($13.333 in 2008 reducing by $2.67 mil every year).

 

This method guranatees that a team will have lots of cap money to spend every year but the limitation is not borrowing from the future. although, a team would be in a great position to do so if it is poised to win a championship and a difference maker is out there to be signed.

 

I am still unsure if this type of bookkeeping can compete. But I don't think that it should be dismissed so handily. I say, let's see what marv can do with his $32 million kitty.

 

Go Bills!

 

-Rich

[Bills_Chick]

But we are not doing #3. That is the problem that I have with it. If #3 were true, we would be retaining Nate Clements.

[Kelly the Dog]

I have been keeping myself as educated as I could possibly be (within reason) about the NFL salary cap and how to structure contracts.

Ever since marv's pronouncement last Friday I have - for the first time - started considering a shift in how contracts are structured.

 

Obviously, the method in the the past 10 years or so has been to keep base contracts (non guaranteed money) as low as possible and use the signing bonus divided by the lebgth of the contract as a means of circumventing the cap by effectively "borrowing" cap space from future years. As Kazoo has correctly pointed out, this can nail a team if a player gets seriously injured or simply does not play up to the size of his signing bonus (the only guaranteed money a player gets) .

 

The question is, Is this a new era? The Bills have $32 million in 2007 cap space which they claim they will spend (rookies are accounted for already so the total is for FA signings alone). Player salaries CAN be guaranteed even if they are released. Thus, a high base salry can be the same as bonus money EXCEPT it all has to count for the given year. It cannot be spread out over several years. For the player, all that matters is guaranteed money. Period. Length of contract is a joke a player would actually benefit if he were to get a high base salary and then make it easier for a team to release him in subsequent years without penalty (cap hit). For example, let's say (for kicks) that the Bills offer Nate a 6-year deal with a $12 mil base salary and a $4 mil bonus. That's $16 mil in his pocket for 2007. The rest of the contract can be whatever....say $6 , $7, $8, $9, $10 so the contract is listed as 6-year, $56 million. He pockets $16 mil right away. Bills take on $12.67 Mill on the cap. That leaves $20 mil left to spend. And they only risk at most a $3.3 cap hit in 2008 reducing by 2/3 mil every year.

 

The "normal" alternative contract to this would be a 6-year,$56 mil contract with a base of $2 mil and a signing bonus of $14 mil. Nate still pockets $16 mil but the Bill only take a 2007 cap hit of $4.67 mil leaving them with $27.33 mil to spend in 2007. But, if Nate is hurt or blows, eventually his release will accelrate money onto a future year's cap ($13.333 in 2008 reducing by $2.67 mil every year).

 

This method guranatees that a team will have lots of cap money to spend every year but the limitation is not borrowing from the future. although, a team would be in a great position to do so if it is poised to win a championship and a difference maker is out there to be signed.

 

I am still unsure if this type of bookkeeping can compete. But I don't think that it should be dismissed so handily. I say, let's see what marv can do with his $32 million kitty.

 

Go Bills!

 

-Rich

But the Bills are ignoring the "cap hit" altogether. They are only counting cash. So in your example with Clements, you're right, the official cap hit would be 12.67, but the Bills would count Clements figure at 16 mil, because that's how much cash they gave him. So we would then have only 16 mil left for 9 other players.

[Mikie2times]

No player is going to sign with a team that offers small signing bonuses. Bonuses are the onyl things guaranteed in a players contract in the NFL, so they will get as much as they can. You'll see a player turn down a bigger contract with a smaller bonus for a bigger bonus and a smaller contract. Thats the way it works with non-guaranteed contracts.

If your point is a player would rather get guaranteed money then non guaranteed money your right. If your point is we can’t be competitive under this structure your wrong. The front loaded structure we can layout before a player in base salary can actually be more lucrative an offer then a team that invests more with guaranteed money. Some players will take to it and others won’t but we will still make some very competitive offers.

 

Take two 25 million dollar 5 year deals.

 

A.The first team signs a guy to 10 million dollar bonus and amortizes it over the 5 years. The cost in cap terms would be 2 million per year for the bonus. His base salary is made up of the remaining 15 million on the deal and will be back loaded. It would probably be something like 8% in year 1, 12% in year 2, 20% in year 3, 25% in year 4, and 35% in year 5. The total value of the contract adding in the bonus would be.

 

Year 1- 3.2 Mil Value after first year 11.2 Million

Year 2 -3.8 Mil Value after second year 13 Million

Year 3 –5.0 Mil Value after third year 16 Million

Year 4- 5.75 Mil Value after fourth year 19.75 Million

Year 5- 7.25 Mil Value after fifth year 25 Million

 

B.The second team signs a guy to a 2 million dollar bonus and amortizes it over the 5 years. The cost in cap terms would be 400,000 per year for the bonus. His base salary is made up of the remaining 23 million on the deal and will be front loaded. It would probably be something like 25% in year 1, 20% in year 2, 20% in year 3, 20% in year 4 and 15% in year 5. The total value of the contract adding in the bonus would be.

 

Year 1- 6.15 Million Value after First year 7.75 Million

Year 2- 5.0 Million Value after Second year 12.35 Million

Year 3- 5.0 Million Value after Third year 16.95 Million

Year 4- 5.0 Million Value after Fourth year 21.55 Million

Year 5- 3.85 Million Value after Fifth year 25 Million

 

By year 3 the second deal is already more lucrative then the first deal. It’s damn near the same after the 2nd year. It’s important that we have a GM people trust because trust is what we will need to convey to players without a lot of guaranteed money. Again all Marv is saying is show me you can play and I’ll pay you well. Some guys will understand that, some won’t but lets not get over dramatic about the situation.

[34-78-83]

If your point is a player would rather get guaranteed money then non guaranteed money your right. If your point is we can’t be competitive under this structure your wrong. The front loaded structure we can layout before a player in base salary can actually be more lucrative an offer then a team that invests more with guaranteed money. Some players will take to it and others won’t but we will still make some very competitive offers.

 

Take two 25 million dollar 5 year deals.

 

A.The first team signs a guy to 10 million dollar bonus and amortizes it over the 5 years. The cost in cap terms would be 2 million per year for the bonus. His base salary is made up of the remaining 15 million on the deal and will be back loaded. It would probably be something like 8% in year 1, 12% in year 2, 20% in year 3, 25% in year 4, and 35% in year 5. The total value of the contract adding in the bonus would be.

 

Year 1- 3.2 Mil Value after first year 11.2 Million

Year 2 -3.8 Mil Value after second year 13 Million

Year 3 –5.0 Mil Value after third year 16 Million

Year 4- 5.75 Mil Value after fourth year 19.75 Million

Year 5- 7.25 Mil Value after fifth year 25 Million

 

B.The second team signs a guy to a 2 million dollar bonus and amortizes it over the 5 years. The cost in cap terms would be 400,000 per year for the bonus. His base salary is made up of the remaining 23 million on the deal and will be front loaded. It would probably be something like 25% in year 1, 20% in year 2, 20% in year 3, 20% in year 4 and 15% in year 5. The total value of the contract adding in the bonus would be.

 

Year 1- 6.15 Million Value after First year 7.75 Million

Year 2- 5.0 Million Value after Second year 12.35 Million

Year 3- 5.0 Million Value after Third year 16.95 Million

Year 4- 5.0 Million Value after Fourth year 21.55 Million

Year 5- 3.85 Million Value after Fifth year 25 Million

 

By year 3 the second deal is already more lucrative then the first deal. It’s damn near the same after the 2nd year. It’s important that we have a GM people trust because trust is what we will need to convey to players without a lot of guaranteed money. Again all Marv is saying is show me you can play and I’ll pay you well. Some guys will understand that, some won’t but lets not get over dramatic about the situation.

 

I think your take here makes a lot of sense. It is unlikely to me that the assumption that the Bills will completely ignore the "Cap hit" is true. I just don't think Marv explained it that well.

[Kelly the Dog]

Kzoo, no player is going to sign that contract. If the Bills are willing to offer a guy 25 mil, another team will. And will use example 1. The player will be guaranteed, and receive, 11.2 mil in the first year, versus 7.75 from the Bills. That 3.5 mil more in his pocket and more guaranteed. And he would be stupid not to take it.

[Mikie2times]

Kzoo, no player is going to sign that contract. If the Bills are willing to offer a guy 25 mil, another team will. And will use example 1. The player will be guaranteed, and receive, 11.2 mil in the first year, versus 7.75 from the Bills. That 3.5 mil more in his pocket and more guaranteed. And he would be stupid not to take it.

He would be stupid not to take deal one, but that’s assuming deal one is even on the table. I'm not making that assumption; I just used it as an example to show that even a wide gap in bonus money can be eliminated with front-loaded base salary. Tweak the numbers a little more and I'll show you a deal that’s more lucrative to the player after just his second year. You can even guarantee the first year of the deal. My point isn't to make our position sound better from a buying perspective, I'm just showing some of the things we can do and how we will still be involved in Free Agency.