Avoiding Salary Cap Purgatory

[ztboiler]

Apologies for the long post...please stop reading if you don't like this type of stuff!

 

We all talk about avoiding salary cap problems, but the details of how to do so are elusive - especially with a franchise QB in the mix.  It's really not our problem as fans, so it's understandable that we mostly focus on who we want to bring in this year to fix all our problems....but let's get real for a bit.

 

Seeing the Saints moves today caused me to go to their Overthecap page and examine their situation. This is a contending team fighting the same cap fight we'll be fighting in a few years. Their cuts today freed up close to $17M or so and created $8.7M in new dead money.  All of that and they are still only a few million below the cap for 2014 - about the minimum they would need to sign draft picks and have any cushion for making moves in-season.  

 

So...who else can they cut so they could re-sign Jimmy Graham?  Well, look at their list under contract, and there isn't much left where you could generate net cap savings on a replaceable player.  Lance Moore and Pierre Thomas are about it (combined $5.5M savings) and both have solid value in current reasonable contracts.

 

Restructuring is the next option.  This is a tight spot.  They have a $20+M QB counting $18+M against the cap this year.  They can get some space back by restructuring him and continuing to mortgage the future, but it is a year early and accelerates the problems that restructuring inevitably creates.  Evans, Grubbs and Colston could be restructured/extended but you'd be adding years to players beyond their likely tenure and guaranteeing a huge future dead cap hit for any or all three. Ben Grubbs and Jahri Evans are really good players, and great guards fit a well established purpose with Drew Brees at QB...but that is $20M tied up in cap dollars this year at the guard spot.

 

Let's go to a key moment.  In 2012 the Saints signed Ben Grubbs, Curtis Lofton, Broderick Bunkley, and David Hawthorne to significant long term UFA deals in the same year that they signed Marcus Colston to a long term deal.  Nothing super unusual about that - we signed a similar haul ourselves in 2013.  However, all those players enter year 3 of those contracts in 2014 and none can be cut for cap savings (Bunkley could save $1,275,000, and the others are 0 or negative savings).  

 

Grubbs and Colston are productive and fill unique roles and wouldn't be vulnerable to the typical cap casualty moves - their guaranteed money makes some sense.  Lofton, Bunkley and Hawthorne don't have unusually steep price tags - but are a combined $15M in unflexibility for players who don't have difficult skill sets to replace.  All in all, there is a combined $32+M in cap unflexibility created from these 2012 signings - all have guaranteed money preventing them from getting cut (practically) until the 4th year of their contract.  

 

In looking at Grigson's signings from last year, only Cherilus received a guaranteed money contract where he couldn't be cut (practically) until year 4.  Landry is cuttable after 2014 (2 years) but saves only $2+M with $3.5M dead), effectively making him a 3 year player.  All others incur little to moderate dead money after 2 years with significant realized cap savings if they are not producing and several were year to year deals.  This yields the type of cap flexibility we'll need to avoid Cap Purgatory.  You have to get your long term commitments right.  

 

Mistakes will be made, but consider how much risk to the future cap you really want to take on when you project the quick fix signings you'd like to see and how much guaranteed money they will command.  I'd much rather have talented guys getting their shot but who will get cut if they don't produce than guaranteed money stars that seldom seem to work out.  I hope Grigs stays the course in this regard.

 

 

[Gavin]

Apologies for the long post...please stop reading if you don't like this type of stuff!

 

We all talk about avoiding salary cap problems, but the details of how to do so are elusive - especially with a franchise QB in the mix.  It's really not our problem as fans, so it's understandable that we mostly focus on who we want to bring in this year to fix all our problems....but let's get real for a bit.

 

Seeing the Saints moves today caused me to go to their Overthecap page and examine their situation. This is a contending team fighting the same cap fight we'll be fighting in a few years. Their cuts today freed up close to $17M or so and created $8.7M in new dead money.  All of that and they are still only a few million below the cap for 2014 - about the minimum they would need to sign draft picks and have any cushion for making moves in-season.  

 

So...who else can they cut so they could re-sign Jimmy Graham?  Well, look at their list under contract, and there isn't much left where you could generate net cap savings on a replaceable player.  Lance Moore and Pierre Thomas are about it (combined $5.5M savings) and both have solid value in current reasonable contracts.

 

Restructuring is the next option.  This is a tight spot.  They have a $20+M QB counting $18+M against the cap this year.  They can get some space back by restructuring him and continuing to mortgage the future, but it is a year early and accelerates the problems that restructuring inevitably creates.  Evans, Grubbs and Colston could be restructured/extended but you'd be adding years to players beyond their likely tenure and guaranteeing a huge future dead cap hit for any or all three. Ben Grubbs and Jahri Evans are really good players, and great guards fit a well established purpose with Drew Brees at QB...but that is $20M tied up in cap dollars this year at the guard spot.

 

Let's go to a key moment.  In 2012 the Saints signed Ben Grubbs, Curtis Lofton, Broderick Bunkley, and David Hawthorne to significant long term UFA deals in the same year that they signed Marcus Colston to a long term deal.  Nothing super unusual about that - we signed a similar haul ourselves in 2013.  However, all those players enter year 3 of those contracts in 2014 and none can be cut for cap savings (Bunkley could save $1,275,000, and the others are 0 or negative savings).  

 

Grubbs and Colston are productive and fill unique roles and wouldn't be vulnerable to the typical cap casualty moves - their guaranteed money makes some sense.  Lofton, Bunkley and Hawthorne don't have unusually steep price tags - but are a combined $15M in unflexibility for players who don't have difficult skill sets to replace.  All in all, there is a combined $32+M in cap unflexibility created from these 2012 signings - all have guaranteed money preventing them from getting cut (practically) until the 4th year of their contract.  

 

In looking at Grigson's signings from last year, only Cherilus received a guaranteed money contract where he couldn't be cut (practically) until year 4.  Landry is cuttable after 2014 (2 years) but saves only $2+M with $3.5M dead), effectively making him a 3 year player.  All others incur little to moderate dead money after 2 years with significant realized cap savings if they are not producing and several were year to year deals.  This yields the type of cap flexibility we'll need to avoid Cap Purgatory.  You have to get your long term commitments right.  

 

Mistakes will be made, but consider how much risk to the future cap you really want to take on when you project the quick fix signings you'd like to see and how much guaranteed money they will command.  I'd much rather have talented guys getting their shot but who will get cut if they don't produce than guaranteed money stars that seldom seem to work out.  I hope Grigs stays the course in this regard.

Cutting Grubbs post June 1 would save them almost 7 mill...Which would bring them to a little over 10 mill over the cap, Also cutting Bunkley would save another 4 mill (a little over) post June 1.......Not that I would do either but ya have to do what ya have to do

[chad72]

That is why I suggested we should extend T.Y. after year 3 and extend Andrew after year 4, we might gain a lot of value on T.Y. by doing that instead of waiting for him to get to contract year 4.

[esmort]

Apologies for the long post...please stop reading if you don't like this type of stuff!

 

We all talk about avoiding salary cap problems, but the details of how to do so are elusive - especially with a franchise QB in the mix.  It's really not our problem as fans, so it's understandable that we mostly focus on who we want to bring in this year to fix all our problems....but let's get real for a bit.

 

Seeing the Saints moves today caused me to go to their Overthecap page and examine their situation. This is a contending team fighting the same cap fight we'll be fighting in a few years. Their cuts today freed up close to $17M or so and created $8.7M in new dead money.  All of that and they are still only a few million below the cap for 2014 - about the minimum they would need to sign draft picks and have any cushion for making moves in-season.  

 

So...who else can they cut so they could re-sign Jimmy Graham?  Well, look at their list under contract, and there isn't much left where you could generate net cap savings on a replaceable player.  Lance Moore and Pierre Thomas are about it (combined $5.5M savings) and both have solid value in current reasonable contracts.

 

Restructuring is the next option.  This is a tight spot.  They have a $20+M QB counting $18+M against the cap this year.  They can get some space back by restructuring him and continuing to mortgage the future, but it is a year early and accelerates the problems that restructuring inevitably creates.  Evans, Grubbs and Colston could be restructured/extended but you'd be adding years to players beyond their likely tenure and guaranteeing a huge future dead cap hit for any or all three. Ben Grubbs and Jahri Evans are really good players, and great guards fit a well established purpose with Drew Brees at QB...but that is $20M tied up in cap dollars this year at the guard spot.

 

Let's go to a key moment.  In 2012 the Saints signed Ben Grubbs, Curtis Lofton, Broderick Bunkley, and David Hawthorne to significant long term UFA deals in the same year that they signed Marcus Colston to a long term deal.  Nothing super unusual about that - we signed a similar haul ourselves in 2013.  However, all those players enter year 3 of those contracts in 2014 and none can be cut for cap savings (Bunkley could save $1,275,000, and the others are 0 or negative savings).  

 

Grubbs and Colston are productive and fill unique roles and wouldn't be vulnerable to the typical cap casualty moves - their guaranteed money makes some sense.  Lofton, Bunkley and Hawthorne don't have unusually steep price tags - but are a combined $15M in unflexibility for players who don't have difficult skill sets to replace.  All in all, there is a combined $32+M in cap unflexibility created from these 2012 signings - all have guaranteed money preventing them from getting cut (practically) until the 4th year of their contract.  

 

In looking at Grigson's signings from last year, only Cherilus received a guaranteed money contract where he couldn't be cut (practically) until year 4.  Landry is cuttable after 2014 (2 years) but saves only $2+M with $3.5M dead), effectively making him a 3 year player.  All others incur little to moderate dead money after 2 years with significant realized cap savings if they are not producing and several were year to year deals.  This yields the type of cap flexibility we'll need to avoid Cap Purgatory.  You have to get your long term commitments right.  

 

Mistakes will be made, but consider how much risk to the future cap you really want to take on when you project the quick fix signings you'd like to see and how much guaranteed money they will command.  I'd much rather have talented guys getting their shot but who will get cut if they don't produce than guaranteed money stars that seldom seem to work out.  I hope Grigs stays the course in this regard.

 

I agree Grigson has done a good job making the FA contracts easy for the Colts to get out of if they need/want to and hope he continues structuring team friendly contracts.  I do think it may cost us a bit extra in some cases to structure the contracts like this and why many give Grigson grief for overpaying, but I would rather pay a little premium for the cap flexibility it allows than pinch every penny to get a rock bottom deal that we are locked into for the full length of the contract.

[Superman]

Cutting Grubbs post June 1 would save them almost 7 mill...Which would bring them to a little over 10 mill over the cap, Also cutting Bunkley would save another 4 mill (a little over) post June 1.......Not that I would do either but ya have to do what ya have to do

 

Post-June 1 cuts aren't to be viewed as a silver bullet, though. "I'll gladly pay you Tuesday for a hamburger today..." You pick that dead money right back up next year, and in the Saints case, they don't have cap flexibility in 2015 either. So you make these post-June 1 cuts this year, then sign players like Jimmy Graham, and next year you're up against the cap again.

[ztboiler]

Cutting Grubbs post June 1 would save them almost 7 mill...Which would bring them to a little over 10 mill over the cap, Also cutting Bunkley would save another 4 mill (a little over) post June 1.......Not that I would do either but ya have to do what ya have to do

 

You are right, Gavin, and its a great point that when you put yourself this far behind the cap you start multiplying the problem with short term behaviors just to survive the cap this year.  Not only do you still have to deal with the cap in 2015 where your problem is just as severe, but you have to do so without a player (Grubbs) who was core to your mission and productive.

[Superman]

You are right, Gavin, and its a great point that when you put yourself this far behind the cap you start multiplying the problem with short term behaviors just to survive the cap this year.  Not only do you still have to deal with the cap in 2015 where your problem is just as severe, but you have to do so without a player (Grubbs) who was core to your mission and productive.

 

Extending Brees isn't really a problem. Brady and Manning both have contracts that take them through their 40th, and Brees' deal currently takes him through 38. Add a couple years and lessen some of the cap. Hopefully, he'd agree to a smaller average on the last two years of the deal, since the deal is already severely backloaded. Throw him some guaranteed money right now and make the contract a little easier to deal with for the next two or three seasons.

 

But cutting players, like you said, is problematic. 

[loudnproudcolt]

Really a good post, and the site "over the cap" has great articles on it each day about cap space and how it affects teams and different players. I agree Grigs has done a good job of not putting us in cap hell. And if you really want to talk "cap hell" just look at the Dallas Cowboys. They are 25M over. To start they are going to have to restructure Romo, which only pushes the problem back further, and after the restructure, they will still need to cut and restructure just to get to the even cap number.

 

When we think about the cap, the one thing I have learned is it is not about if a team gets under the cap, but how. Restructuring contracts just punt the problem to the next year or two. I am glad we are in such good shape.

[ztboiler]

Extending Brees isn't really a problem. Brady and Manning both have contracts that take them through their 40th, and Brees' deal currently takes him through 38. Add a couple years and lessen some of the cap. Hopefully, he'd agree to a smaller average on the last two years of the deal, since the deal is already severely backloaded. Throw him some guaranteed money right now and make the contract a little easier to deal with for the next two or three seasons.

 

But cutting players, like you said, is problematic. 

 

To your point, in the age of 20M QB's, you almost have to commit to a "clear the slate" year once your franchise QB retires if you want to reach your maximum potential during the contending years...and who doesn't need a high pick or two once your QB situation changes?  It's exactly what we did when Peyton left town - and why we are in such good cap shape now, but people forget how easy it is to extend the wrong guys, pay guaranteed money to UFA's you don't know that well and get upside down before the contending years are over.  It is my opinion that it isn't excuseable to be in the position the Saints are in right now while you still have a QB that can win you Superbowls - he can get you to the playoffs, but he can't win you a Superbowl with a crippled roster.

[Superman]

To your point, in the age of 20M QB's, you almost have to commit to a "clear the slate" year once your franchise QB retires if you want to reach your maximum potential during the contending years...and who doesn't need a high pick or two once your QB situation changes?  It's exactly what we did when Peyton left town - and why we are in such good cap shape now, but people forget how easy it is to extend the wrong guys, pay guaranteed money to UFA's you don't know that well and get upside down before the contending years are over.  It is my opinion that it isn't excuseable to be in the position the Saints are in right now while you still have a QB that can win you Superbowls - he can get you to the playoffs, but he can't win you a Superbowl with a crippled roster.

 

Yeah, unless you get lucky and draft someone like Russell Wilson, or you can put someone like Nick Foles in good position to succeed, you really don't have a chance to draft a good QB prospect. You can develop one, but without playing time, it's going to be difficult. 

 

But I don't think the Saints are thinking about life after Brees just yet. Like you said, they're in win now mode, but being in that mode over the last several seasons has led to some cap issues.

[Maniq]

Great post, ztboiler.