Colts Keeping Freeney

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There is a new wave of reports stating that the Indianapolis Colts will keep Dwight Freeney on the 2012 roster as the team rebuilds and retools after 2011 with a new coaching staff and new hybrid defensive scheme.

Make no mistake, I’m a Dwight Freeney fan. I believe that his presence alone was responsible for many of the wins the team piled up over the previous decade and his ferocious pass rush when playing with a lead allowed the team to cover up for a lot of deficiencies on defense. As a fan, I love to watch him and I love to listen to him too. He has always seemed like a really fun and interesting guy.

As a cap guy, though, I just don’t see the point. The team could save just over $14 million in real cash and in cap space by cutting him. When you’re staring down the barrel of $35 million in dead money for 2012, that savings could go a long way. Heck, even without the dead money, and even without spending more than the minimum required to replace him, that savings can STILL go a long way, since the new CBA allows teams to roll over unused cap space! The 2012 Colts are going to get better (they can’t get any worse; and one could argue that simply through the additions of Andrew Luck and a new coaching staff they’re immediately better in all three phases of the game) but they’re not in any position to contend seriously just yet, even if everything breaks perfectly. So even if Freeney is an absolute terror in the new defensive scheme, it hardly makes sense to pay him that kind of money.

In reality, he’s an unknown. It’s the last year of his deal, he is getting older, his motor isn’t quite what it was, he’s probably not worth a long term extension, and nobody has any idea if the new defense suits his strengths. He won’t be the difference between contention in 2012 and failure, and that $14 million could be better spent elsewhere. I love the guy, but he’s little more than an expensive toy for Manusky and Pagano at this point, and the team should have already added him to the long list of famous and beloved Colts that will be looking for new teams in 2012. Their 2013-14 cap situation is already setting up to be great, but even in the best of times there’ll come a time when that extra $14 million would come in handy.

 

Peyton Manning’s (New) Contract

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Well, now there’s even more proof of the genius of Tom Condon, the super agent that makes self-declared super agent Drew Rosenhaus look like a child.

Less than nine months after he secured an injured Peyton Manning a $26.4 million payout, breaking hearts in Indiana and nationwide in the process, he has now negotiated a bigger and better deal for his client, who is now going to be locked in for another year for even more money!

This contract, which I must repeat is for a player who missed all of last year and will be 40 when it ends in 2016, is for 5 years and a whopping $96 million, eclipsing the previous contract’s 5/90 total that was unrealized. Coming off a one year $26.4 million deal in reality, Manning now has signed a 1 year deal with $18 million guaranteed (all salary), after which (if he is on the roster at the end of the 2012 league year, on March 11, 2013) a new guarantee will kick in and net him  a total of $38 million guaranteed for all injury for 2013-2014 and $58 guaranteed through 2015 if he doesn’t have a neck injury in 2013. If he is on the roster at the end of the 2014 league year, his 2015 salary becomes guaranteed at $19. The same is true the following year.

So there are no bonuses and no tricks: Manning gets paid $18 million in 2012 whether he plays or not. The Broncos can cut him before March 11, 2013 and owe nothing more. Otherwise they owe $40 million for the next two seasons and then have the option to cut him or pay him $19m before each of the next two seasons. If he can play in 2012, it’s likely that the total, barring retirement or a total dropoff, will be the full $96 million over five years, ending when he is 40 years old.

This is, for sure, a more team-friendly deal for the Broncos than the one he signed in July 2011 with the Colts, who will be eating $10.4 in dead money in 2012, had to cut a legend, and already suffered through one bad season and may have to weather another one or two more before contending again. But it’s still a giant contract for a player coming off a series of surgeries, with major question marks, who will be 40 at the end of the term. It’s not a big win for the Broncos financially. And it makes me wonder why exactly John Elway made a big show of firing a very well qualified and loyal executive in Mike Bluem recently (coincidentally, he was hired by the Colts last week) in order to hire a “bulldog” of a negotiator (former agent Mike Sullivan), only to see his shark negotiator get run over writing a deal that any of us could easily have done just as well.

 

Mark Sanchez’s “Extension”

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At first glance, Mark Sanchez’s 3 year, $40.5 million extension* announcement was a bit of a jaw-dropper. The Jets appeared to be rewarding mediocrity and further coddling a player that by all accounts was already a bit too much of a kid than a serious leader and hard worker. But the release of more details shows it to be little more than a restructuring, saving the team some cap space now in exchange for guaranteeing a bunch of money they were probably going to pay him anyway. In reality, it’s really only a $2.75 million raise over the next two years, which for a team like the Jets is not a big deal at all given their cap situation.

*- Or, if you wish, 5 year, $58.25 million contract. Or, if you really want to reach and assume they’ll be in some Super Bowls, which unlock some escalators they’ll surely be thrilled to pay, 5 year, $68.5 million deal.

Now, it could be argued (successfully, if you ask me) that anything over the amount of $0 is too much to pay for bad quarterbacking, but it seems the Jets viewed the next two years as a sunk cost. There won’t be another Peyton Manning or Brett Favre on the market to swoop in and “save” them (I use quotes here because I believe Favre did more harm than good), so it would seem to be the best option to give the kid a long leash and see if another year or two can turn him into a competent QB. After all, it wasn’t until his second contract that his NY counterpart Eli Manning started making more good decisions than bad ones regularly.

The Jets were most likely going to pay Sanchez $17.75 million in 2012 and 2013 anyway. Now they’ll pay him $20.5. Some of the salary is converted to bonus and prorated over the new years on the end of the deal, 2013 becomes guaranteed, and after that, the Jets have three successive years after which they can give up on him for good with only a small acceleration, or have him under contract at a reasonable figure (for a good QB) if he does indeed turn into that good QB.

So for $2.75 million and a guarantee in 2013 that may look bad, the Jets allow Sanchez to feel good about himself and are making a modest gamble. That 2013 salary is the risk they’re really taking, but they’ve deemed it to be worth it on the chance, however laughable you or I might find it, that he becomes a good decision maker.

This isn’t the kind of decision a GM would make if he was starting from scratch. Clearly Mark Sanchez isn’t worth serious money. But the Jets and Mike Tannenbaum have already been sort of painted into a corner. This move doesn’t really make a bad situation worse, and in the event of a miracle, they’ll end up getting great value.

 

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Great Jets cap resource site

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One of the best team-specific cap resources on the web right now is the NY Jets Cap page.

No fan-run site can be guaranteed to be totally accurate, as most player contracts are never made public and they often contain minor incentives and tweaks that make even the common numbers slightly off, but for the purposes of most fans, the figures one can find on sites like this are correct. He also keeps track of their divisional rivals and writes excellent articles that show his intimate knowledge of the cap and contracts. The site makes for a great read.

Peyton Manning’s Contract

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The looming release of Peyton Manning has led to a lot of analysis of the details of his contract by people that otherwise haven’t really cared very much about contracts in the past. There’s a lot of basic information out there but I’ve been seeing a lot of incorrect assumptions and minor errors that may be coloring some thinking or influencing opinions (such as those about whether the Colts can or should keep Manning AND draft Luck, about what happens to their cap if he’s cut, about whether Manning can be traded, etc). I suppose I’ll add my voice to the chorus.

When I look at the Manning contract I see a stroke of brilliance by agent Tom Condon. It looks even smarter in hindsight now, given that he got a client – who was known to be injured –  paid $26 million to miss an entire season and may have set him up for another big payday as history’s biggest free agent, but even with that aside, he wrote a contract that put the Colts to a decision that, if made, would effectively lock them in to four more years of an older QB. This is Peyton Manning, so it’s not as if being stuck with him is exactly a bad thing, but as a general rule, if you can lock a 35 year old player into four more years of income, you’ve done your job as an agent very well. And if you can lock him in as the highest paid player in the game at the time, one whose AAV is to be surpassed only by another one of your own clients, even better.

Even more brilliant was that Condon seems to have seen all this coming and set it up so that the Colts would be the ones that came out looking like the villains if it did come to this. He knew that this Colts team was going to be awful without Manning and he knew they’d be in cap trouble in 2012. Injury or no injury, he created a bit of an out for himself and his client: because of the structure of the deal and the dates on the $28 million option bonus, the Colts MUST* be the ones to cut him. And because of this, we have seen a bit of a childish PR battle back and forth as both sides hoped to save face in advance of the coming cut. Given the status of the roster for 2012, there’s no way in hell Peyton Manning is all that excited about playing in Indianapolis. But now he doesn’t have to be the guy that asks for a trade or alienates fans. That honor is now given to owner Jim Irsay.

*- The reason they can’t just let the date pass without action is that there is – for some reason – a non-exercise fee of the same $28 million. The Colts would be penalized that same bonus amount for inactivity. Essentially, this tells us that Condon wanted Manning either locked in for four years – taking him to age 39 with a rich contract – or to hit an open market full of teams willing to compete financially for his services. And he wanted to force the decision on to them. There’s no other reason to put that clause in there, and further, to structure the dates into the 2011 league year so that they can’t be pushed back or renegotiated (as explained here by Andrew Brandt).

I don’t really know why the Polians allowed themselves to get run over quite so thoroughly on this contract. Manning was already known to be injured and the team knew even more about the extent of his injury and surgeries than was ever reported in the press. But they paid an injured player  a $20 million signing bonus and $6.4 million salary, and on top of that they gave that player and his agent all the power in the world when they didn’t really have to. Condon and Manning even managed to spin it into near heroism that Manning “gave the team an out” in case he was too hurt to ever play again. (Some out; only $26.4 million in cash and a 2012 dead money figure of $10.4 million.**) Such is the leverage of being a beloved sure-fire Hall of Famer whose contract was allowed to expire.

**- His signing bonus proration of $16m ($20/5 years) would accelerate onto the 2012 cap, but they also get a $5.6m ($28/5 years) credit because of the placement of the $28m option bonus exercise date within the 2011 league year. 16-5.6 = 10.4)

It is this option bonus that is both the brilliant part of the negotiation by Condon and also the most misunderstood part that I’m reading on fan sites. Whether it’s mislabeled as a roster bonus (which would then count only against the 2012 cap) or incorrectly divided into 4 years of $7m proration, it messes with the numbers a little bit. One needs only to notice the conveniently neat round numbers in each yearly cap hit to see the way the contract is structured:

2011 Cap Hit: $16 million.  ($6.4 salary / $4 SB proration / $5.6 OB proration)

2012 Cap Hit: $17 million.  ($7.4 salary / $4 SB proration / $5.6 OB proration)

2013 Cap Hit: $18 million.  ($8.4 salary / $4 SB proration / $5.6 OB proration)

2014 Cap Hit: $19 million.  ($9.4 salary / $4 SB proration / $5.6 OB proration)

2015 Cap Hit: $20 million.  ($10.4 salary / $4 SB proration / $5.6 OB proration)

There’s no reason to make all the salaries a precise X.4 except to make it round off with the $5.6 option proration.

So what we see is a one-year deal with a cash payout of $26.4 million, of which the previously described $10.4 falls onto the 2012 ledger, or the 5/90 with the ascending $16-20 million cap hits. Having committed to a $48 million in bonuses that would accelerate at $9.6 million per season, the Colts simply wouldn’t be able to absorb the dead money if they were to cut him (due to age and a likely decline in performance) at any point before maybe the final year of the deal. And if Manning was unable to play because of his nerve recovery (or lack thereof), they will have committed a huge sum of cash – $54.4 million before the start of the 2012 league year – to a player that didn’t take any snaps. And all of that has to be accounted for in the cap.

The Colts simply can’t take the risk. Not when they lucked into the first pick of a draft with two can’t-miss QB prospects. If they pay Manning and he can’t play, they can’t field a team. With or without Luck. Even if he can play, they’re already down a handful of useful players – Robert Mathis and Dwight Freeney included, most likely – because they have to clear out that much more cap room every year ($6.6m more in 2012 but the full 18-19-20 more in subsequent years).

It just isn’t a good situation for the Colts anymore. Even if Manning could be at 100% tomorrow.

The real problem, though, would be what they’d be facing if they had gotten unlucky and ended up 3-13 with something below the top two picks in the draft. Which very easily could have happened. Now THAT would have been a disaster.

The Colts are going to cut Manning. There’s no chance they’ll keep him now that Luck has fallen into their lap. It sucks, but it’s the best – and only – choice. And it isn’t even close.

TTB’s Inside the Cap

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TTB’s Inside the Cap is another great resource from the previous CBA. It includes the best Deion Rule explanation I’ve found on the web to date. The Deion rule is no more, of course, but it’s one of the many fascinating things about the old CBA that appeal to nerds like me.

It’s better for the game, of course, but in a way the new CBA takes a bit of the fun out of contract analysis. It could also be argued that this takes away some of the competitive advantage that the most clever GMs and negotiators enjoyed under the old CBA. I’m sure Bruce Allen would make that same argument.

Filed under Deion Rule, NFL, Salary Cap

Ask the Commish

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This was written years ago under the old CBA, but it’s still a good place to get one’s feet wet in learning about the cap, because it doesn’t have nearly as many words as sites like this one:

Ask the Commish Salary Cap FAQ

Filed under CBA, NFL, Salary Cap

EaglesCap.com

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I’ll be creating a separate page full of useful links, many of which may have more or better information than this site here. But as I find and add them, I may as well mention it here too. Anyone that puts work into this deserves to be seen, and those who do an exceptional job deserve to be highlighted.

One of the best cap resources I’ve seen, even if you aren’t a fan of the Eagles, is Bryce Johnston’s EaglesCap.com. He has been running the site since 2008 and it presents the team’s cap situation, to the best of any fan’s knowledge, in a very complete and orderly manner, breaking out P5 salary, signing and other bonuses, and other elements of each contract in an easy to read format.

Welcome

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Hello everybody. Welcome to my site dedicated to the NFL Salary Cap, player contracts, interesting off-field items, and the CBA in general. This stuff often interests me as much as the actual game of football and all the strategy, and I often find myself spending hours reading about the more interesting contracts and their structures.

With the new CBA in effect and the NFL lockout finally over, teams will have to play by new rules with regard to structuring contracts and signing players. The 2011 season is sure to be quite different in this regard, and I intend to learn the cap as completely as team GMs do, and to write about it when I find the time.

The web has plenty of great cap resources out there, but my friend recently pointed to Larry Coon’s NBA Salary Cap FAQ as the well-known end-all NBA Salary Cap and contracts page and wondered why there wasn’t one for the NFL. It’s a good question, so let’s see if we can make this site into that.

If you’re reading, thank you. And if you have feedback, comments, or additions to make, please email me.

Filed under NFL