The Electric Commentary

Friday, February 27, 2004

PEOPLE HAVE LEARNED HOW THE CAP WORKS

NFL accountants long ago figured out how to circumvent the cap. They have only recently realized how to handle the trade aspect of the cap. As most of you know, a signing bonus allows a franchise to pay a player in excess of the cap because the bonus can be allotted for cap purposes over the life of the contract in any proportion that the player and the team wants. This is great for cap aversion but there are two things that complicate life.

1. Signing bonuses are guaranteed.

2. If a player is traded before his contract has expired, the ENTIRE SIGNING BONUS comes due (that is to say, counts against the salary cap) immediately. The reason for this is that the signing bonus, as a matter of law, is paid immediately when the contract is signed (you know, it’s a SIGNING bonus). This means that while two teams can trade players with there salaries, they can not trade signing bonus’s because signing bonus’s have already been paid.

Therefore, trading a player often requires a team making a substantial sacrifice.

HOWEVER,

there is now a new attitude in the NFL with regards to trades, and it is inspired by baseball.

The Milwaukee Brewers are a small market franchise. They always try to keep their pay roll as low as possible. Every so often they stumble upon a talented player, like, say, for instance, Richie Sexson. They will keep a good player only until he is about to become a free agent (Note: this time period is generally 6 years from the time the player was drafted). They always, always, always trade their good players before free agency just to get something, rather than losing the player outright. Usually they settle for draft picks.

The NFL is now partaking of the same practice, and not only as a response to players late in their contracts, but also to the prospect of a holdout.

Such is the case with Clinton Portis. When I first read that Denver might trade him, I thought they were nuts. Now I’m not so sure. He has been publicly unhappy with his contract, he is often injured, and the Broncos possess not one, but two capable backups. Furthermore, it is the Denver offensive line, and not the guy carrying the ball behind them, that really makes the team go.

If they attempted to keep Portis, they would, in all likelihood, end up losing him to free agency, or screwing up their cap situation to the point where they can no longer sign offensive lineman. So instead they will take a small, one-year cap hit, acquire Champ Bailey, not a bad consolation prize, and keep more cap space open for the future.

This may work out fantastically. But when someone copies the Milwaukee Brewers, they do so at their own peril.

WELCOME.

Most visitors know me already. My name is Paul Noonan. I am a lawyer (Sorry. One of the first things that they tell you in law school is that you MUST state that you are a lawyer within two sentences of meeting someone). I also live in Chicago, although I am originally from a suburb of Milwaukee, Wisconsin.

I have, for the past 2 years, written a football column during football season. It has until this point been exclusively available via e-mail, but from this point on it will be available everywhere on earth via the magic of the Internet, so that now even those in third world countries can gain insight into the subtle nuances of the cover-2 defense.

I probably won’t post very much until late July, but to keep busy until football season, I am also a bit of a politics junkie, just like 98% of everyone else with a blog. So we’ll have some of that.

We’ll also get to make fun of TO even though it’s the off-season. This brings me great joy. His soon to be ex-agent did not file the appropriate paperwork in time so TO is stuck with the 49ers for another 3 years. More importantly, he will not get that big free agent money.

But T’s plight is everyone else’s blessing, because while signing him as a free agent would have resulted in some team taking a big cap hit, he can now be had for a song (that song being “Bad, Bad, Leroy Brown” which, as most of you know, isn’t even a very good song). Teams that would never have contemplated signing T are now in the running for his services. It may even screw up the Portis/Bailey deal that is purportedly in the works. Suddenly the NFL, which has not seen a big trade in eons due to the salary cap circumvention device that is the signing bonus, is awash in trade rumors. But why?


 
Search:
Keywords:
Amazon Logo