IIsweet wrote: ↑Mon Mar 06, 2023 12:33 pm
I am curious as to whether the owners are liable to pay the players their "dead cap" money? Or what it means.
Was this a signing bonus that the player receives up front but is able to be distributed over the length of a contract?
I'm looking at Spotrac and the Vikings Cap table, there is all of this dead cap. I really am unsure as to what this is?
Can someone clarify it for me please?
Thank You
I'll give you my armchair cap understanding.
1. Salary can't be spread out over years for cap purposes.
If a guy is due $10 million in salary in 2023, it goes against the cap in 2023.
2. Bonus can be spread out over the length of the contract.
If a guy gets a $40 million signing bonus over 4 years, it can be spread out against the cap ... $10 million against the cap for 4 years = $40 million. A bonus can't be converted to anything else. Once it's put on the cap, it's put on the cap. It stays there forever ... even if the player isn't there anymore.
Sometimes when teams get up against the cap, they convert salary to bonus so that they can spread out the cap hit (see 1 and 2 above). Let's say that guy with the $10 million in salary has 3 years guaranteed salary left at $10 million per year. If the team needs to cut its cap hit, they can convert some or all of it to bonus. Let's say they convert $15 million to bonus and extend the contract 2 more years to a total of 5 years. Now the team can spread that $15 million for those 5 years, or $3 million a year. That reduces the current-year cap hit to $8 million is (the prorated bonus of $3 million plus the remainder of his salary that wasn't converted, or $5 million). The advantage for the player is that he gets a bunch of his money up front. The disadvantage is that his game checks are smaller.
All that money on the cap stays there until the contract runs out. Even if the player is gone.
Some of the player's money is guaranteed. Once he's received all his guaranteed money, the team can release him without owing him any more. But whatever is left on the books from his cap ... that's dead money. It's money that counts against the books without the player being part of the team.
As VL said, some teams play this "restructure" game a lot. They convert salary to bonus and keep opening up cap space for the current year. They do it with one player after another, running up against the cap every year, restructuring Peter so they can pay free agent Paul — or even get cap compliant. As they do, the potential dead cap number grows. The team finds itself annually at this time of year needing to cut cap.
"Some teams" — I give you the Minnesota Vikings under Rick Spielman.
My hope is that Kwesi ends this nonsense. As a fan, I'm sick and tired of the Minnesota Vikings living on a maxed-out credit card that leads to annual on-field mediocrity. His draft last year is definitely open to criticism. It may have been bad (or it may have been good with a competent DC like Brian Flores coaching guys like Cine and Booth). Time will tell. I have no problem with people criticizing it. But if he can turn this financial travesty around over the next couple of years, he will prove himself to be more than worthy.