Redskins lose $36 million in cap space

[OrioleMagic]

Redskins and Cowboys with compensatory picks at #33 and #34??? Wow, that would be a Godsend!

[allstar1579]

Redskins and Cowboys with compensatory picks at #33 and #34??? Wow, that would be a Godsend!

Was thinking that, but we got penalized much more than Dallas, I'd like to think we should get even more than that really. I dunno, no real precedent for this kinda thing, but if teams are getting 3, 4 and 5ths for losing players in FA, I'd think we should get much more than that. Maybe a 1st and a 2nd? I dunno.

[hoosiers]

http://www.footballoutsiders.com/und...-uncapped-year

This article is pretty telling.

In his infamous $100 million contract of 2009, Haynesworth had a $21-million option bonus. As part of the deal, the Redskins reserved the right to convert that option bonus to a signing bonus, and that’s exactly what they did. But they converted it with a slight twist. Not only did they convert the option bonus to a $21-million signing bonus, but they also added a voidable provision. In the provision, if Haynesworth pays back $26 million of his signing bonuses, then the 2011-2014 contract years void away. From a team salary accounting standpoint -- because the voidable is solely in the player’s control -- the proration of the signing bonus does not go into 2011-2014. That means all of the $21 million signing bonus counts in the uncapped year of 2010. As a result, Haynesworth’s team salary number in 2010 went from $8.8 million to a whopping $25.6 million. His subsequent team salary numbers are $6.4 million, $8.2 million, $10 million, $10.8 million, and $12.8 million, respectively.

I do not really understand the collusion aspect to this if the restructurings did not alter the player's compensation. Hayneworth's restructured contract pays Haynesworth substantially (if not exactly) the same amount, but the conversion of the signing bonus to option bonus with a player voidable provision allows the entire $21M bonus to count in 2010. Hall's restructuring is substantially the same. The Redskins are being penalized for altering future year salary cap bonus pro-ration with the restructurings.

Brilliantly, the author foreshadows the issues today with this conclusion:

As I’ve previously written, given the uncertainty of what 2011 holds, clubs who take advantage of the uncapped year by incurring high team salaries in 2010 run the risk of possibly being penalized in 2011 as part of a new salary cap and CBA. Clearly, this is a risk the Redskins are willing to take -- or perhaps they know something the rest of us don’t.

Now, the author does hint that Allen did something similar in Tampa. And others have posted articles where other teams (Chicago - Peppers) deliberately stashed tens of millions of dollars in 2010. Again, I understand the league's basis for punishing the Skins, it just seems the punishment should be applied evenly to other teams that deliberately stashed cap $ into 2010 and should also account for pro-rating the $36M over 2010 and 2011 to reduce the punishment to be in line with the benefit.

[allstar1579]

http://www.footballoutsiders.com/und...-uncapped-year

This article is pretty telling.



I do not really understand the collusion aspect to this if the restructurings did not alter the player's compensation. Hayneworth's restructured contract pays Haynesworth substantially (if not exactly) the same amount, but the conversion of the signing bonus to option bonus with a player voidable provision allows the entire $21M bonus to count in 2010. Hall's restructuring is substantially the same. The Redskins are being penalized for altering future year salary cap bonus pro-ration with the restructurings.

Brilliantly, the author foreshadows the issues today with this conclusion:



Now, the author does hint that Allen did something similar in Tampa. And others have posted articles where other teams (Chicago - Peppers) deliberately stashed tens of millions of dollars in 2010. Again, I understand the league's basis for punishing the Skins, it just seems the punishment should be applied evenly to other teams that deliberately stashed cap $ into 2010 and should also account for pro-rating the $36M over 2010 and 2011 to reduce the punishment to be in line with the benefit.

The collusion is that the owners tried to make an unwritten agreement to not do what the Skins and Cowboys (and I imagine some other teams) did which was dump dead cap space in the uncapped year to free up room later, jettisoning bad contracts. The problem with unwritten agreements is that you can't enforce them because without something in writing it is considered colluding and not a rule. Then they bully the PA into signing off on the deal by threatening to lower the available cap for ALL teams unless they agree to the punishment of these two teams. THEN this idiot Mara basically comes out and admits to all of this.

It's going to be a mess, and I'm no lawyer, but I'm guessing some of our resident experts could make a heck of a case out of this.

[Miller192]

http://www.footballoutsiders.com/und...-uncapped-year

This article is pretty telling.



I do not really understand the collusion aspect to this if the restructurings did not alter the player's compensation. Hayneworth's restructured contract pays Haynesworth substantially (if not exactly) the same amount, but the conversion of the signing bonus to option bonus with a player voidable provision allows the entire $21M bonus to count in 2010. Hall's restructuring is substantially the same. The Redskins are being penalized for altering future year salary cap bonus pro-ration with the restructurings.

Brilliantly, the author foreshadows the issues today with this conclusion:



Now, the author does hint that Allen did something similar in Tampa. And others have posted articles where other teams (Chicago - Peppers) deliberately stashed tens of millions of dollars in 2010. Again, I understand the league's basis for punishing the Skins, it just seems the punishment should be applied evenly to other teams that deliberately stashed cap $ into 2010 and should also account for pro-rating the $36M over 2010 and 2011 to reduce the punishment to be in line with the benefit.

I don't think you can convince many people that the Redskins structured Haynesworth's contract to take advantage of an uncapped year. The Redskins ultimately paid him 21MM in cash for two seasons. I don't even think the Redskins would've anticipated that happening.

Many bad apples have the same language in their contracts. It gives the team the obvious out should a player start stepping on necks again.

But you're absolutely right that other teams should be punished. To me, this is a driven effort by John Marra to reel in two high spending division rivals.

You've got to look at both sides of the coin with respect to underspending as well. I think it's pretty clear that the NFL signaled to teams to use the uncapped year to their advantage but don't over do it. Particularly how rampant it was.

[hoosiers]

I don't think you can convince many people that the Redskins structured Haynesworth's contract to take advantage of an uncapped year. The Redskins ultimately paid him 21MM in cash for two seasons. I don't even think the Redskins would've anticipated that happening.

http://sportsillustrated.cnn.com/200...eagency/2.html

Not to call out Miller in particular, but the some folks may want to familiarize themselves with the original 2009 contract. And to clarify from the above, Haynesworth was paid nearly $36M in cash for the two seasons.

The deal, as announced, was for $100M over 7 seasons with incentives taking the deal to as much as $115M. The core of the deal was 4 years at $48M with $41M guaranteed (presumably the first three years). Of this amount, $32M was scheduled to be paid in the first 13 or so months- $5M as a signing bonus, $6M as 2009 salary, $21M bonus in April 2010. The remainder was salaries of $3.6M in 2010, $5.4M in 2011 (gets one to the $41M guaranteed) and $7.2M in 2012 plus any incentives for Pro Bowl, staying in shape, etc. In this original contract, the $21M bonus was to be pro-rated over the balance of the contract.

I am not sure how one can look at the contract restructuring in 2010 as anything other than a deliberate attempt to stuff future cap space (from the $21M bonus in the original contract) into 2010.

[Miller192]

http://sportsillustrated.cnn.com/200...eagency/2.html

Not to call out Miller in particular, but the some folks may want to familiarize themselves with the original 2009 contract. And to clarify from the above, Haynesworth was paid nearly $36M in cash for the two seasons.

The deal, as announced, was for $100M over 7 seasons with incentives taking the deal to as much as $115M. The core of the deal was 4 years at $48M with $41M guaranteed (presumably the first three years). Of this amount, $32M was scheduled to be paid in the first 13 or so months- $5M as a signing bonus, $6M as 2009 salary, $21M bonus in April 2010. The remainder was salaries of $3.6M in 2010, $5.4M in 2011 (gets one to the $41M guaranteed) and $7.2M in 2012 plus any incentives for Pro Bowl, staying in shape, etc. In this original contract, the $21M bonus was to be pro-rated over the balance of the contract.

I am not sure how one can look at the contract restructuring in 2010 as anything other than a deliberate attempt to stuff future cap space (from the $21M bonus in the original contract) into 2010.

I'm not speaking to the restructure of the contract but the original player option clause. Clearly, the restructure was to take advantage of the uncapped year.

The Redskins signed him to a player option to protect themselves, not to dump and cut him in 2010.

Thanks for the clarification of the 36MM. I didn't realize it was that much.

[CrimsonTribe]

http://sportsillustrated.cnn.com/200...eagency/2.html

Not to call out Miller in particular, but the some folks may want to familiarize themselves with the original 2009 contract. And to clarify from the above, Haynesworth was paid nearly $36M in cash for the two seasons.

The deal, as announced, was for $100M over 7 seasons with incentives taking the deal to as much as $115M. The core of the deal was 4 years at $48M with $41M guaranteed (presumably the first three years). Of this amount, $32M was scheduled to be paid in the first 13 or so months- $5M as a signing bonus, $6M as 2009 salary, $21M bonus in April 2010. The remainder was salaries of $3.6M in 2010, $5.4M in 2011 (gets one to the $41M guaranteed) and $7.2M in 2012 plus any incentives for Pro Bowl, staying in shape, etc. In this original contract, the $21M bonus was to be pro-rated over the balance of the contract.

I am not sure how one can look at the contract restructuring in 2010 as anything other than a deliberate attempt to stuff future cap space (from the $21M bonus in the original contract) into 2010.

It's obvious that they were deliberately attempting to stuff salary into 2010. That's because 2010 was UNCAPPED. If the Skins stuffed salary into 2010, this would open up future cap space, which equals more salary (revenue) to the players. If every team did this it would shift tons of revenue to the players. The league did not want this so they created a de facto salary cap, which is directly in contravention of the spirit of an uncapped year. This had nothing to do with future competitive balance and everything to do with keeping future revenue from shifting to the players.

[hoosiers]

It's obvious that they were deliberately attempting to stuff salary into 2010. That's because 2010 was UNCAPPED. If the Skins stuffed salary into 2010, this would open up future cap space, which equals more salary (revenue) to the players. If every team did this it would shift tons of revenue to the players. The league did not want this so they created a de facto salary cap, which is directly in contravention of the spirit of an uncapped year. This had nothing to do with future competitive balance and everything to do with keeping future revenue from shifting to the players.

We can go in circles with this. I see no de facto salary cap issues in 2010 (since nothing changed in how Haynesworth was paid in 2010) and I do not see a team stuffing "salary" into 2010 (since we are talking bonus $).

I see a team restructuring contracts to change the accounting for a contractually guaranteed bonus with no real new benefit conveyed to the player - somewhat of a "sham transaction".

I appreciate your points. We'll see what the arbiter decides is the spirit of an uncapped year.

P.S. Another point not mentioned is whether the Skins would have acted differently in 2010 knowing then what they know now. Perhaps Haynesworth made a settlement offer so that he would be released or perhaps the Skins would have accepted a trade offer.

[JDubs]

It's obvious that they were deliberately attempting to stuff salary into 2010. That's because 2010 was UNCAPPED. If the Skins stuffed salary into 2010, this would open up future cap space, which equals more salary (revenue) to the players. If every team did this it would shift tons of revenue to the players. The league did not want this so they created a de facto salary cap, which is directly in contravention of the spirit of an uncapped year. This had nothing to do with future competitive balance and everything to do with keeping future revenue from shifting to the players.

Amen, brother. It's Labor Law 101.

[Miller192]

We can go in circles with this. I see no de facto salary cap issues in 2010 (since nothing changed in how Haynesworth was paid in 2010) and I do not see a team stuffing "salary" into 2010 (since we are talking bonus $).

I see a team restructuring contracts to change the accounting for a contractually guaranteed bonus with no real new benefit conveyed to the player - somewhat of a "sham transaction".

I appreciate your points. We'll see what the arbiter decides is the spirit of an uncapped year.

P.S. Another point not mentioned is whether the Skins would have acted differently in 2010 knowing then what they know now. Perhaps Haynesworth made a settlement offer so that he would be released or perhaps the Skins would have accepted a trade offer.

Players are routinely restructured to create cap space for the team with no real benefit to the player. The Steelers just did it with player approval. Teams are also allowed to do a simple restructure where the player doesn't have to consent to it as long as the monetary value of the contract is unchanged.

Just to note, I don't believe that teams should be allowed to do what the Cowboys and Skins did. However, the NFL should've had the foresight to prevent it as they prevented other advantages of the uncapped year. Without any language in the CBA to prevent it, the owners move forward in an uncapped year at their own risk.

[mweb]

It's obvious that they were deliberately attempting to stuff salary into 2010. That's because 2010 was UNCAPPED. If the Skins stuffed salary into 2010, this would open up future cap space, which equals more salary (revenue) to the players. If every team did this it would shift tons of revenue to the players. The league did not want this so they created a de facto salary cap, which is directly in contravention of the spirit of an uncapped year. This had nothing to do with future competitive balance and everything to do with keeping future revenue from shifting to the players.

Yep. I'm really baffled at why there is a debate about this. It's rather cut and dry and it's clear there was collusion. If you think the league was right to collude, well that's one point, but there shouldn't be a debate if they did or not.

[hoosiers]

http://www.nationalfootballpost.com/Cap-Control.html

A pretty good football writer's take on the situation.

[JDubs]

That article didn't mention collusion once, thus missing the point.

[allstar1579]

That article didn't mention collusion once, thus missing the point.

Yeah we aren't going to see articles about collusion because that's a pretty serious offense that you need some kinda hard proof to mention the collusion thing. It's pretty obvious that it happened but it wont be mentioned until someone comes out and says, yes, we as owners decided to do this for this reason...which won't happen.