FanPost

AFC West - Is Strategic economic cap warfare on the horizon


Did it already start with the TJ early signing.

OK, foolish me I got to looking at salary cap structure rules in the NFLPA and then couldn’t help but look at them in regards to the cap position of our division. First to show Our position of financial strength but also to look at the potential for some strategic economic warfare on division player value. As a result of suffering through the deconstruction we are financially in a position I don’t believe any NFL owner considered possible when negotiating the NFLPA. And it puts us in full position to not spread costs of player signings via big bonuses, but instead to fix them to specific years in guaranteed salary. Now as we develop players we consider long term talent I also have no doubt we will use the spreadable nature of bonuses to resign them. Which creates some backload. We are in truly an advantageous position thanks to the deconstruction. Something No owner except perhaps Al saw when it was signed. The advantages of deconstruction.

Since I was looking at it, I figured why not type it up for all of you to look at and perhaps come to a different conclusion than me. Typo's are your problem this work was free.

The key sources of data were Over the Cap, Spotrac(free agents by year) and my focus was on this provision of the NFLPA which got me thinking of how Reggie could spread not spread money he spends.

"Proration. The total amount of any signing bonus shall be prorated over the term of the Player Contract (on a straight-line basis, unless subject to acceleration or some other treatment as provided in this Agreement), with a maximum proration of five years, in determining Team Salary and Salary, except that:"

And this one within the definition of bonus(It effectively defines the salary differential between a frist years contract and a second years contract which if present forces a spreading across years(Potential dead money on cutting):

"(5) The difference between the Salary in the second contract year and the first contract year when Salary in the second contract year is less than half the Salary called for in the first year of such Contract; "

A final caveat, I did not analyze cut savings and every team has them. However dropping depth I believe weakens people if done for cap space vs poor play.

Top 51 salary cap

Data: over the cap

2014

2015

2016

Raiders

$59,425,888

$42,437,059

$36,478,373

Chiefs

$122,083,251

$116,549,966

$49,183,631

San Diego

$122,766,362

$87,372,043

$23,617,854

Denver

$117,495,501

$72,214,124

$49,306,660

From this table you can see the clear long term salary and therefore Contract structuring advantage the raiders now have within the division. In both 2014 and 2015 our opponents and in particular the Kansas City Chiefs already have limited flexibility. While I don’t care to analyze the termination penalties of trying to cut existing contracts to make room for key signings it’s clear the raiders have an advantage in acquiring structuring key talent. Not only that we can use the treasured salary line not Bonus spending to do so. In general with relatively punitive and undesirable exceptions to one party of a contract or another (Bonus money has to be prorated over up to the five year life of a contract- NFLPA Pg. 93).

Reggie on the other hand can guarantee salary to structure lucrative deals for players that front end hit in 2014 and 2015 and has every incentive to do so. The need to hit the 89% threshold. Our opponents in signing deals have big numbers in 2015 to give them headaches and to limit cap hits in this year HAVE to use bonuses that will then make their 2015 and 2016 numbers worse. A simple example. We can all agree Decker is a high value receiver who likely will command a 6-7 maybe 8 with cap inflation that just occurred million a year average ballpark. So a being on the roster bonus payable in say 2016 would be most likely considered a likely occurance and force spreading early not in 2016 when the condition was met). This even further limits contract flexibility by Denver. Decker almost has to leave Denver unless he gives a sweet home town discount and Denver with far more money on offense vs defense have to let him go. KC looks to be in a financial quandary with even greater limited flexibility than Denver.

KC based on there two year numbers is limited in long term deals and really can’t make any high profile FA receivers or tackles or anything else much of a deal. Their team will have to grow in the draft or with 1 years.

Denver has a good second year picture, that makes them vulnerable due to key names they are losing if they don’t resign and may but probably won’t due to elway the offense snobs proclivities get better on defense. Denver doesn’t pay defense well unattractive free agent location if any agent explains it to them and doubts of Dumerville will also probably play.

San Diego is in a slightly worse cap situation to Denver. Long term strength potential highly questionable as is Denvers.

How to Use our Advantage to Strategically Harm our rivals.

First, Reggie has already made one such move with the advance signing of Taiwan Jones in a contract year in which KC has to resign Dexter McCluster and Denver has to sign restricted free agent(Means they get to meet beat his best offer) Trindon Holliday. Two special teams return aces that help make TJ the gunner valuable as few have the speed to be in position to force these men to move laterally not vertically. Now their agents get to argue the value of their players vs division rival Taiwan Jones. Keep in mind the 2014 numbers for both Denver and KC don’t include these key special teamers. Reggie signed a 3 year 4.355 million dollar extension as an agent will argue it or 1,435,000 a year. Impact to raiders cap as structured at 1,125,000 a year. Clearly both Trindon’s and McCluster’s agents will use this argument as an indicator of their value with McCluster on the receiver side(On a receiver weak team, in a receiver heavy draft) arguing he is even more valuable. Trindon will use it for his base. Further Trindon’s agent will argue he deserves at least an $800K signing bonus to match TJ and McClusters that his must exceed it. Numbers the teams will have to spread into forward years and first year. Denver’s salary cap is further compromised in regards to signing offensive crossovers as much of their cap hit is offensive while little is defensive. Our rivals either pay more than they should negatively impacting their future cap or they let these absolute threats on special teams walk.

Now lets consider who the key players are that each team austensibly needs to retain.

2014 Free Agents Denver with 2013 Salary (These guys aren’t taking pay cuts and aren’t in numbers above) (All under 28 years old, yes age discrimination on analysis part)

Denver

KC

SD

Raiders

Knowshon Moreno

3,287,000 (gone)

Branden Albert

(9,800,000) (Gone)

Cam Thomas

(1,323,000)

Vance Walker

(2,000,000)

Eric Decker

1,506,037

Tyson Jackson

(7,200,000)

Danario Alexander

(1,800,000)

Jared Veldheer

(1,546,750)

Wesley Woodyard

3,250,000 (need to keep may not)

Dexter McCluster

(1,400,000)*

Charlie Whitehurst (31)

(1,800,000) Probably gone draft rivers replacement security (carr,mettenb,garrapolo)

Houston(we have a problem)

1,078,750

Dominique Rodgers Cromartie

2,900,000

Jon Asamoah

(1,551,000)

Rashad Jennings

(555,000)

Trindon Holliday

480,000

Tracy Porter

1,406,250

Duke Ihenacho

480,000

Mike Jenkins

(1,500,000)

Pat Sims

(2,000,000)

Denver,

14 mill under the 2014 cap(420K value of 51st player salary) needs to sign rookie class keep woodyard or replace woodyard and strengthen defense. Ihenacho they have to keep and pay with a bonus. Holliday may well leave our division. Cromartie may be available for or resigning tanks their move potential forces bailey cut. Reggie can cause them all kinds of longer term chaos in our defensive signings. Champ bailey looks to have a low cut penalty 10 million in cap relief and due a roster bonus could give them 25 mil to spend and a great need to improve defense. Only 2 defensive players in top 10 salary. Likely cut to make defensive improvements? Many key signings in 2015. Team should improve in 2015 despite losing decker to add defense.

KC,

8 mil under cap needs 2 mill emergency cushion and singings of first 3 rounds. Their top 51 low salary is 420K needs to resign few and needs to strengthen WR corp. They can’t afford to let mccluster go and overpay using Bonus to stretch impact harming future year ability to move. Bring in another mid range FA and done. Or go higher end FA and dump mccluster. Plus need a backup tackle badly with albert going. Not in our way we can cause chaos and already have. 6 defensive players in top 10 cap hit.

San Diego

8 mill under the cap this year well positioned as is Denver in 2015. Really should be able to keep who they want with limited number of FA. Need to improve o-line (Branden albert from KC?) Phillip rivers contract not due till 2016. Defense another need. Can’t afford to compete with reggie however in defensive market, and reggie could surely look to talk with the agents of likely talent and drive the price tag a bit. 4 defensive players in top 10 cap hit.

Raiders – 52 players under contract, 51 salary bottom 420K, 5 defensive players in top 10 cap hits. Need bodies has money but a lot of 1 year starters to replace in the bird dog seat but having a ton of work to do. Agents will be eager for calls from the raiders…

2015 Free agents by team

Denver

KC

SD

Raiders

Champ Bailey

Alex Smith

Jerome Clary

D.Mo

Von Miller

Justin Houston

Nick Hardwick

Lil Wiz

Wes Welker

Rodney Hudson

Eddie Royal

T Pryor

Damaryius Thomas

Joe McKnight

Dwight Freeney

D. Ausberry

Julius Thomas

Ryan Mathews

Andre Holmes

Terrance Knighton

Corey Liuget

R Streater

Danny Woodhead

M King

Chance Casey

Denver

If Bailey survives 2014 there will be little incentive for a big contract. Miller will be a critical re-sign as a pass rusher and undoubtedly with Houston also in the division it will become hard for both teams to sign them. Both players will want to be the highest paid pass rusher in the division at the least, both will argue they should be the highest paid in the NFL. And whatever contract scale we set with our pass rusher signing this year could cause them headaches. Both teams will be paying out the nose on that contract and neither can let the player get to FA. As Denver is in a better cap position they may shaft KC and price them into cap hell with the need to resign Alex Smith as well.

KC

Have to get Alex Smith resigned and Justin Houston. No choice. But their cap number for that year is already 116 million. If they do any long term deals in 2014 with their 8 million beneath cap they will close that window. KC may be young they also have cap.

San Diego

Has a good amount of talent to resign replace in 2015. Financially well positioned to do so. The Albert signing I expect them to make tightens it up.

Raiders

Lots of future talent on that list. With our cap space this year we can actually spread the cost of resigning them by doing what we did with TJ. Streater, Moore or Holmes most likely two of them get extensions during the season after we make FA moves. My guess Wiz and Streater get extended during the season to let the 2014 cap take some of the cap hit and make that hit lower in future years. Maintaining cap space moves.

How raiders 2014 signings impact the other teams.

Denver has two backfield players to sign in Cromartie and ihenacho. Their agents will be watching the Porter or Jenkins deals. With Elways proclivity to underpay defense so far in his GM career we may even be able to drive his prices up if he’s foolish enough to let some players hit FA or even steal Cromartie.

Free agent wise we are getting a pass rusher I think. That contract will loom large for Denver and KC next year. Reggie can do what they can’t use guaranteed salary in year one and year two with lower contract values in years 3 and 4 and a trade escalator. That is he can make the total value of the contract right for the players desire. Be honest, we are looking to possibly draft a pass rusher to develop but you don’t have to worry. NFL cap rules provide that as long as the first years salary isn’t twice as much as the second (aka becoming a hiden signing bonus) we don’t have to spread the cost. Now if you are a football player that knows every year could be your last a frontloaded guaranteed salary with a trade option with an escalator is a sweet deal. If you are a team that may be drafting clowney or a development pass rusher with massive cap space it lets you put the contracts value in early years keeping later years clean. And the escalator doesn’t have to be so large you don’t end up with a very high reciprocal draft pick trade value on an older "elite" player that might just be the piece a contender wants. It’s also a strategy that can let you use free agents today but structure contracts that make cutting them trading them easier in later years when the talent you draft is ready to replace them. In other words a part of building through the draft while leasing very good free agents with high trade value contracts in later years.

I was surprised to see in looking at this that KC is clearly in a poor position to maintain strength. Denvers habit of underpaying defense clearly cost them a superbowl and until Elway proves otherwise I’m not sure he properly values defense.

San Diego is in a strong position but has needs. It’s easy to envision this division flipping over the next few years if Reggie gets good talent for the money. And hopefully uses his cap position to twist up our rivals.

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