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Goodbye to Charles Woodson?
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<blockquote data-quote="HardRightEdge" data-source="post: 472131"><p>In-season bonuses, such as roster bonuses and per game bonuses, count against the cap, and they count in the year in which they are earned.</p><p> </p><p>On the other hand, signing bonuses are prorated over the term of the contract for salary cap purposes. If a player is cut, the full remaining balance of the prorated signing bonus counts against the cap in the year the guy is cut.</p><p> </p><p>Simple example:</p><p> </p><p>A guy is signed for 5 years, $50 million, which includes a $15 million signing bonus and $7 mil per year base salary. The $15 million in signing bonus is prorated over the 5 years for cap purposes, or $3 million per year.</p><p> </p><p>In the first year of the contract, the guys is paid $22 million in cash ($15 mil signing bonus + $7 mil salary), but the cap hit in the first year is $10 mil ($3 mil prorated signing bonus + $7 mil salary). If the guy plays out the full 5 years, the cap hit will be $10 mil per year in each successive year.</p><p> </p><p>If the guy is a bust and he's cut after the first year of the contract, the team gets a $12 mil cap hit in year 2 (the remaining 4 years of the prorated signing bonus) even though the guy is no longer on the roster. They call this "dead cap" space. It would cost you more in cap space to cut him than to keep him in year 2 of this contract.</p><p> </p><p>This is one reason why guys who sign deals with big signing bonuses but end up stinking up the ball yard are kept around for a few years...teams would rather hope for a turnaround than take the dead cap hit.</p><p> </p><p>In Woodson's case, it looks like the cap hit is around $10 mil per year for 2013 and 2014...I don't see evidence of a big signing bonus being worked off cap-wise.</p><p> </p><p>Any cash money that passes from the team to a player counts against the cap sooner or later, with the possible exception of injury settlements...I don't know how they handle those, but they're almost always modest sums.</p></blockquote><p></p>
[QUOTE="HardRightEdge, post: 472131"] In-season bonuses, such as roster bonuses and per game bonuses, count against the cap, and they count in the year in which they are earned. On the other hand, signing bonuses are prorated over the term of the contract for salary cap purposes. If a player is cut, the full remaining balance of the prorated signing bonus counts against the cap in the year the guy is cut. Simple example: A guy is signed for 5 years, $50 million, which includes a $15 million signing bonus and $7 mil per year base salary. The $15 million in signing bonus is prorated over the 5 years for cap purposes, or $3 million per year. In the first year of the contract, the guys is paid $22 million in cash ($15 mil signing bonus + $7 mil salary), but the cap hit in the first year is $10 mil ($3 mil prorated signing bonus + $7 mil salary). If the guy plays out the full 5 years, the cap hit will be $10 mil per year in each successive year. If the guy is a bust and he's cut after the first year of the contract, the team gets a $12 mil cap hit in year 2 (the remaining 4 years of the prorated signing bonus) even though the guy is no longer on the roster. They call this "dead cap" space. It would cost you more in cap space to cut him than to keep him in year 2 of this contract. This is one reason why guys who sign deals with big signing bonuses but end up stinking up the ball yard are kept around for a few years...teams would rather hope for a turnaround than take the dead cap hit. In Woodson's case, it looks like the cap hit is around $10 mil per year for 2013 and 2014...I don't see evidence of a big signing bonus being worked off cap-wise. Any cash money that passes from the team to a player counts against the cap sooner or later, with the possible exception of injury settlements...I don't know how they handle those, but they're almost always modest sums. [/QUOTE]
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