Per Game Roster Bonuses and Injured Reserve

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I had a few questions on players going on IR that have roster bonuses paid per game and how they are treated against the salary cap so its a good topic to touch on. In the last two weeks we have seen Dwight Freeney and Ahmad Bradshaw both go on the IR for their respective teams. In the case of Freeney he had $31,250 in weekly roster bonuses while Bradshaw had $40,625 in weekly bonuses per information I had on the two players contracts.

To determine the salary cap savings for a team the first thing that we need to do is identify the “likely to be earned” portion of a players roster bonus. That portion would be based on games played in 2012( assuming that the bonus is paid for games on the active 46 man roster, which I believe is the case here). For both players that was 14 games, so that makes Freeney’s LTBE charge $437,500 and Bradshaw’s $568,750.

From there we determine the money that was actually earned, which is calculated by games played multiplied by the weekly bonus. Freeney played in 4 games while Bradshaw suited up for 3. That will make the actual earnings just $125,000 and $121,975 respectively. The cap savings are the LTBE charge minus the actual earnings. That works out to be $446,875 for the Colts and $312,500 for the Chargers.

The League, as far as I know, will not credit with teams with the cap savings in the current league year. What they will do is use the money to offset NLTBE incentives that were actually earned by other players at the end of the year and then make an adjustment to the salary cap for each team the following season to reflect the numbers.

So to make a long story short the injuries to  the two players will not effect this years cap but will help the Colts and Chargers have higher salary cap limits than other teams in the NFL in 2014.

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State of Rebuild – San Diego Chargers

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How do you build a winning football team?  Over the next few weeks I am going to look at a handful of teams that are either relatively early in their rebuilding process or on the verge of a possible rebuild.  The purpose of this is not to reflect on past regime decisions compared to the current decisions but rather to start the analysis from day one and evaluate personnel decisions along with contract structures and styles to see if certain trends help produce a winning franchise.

TelescoState of the Franchise and Front Office

The San Diego Chargers have continued to uphold their label as one of the NFL’s biggest underachievers.  After going 13-3 in 2009, the Chargers have since failed to win 10 games or make the playoffs.  Despite going 4-2 against AFC West division opponents, the Chargers finished the 2012 season a disappointing 7-9.  While not seemingly rebuilding, the Chargers did shake up the organization after another lackluster campaign in 2012.  Tom Telesco replaces longtime General Manager A.J. Smith, while Mike McCoy replaces Norv Turner as Head Coach.

 

Contract Strategies and Trends

With only one offseason of data, the sample size for how new GM Tom Telesco will structure his contracts is quite small.  Under former GM A.J. Smith, the Chargers rarely structured any contracts with roster or workout bonuses, with Nick Hardwick being the only player on the roster brought in by A.J. Smith not under his rookie contract receiving a roster bonus.  Hardwick is due a $500,000 roster bonus in 2013 and 2014.  Thus far, Telesco has utilized roster bonuses much more than his predecessor.  Free Agent acquisition Derek Cox is due a $300,000 roster bonus in 2014, 2015, and 2016 as part of his 4-year/$20 million deal and Dwight Freeney is also due a roster bonus of $500,000 in 2013 and $1 million in 2014 as part of his free agency deal after Melvin Ingram went down earlier this offseason with a torn ACL in his left knee.

Freeney’s $500,000 roster bonus in 2013 and $500,000 of the $1 million dollar roster bonus in 2014 are actually per game roster bonuses of $31,250 per game.  For salary cap purposes, the roster bonus is treated as a LTBE incentive.  Because Freeney played in 14 games in 2012, his 2013 roster bonus cap hit is currently $437,500 ($31,250 x 14).  This setup is an extremely team friendly mechanism for the Chargers.  The per game roster bonus works just like a standard P5 salary except the P5 is still fully guaranteed in the event of injury or deactivation while the per game roster bonus is not.  If Freeney plays all 16 games this year, his actual cap hit will be adjusted upwards after the season to the full $500,000 ($31,250 x 16) and if he plays less than 14 games, for example 0, his cap hit will be adjusted downwards after the season to $0 ($31,250 x 0).

Telesco has also been more proactive in using workout bonuses.  Last years third round pick Brandon Taylor is the only player on the roster from the A.J. Smith era who received a workout bonus.  Under Telesco, free agent acquisitions King Dunlap and Johnny Patrick, along with rookie wideout Keenan Allen, received workout bonuses in their new deals.

 

Philip RiversBiggest Upcoming Roster Decision

Is Philip Rivers still the future of the Chargers?  Once regarded as one of the bright young superstars under center in the NFL, Rivers has come under increased scrutiny after back-to-back subpar seasons.  With two years and just under $31 million left on his current deal, it would appear at first that Telesco’s hands are tied with his options at quarterback.  A closer look reveals that it’s quite an easy feat to accomplish if Telesco wanted to move on from Rivers and hand pick his own quarterback after the 2013 season.  Rivers has a cap hit of $15 million in 2014 and $15.75 million in 2015 but nearly all of the money in both years is unguaranteed P5 salary.  With only a $1.2 million hit of dead money in 2014 and no dead money hit in 2015, the cap effects of moving on from Rivers after 2013 would be negligible.

However, barring a catastrophic injury or an incredibly disappointing season, I do not see the Chargers moving on from Rivers.  An inept offensive line has failed to give Rivers a clean pocket consistently or provide any sort of viable running game.  If incoming first rounder D.J. Fluker can lock down the Right Tackle position and allow Jeromey Clary who struggled at Right Tackle to help shore up the Right Guard position, the right side of the offensive line might actually become a strength of this team rather than one of its biggest weaknesses.  With the potential upgrade to even adequate offensive line play, Rivers should look more like the top-tier quarterback we are accustomed to and less like the mediocre version we have watched over the past two seasons, making Telesco’s possible decision easy.

It is worth noting that Telesco is no stranger to franchise altering quarterback decisions.  During Telesco’s first season as an area scout with the Colts in 1998, the Colts drafted now division rival quarterback Peyton Manning 1st overall and was also part of the decision making process that landed 1st overall pick Andrew Luck in Indianapolis in 2012 before Telesco joined the Chargers this year.  While I do not think Telesco ultimately moves on from Rivers after the 2013 season, it is certainly an available option.

 
Ryan Feder
Tulane University Law School
J.D. Candidate 2015
@RyanFeder
rfeder1@tulane.edu

The 49’ers Get a Bargain with Justin Smith

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The numbers became official today for DE Justin Smith and his two year extension with the 49’ers- 2 years at an average of $4.35 million a season. By many accounts it is a very team friendly contract but I may as well add my two cents in on the topic as well.

The three obvious comparison points here are the contracts signed by John Abraham in 2012 and Osi Umenyiora and Dwight Freeney in 2013 and we will use these deals as a point of reference. But before we present the contracts I want to make a point that while the stated guarantee on Smith’s new deal is $9.56 million in reality he was going to be on the 49’ers in 2013 and the $7.5 million base salary for the year was going to be earned. For that purpose we will only consider the contract to contain $2 million in new money guarantees. Here are how the dollars stack up:

Name

Age

Years

APY

1st Year Cash

Guarantee

John Abraham

34

3

$5,833,333

$4,500,000

$2,250,000

Dwight Freeney

33

2

$4,375,000

$5,250,000

$4,750,000

Osi Umenyiora

32

2

$4,250,000

$5,000,000

$3,750,000

Justin Smith

34

2

$4,350,000

$4,650,000

$2,000,000

Clearly the value of the extension was designed to fit between the Umenyiora and Freeney contracts. Abraham is no longer in the NFL having been released from his contract after one season. Smith will earn less than both Umenyiora and Freeney in first year extension compensation and has a higher probability of not seeing that money due to a limited guarantee in his extension years.

Smith should have had far more leverage than either Freeney or Umenyiora had even factoring in age and his triceps injury from last season.  Here is the base statistical breakdown of the players:

Name

Snaps

Sacks

Tackles

Dwight Freeney

768

5

12

Osi Umenyiora

653

6

43

Justin Smith

1018

3

66

Despite playing from a non-rush position Smith did generate 3 sacks and significantly more tackles than either Freeney or Umenyiora.  It is also worth nothing that Smith has made 4 straight Pro Bowls and was a 1st and 2sn team All Pro in 2012 and 2013. Freeney’s last Pro Bowl was in 2011 and All Pro season in 2009. Umenyiora was a 2nd team All NFL player in 2010.

One of the big reasons for the increased production and postseason honors is because Smith is a full time player as evidenced by his snap count being over 1000 last season. The other two are situational players. In terms of financial planning that means when you sign Justin Smith you only need to sign Justin Smith. When you sign either of the other players you need to also sign a rotational player to make up for the 400 snaps when they will not be on the field. Most likely it means a cap hit ranging from $555,000 to $1.25 million for the role player, making the true spend on the other two players closer to $5 million a year and $6 million in first year cash. Rather than being awarded for his durability Smith was not. If we place their dollar value on per snaps played Smith is the clear loser.

Name

Per snap APY

Per snap Guar

Per Snap 1 year cash

Dwight Freeney

$5,697

$6,185

$6,836

Osi Umenyiora

$6,508

$5,743

$7,657

Justin Smith

$4,273

$1,965

$4,568

At a minimum he should have been earning $6 million a year with $7 million paid out in the first year of which $6 million was guaranteed just by taking him as an equal player to the other two. Factoring in the actual performance each of those numbers should be bumped by at least $1 million. It’s a bargain basement contract for a premier player.

Smith should have had even more leverage based on the 49’ers salary cap situation. As we discussed last month the 49’ers did not have enough cap room to function in the 2013 NFL season. Suggested moves were extending Smith or perhaps extending S Donte Whitner or CB Tarell Brown.  With limited cap upside to the latter moves, barring a release,  Smith should have been in a position to either get large guarantees in 2014 or two funny money void seasons in return for playing nice with the salary cap.

Smith was in a position to hold the 49’ers feet to the fire due to the cap. Freeney was allowed to play his deal out on a monster 2012 cap figure while Umenyiora simply took a void year and a slight raise to help the Giants out with their salary cap in 2012.  Like Smith, Umenyiora fired his agent to get that contract done himself, a contract that was far more player friendly due to the void year than this one. Instead Smith chose option C which was to do everything in his power to help the team and get almost no raise in the process. Smith was scheduled to earn $8 million in 2013- he will now earn $8.1 million.

While the particulars of the contract have not been made public in regards to the roster bonuses, my experience with the 49’ers and salary cap in general would tell me that $400,000 per year is probably tied to being on the active 53 man roster. Freeney’s contract contains similar incentives and Umenyiora’s deal with the Giants in 2012 also contained such provisions. At least part of the roster bonuses, according to Corry,  are capable of being turned into a signing bonus to further lessen the cap burden in the future if needed without having to go back to the bargaining table if Smith again has an All Pro caliber year and looks for more money to be a salary cap aide. The Niners hold all the cards.

As fans we often get wrapped up in the negative side of the money equation focusing on the players who get big money and then fail to perform to the level of the contract. Sometimes we should focus on a player like Smith who potentially gave away millions for the chance to win a Super Bowl and finish his career in a specific city. This is not the first time Smith has done this. Smith agreed back towards the end of the prior CBA to a void/buyback provision in his contract that allowed the 49’ers to use up their remaining cap space in the final capped year and reduce his cap charges once the cap returned in 2011. Smith gave up his dead money protection from release in future contract years by agreeing to the restructure.

Smith has really been a bigger behind the scenes help to the 49’ers than most will realize. The decision to buy in back in 2009 has helped San Francisco with their cap in 2011 and 2012 and now  he is helping them again in 2013 and 2014 with a very team friendly contract. Regardless of the how the 49’ers season turns out it will likely be better simply because of Smith’s willingness and desire to remain in San Francisco and “play ball” with the 49’ers front office n their terms. Very few players would be willing to do that. Smith has time and time again.

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