Podcast: Q&A With a Focus on the Oakland Raiders

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Answering your questions as best I can on a number of subjects. Big focus on  the Oakland Raiders, but also questions on BJ Raji and the Packers, the New York Giants, as well as the cap strategies used by a number of teams.

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Podcast: QB’s, Cowboys, Raiders, Jets, Cap Management and More….

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Touching on the QB moves of the week plus some questions answered on the Cowboys, Jets, and Raiders. I think I have this set up for itunes now but Ill check that in the morning.

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The Financial Impact of Releasing Rolando McClain

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One of the recent reports coming out of Raider nation deals with the pending release of LB Rolando McClain, a 2010 draft selection who has, lets just say, not seen eye to eye with Oakland. McClain is a talented player but may be someone who proves to be uncoachable at this level. I think there have been a number of differing reports as to what happens if he is released so lets sort through it and  look at the mechanisms at play if McClain is released.

Having been a top 10 pick under the old CBA, McClain’s contract is pretty much a salary cap minefield filled with escalators and guarantees. McClain received an option bonus in 2011 of $12,100,000. That was prorated over the life of the contract. If cut the remaining unaccounted for money will immediately accelerate onto the salary cap. That amount is $7.26 million.

The Raiders would then have an option of how to account for that money. They could opt to have it all count in 2013 or they could designate McClain a June 1 cut. What the June 1 cut would do is allow them is to hold McClain on the books at his current cap charge of $6.675 million until June 1st at which point his cap number would reduce to $2.42 million in 2013 and he would then have a 2014 dead money cap number of $4.84 million.

From there the contract becomes significantly more complex. McClain has an additional $3.635 million in fully guaranteed salary that he is owed by Oakland. Because McClain is not yet a vested veteran he would be subject to the waiver claim process meaning 31 teams could claim his contract and the guarantees with it. The problem is what happens if no team claims him?

If no team was to claim McClain that money will immediately accelerate onto the Raiders cap making the charge right a touch below $10.895 million after applying a present value calculation. That makes waiving McClain an extremely risky prospect for the Raiders who would lose $4.22 million plus the cost of a replacement player off their current cap figure. That puts the Raiders right back in the danger zone for continued restructures. It was in my opinion why the Raiders did not waive him last year- their salary cap at the time could not absorb the charge associated with it if he went unclaimed.

While the June 1 designation is an option it would not apply to the guaranteed portion of his salary. Per the CBA:

Any portion of Salary guaranteed for any period after a player is released for a reason covered by the guarantee (e.g., future years’ guaranteed Salary, when the player is released for a reason covered by the guarantee) shall be immediately included in Team Salary at the time of his release at its present value rate calculated using the Discount Rate.

If designated a June 1 cut the Raiders would incur a cap charge of $6.055 million in 2013 and $4.84 million in 2014. While they would receive credits for that salary owed to McClain it will all be dependent on the timing of his signing or being claimed by another club. The possibility of a near $11 million dollar acceleration  that would cut their cap space in half would severely compromise the team in free agency, even if just on the books for a few days. Remember once March 12 rolls along the salary cap is active 24/7 so you cant jump the cap to make a signing even if you know an additional $3 million is coming off the books in a few days.

Unless the Raiders could work out a trade in which it was a guarantee that his contract was being taken on by another club I would think this uncertainty makes the June 1 release the only option for the team to maintain their $8+ million cap cushion during free agency. Unfortunately that means pushing more money into the future which is something the Raiders need to stop doing. Its just another level of complexity that comes with attempting to effectively manage the salary cap.

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Twitter Q&A and An Introduction- March 5

Well before we get started I’d like to introduce everyone to Jim who is one of the new contributing writers on the site. Jim is a big Raiders fan and an amateur capologist. He’ll be popping in from time to time with his thoughts on the cap and probably doing quite a bit of Raiders related posts, as the Raiders are always a hot salary cap topic. Unfortunately for Jim its rarely positive but one of these days it has to.  Onto the Q&A:

33,( who looks like a big Tony Dorsett fan)- Does the cap increase in the next several years? If so, how does this play into the process of cap planning?

Thats a great question and its one that I certainly can’t fully answer. While the cap does increase every year the projections seem to be that it will remain pretty flat even as the new TV contracts roll in. The union has had to make a number of concessions to get the cap to be even where it is today so my guess is there will be limited growth. That being said projections are nothing more than educated guesses and can change at ant time.

As for the second part of the question it absolutely plays a role. As the salary cap inflates so can contracts. It is far better for a team to shuffle cap dollars to the future because those cap dollars will, in theory, eat up much less of a percentage of the cap than they would in the present. Back in 2006 when the new CBA went into effect teams planned contracts with a certain projection in mind, but by 2007 when the cap begin rising substantially so did the pushing of money and contract values. The problem for teams now is that the cap remains at the same levels at 2009 but star player salaries keep rising. That was one of the points I was trying to make on the Flacco contract. When Eli Manning signed his record breaking deal worth $16.25 million it was on a cap of $123 million rising $5-6 million a year.  The pushing of salaries from that period have essentially made that contract worth nearly $21 million a year but, with a flat cap, it eats up a far larger percentage. To try to protect themselves from that reality the Ravens designed the cap hits of the contract to remain low for the next three years hoping that by 2016 the cap grows substantially making Flacco’s high end numbers seem more reasonable.

From @ross_christie- How much of a contract will a player actually get? Is it just the guaranteed money?

Depends on the quality of player and structure of the contract. If you look at our releases page you can get a good idea as to just how much players earn before being released. Most probably earn around 50% of the contract and in many cases that is because of the protection that was built into the contract. Players that have strong representation, especially those who negotiate with weaker front offices, are able to craft player friendly contracts that make it difficult to release the players. The fact that signing bonus money is prorated and all accelerates onto the cap if released provides another layer of contract protection besides just the fully guaranteed money.  A player that can negotiate a large signing bonus in conjunction with fully guaranteed salary will most likely earn more than players with more guaranteed money but no bonus protection. I would say that it is pretty rare for a player to actually play out his entire contract without ever having a paycut.

From @WeightyThings- For Bowe’s contract structure, what do you think their primary concern was in organizing it? Any player contracts coming up?

I think their main concern was getting a cap friendly deal in year 1, which they accomplished with a $4 million dollar cap hit in year 1. The Chiefs dont really have any cap issues on the horizon so they knew they could deal with the higher cap hits in years 2-5. This maximizes their chances to attract free agents and change the culture in Kansas City.

From @Dessedrengen- how is it possible for Dallas to get under 123.0 when they are at about 126 now, and then the cap penalty?(10mil$ if I guess)

The Cowboys cap penalty this year is $5 million and their adjusted cap, after carryovers, should be around $120.3 million. They did get under the cap for a brief moment before tagging Anthony Spencer. I estimate them to be around $5.6 million over the cap. I cant really see how they will get under the cap without extending Tony Romo. They were going to pay him  ton anyway, but I have a feeling it will be even more now. Romo has all the leverage in the world because Dallas has almost no other options as they have restructured almost everybody on the team. Statistically he can point to Flacco and state a case he deserves close to that, though Romo is older so I cant see that working. Other options would be to restructure Doug Free but he already has a large dead money hit close to $4 million in 2015 at which point his contract should void. Its ugly in Dallas and only going to get worse

From @WeightyThings(a 2nd questions)- Now that Tyson Jackson is back at 5.2 million, what is the Chiefs salary cap looking?

Sometimes initial reports can be wrong, but based on what was reported the Chiefs gained at least $9 million in cap space. It is likely more than that as the way the reports have been worded make me think he needs to reach certain performance levels to even earn that much. If that is the case they will save more against this year cap. The team probably has around $12.5 million though that does not include the deal for Alex Smith.

From L_A_RAIDERS-  The New Regime has only been here 1 year…isnt that statement a little pre mature?? What Crazy contract has Reggie Handed out?

This was in reference to a statement I made on the Raiders decision to continue to not release players but instead keep extending. Its a fair question. I think when you have a situation as bad as the Raiders you have to be willing to make very difficult decisions. They continued to make many of the same moves as the previous regimes. In Richard Seymour’s case they added another void season onto the end of his contract to just increase the inevitable dead money in 2013, which is close to $14 million. They re-signed LB Aaron Curry, who had shown nothing, to a deal that contained 3 voidable contract years and they fully guaranteed his 2012 base salary. He was gone by November. They used a similar void trick to bring Carson Palmers numbers down in 2012 which has just added to more dead money issues either in 2013 or 2014. I just think the abuse of these void years and salary conversions makes it impossible to ever get out of this hole and based on the most recent restructure of a player that most Raider fans seem to think doesnt even fit their offense it just seems to be the same approach. Maybe the moves of 2012 were done out of absolute necessity, but this last one was not.

From @Donkey_Kang With the inflated price of cornerbacks is it more likely the Chargers draft one in first 2 rounds than sign one for big money?

I could see salary cap playing a role for some teams in the draft but I have to think the Chargers are simply in BAP mode. But as a general question if you can find a QB, DE, CB, or WR in the draft you are well ahead of the game in your positional spending. The ability to have rookie contracts playing those position is a huge advantage.

Feel free to keep asking me questions either on Twitter, email, or in postings. Ill try to answer them as best I can in the future.

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Recapping Todays News… Chiefs, Cowboys, Saints and more…

Today was the last day to designate a player a franchise or transition player which probably had a number of potential free agents anxiously waiting to hear if they were truly free or confined by the tag. While there were some moves made at the last minute many of the names that had been discussed in recent days, such as Greg Jennings, Aqib Talib, Jake Long, Sean Smith, and so on made out without getting franchised.

Kansas City Chiefs– The  most active team of the day the Chiefs locked up WR Dwayne Bowe to a 5 year contract and P Dustin Colquitt to a contract that should make him the highest paid Punter in the NFL. The ability to lock up up Bowe allowed the Chiefs to place the franchise tag on T Branden Albert.

While there have not been concrete terms on Bowe’s contract I have seen the numbers 5 years for $50 million floating around on Twitter. If that is the deal signed it will be a good deal for the Chiefs and probably signal a bad sign for Mike Wallace and Greg Jennings who were hoping to break the bank. They needed Bowe to pushed past Vincent Jackson and $10 million a year does not even come close. Now it is possible that the guarantees are similar as Jackson’s deal was originally a two year contract disguised as a 5 year contract prior to his late season renegotiation, but $50 million shows a depressed market possibility for the position. That said many times when contracts numbers like this just float around they prove to be false so we will just need to wait and see.

The Chiefs should still be  in a decent cap position even with the trade for Alex Smith on the horizon.  Once the team releases Tyson Jackson and Matt Cassel they will free up $20.845 million on the cap. Both moves seem like no brainers.

Dallas Cowboys– One step forward two steps back?  Dallas just seems like such a poorly managed team. Today the team cut S Gerald Sensabaugh to free up $1.4 million in cap room, their first real solid roster transaction of the offseason. They spent two or three days last week extending and/or restructuring contracts to get cap compliant and then they decided to again designate DE/LB a franchise player. This time around the tag should cost the team $10,272,200 which seems absurd for a team with salary cap problems. Can Spencer play in the new defense?  I would think so, but this is not a team that can really afford these luxuries.

This isnt a team in a championship game that wants to make one more run. I almost feel as if the owner still thinks its 2007 when Dallas played like an elite team with a young Tony Romo at the helm. They have not had a winning record in 3 years and when that happens you need to start making the tough decisions to not bring back players that are going to kill your financial structure down the line. This move puts Dallas back over the salary cap meaning more restructures. Romo is the one they need to get done and now they gave him even more leverage to make a killing. Even if they are going to entertain trading Spencer the damage is done because they need to get under the cap before a trade can occur. If this team doesn’t win next year its going to get ugly in Dallas which is rapidly turning into the Oakland Raiders of 2004-2011.

New Orleans Saints– The Saints reportedly restructured the contract of Brodrick Bunkley according to Mike Triplett of NOLA.com. I’ll get the details up on the site in the next day or two but this is a team also living in the past. This move more or less guarantees Bunkley a roster spot in 2014 at a cap number above $6 million, a year where the Saints already have $126 million in cap commitments for just 39 players. To go further in on defensive players on an awful defense seems pretty illogical. I guess they are blaming everything on Steve Spagnuolo, disregarding the fact that the defense was pretty bad for about 5 years I guess you can argue that Bunkley was their best defender.

Miami Dolphins– The Dolphins franchised DT Randy Starks which puts the Dolphins interior line investments upwards of $17 million, 2nd highest in the NFL to only the Detroit Lions who have over $18 million tied up in Suh alone. With more and more teams passing the football and running alot less, I think it questions the philosophy of investing high in the interior unless it is for the rare players who are real game wreckers that can rush up the middle.

I understand the decision and financially it makes more sense to do this with Starks and try to work out a long term deal than overspending on Smith or Long on one year deals, but I think it definitely brings up a good positional spending debate. As the run offense went out of style in the mid 2000s the pay has clearly cycled away from the DT and out to the CBs. Miami is taking the opposite approach. The Dolphins now have about $57 million tied up in their defense with only $26 million in the offense, the lowest amount in the NFL. Clearly the rest of their spending needs to be on the offensive side of the ball.

Oakland Raiders– The Raiders reduced the salary of G Mike Brisiel by $3 million dollars. The move was first reported by Steve Corkran and he stated that this will save Oakland $3 million which would indicate a pure paycut rather than restructure. My experience would tell me hs got something in return, but that’s just a guess on my part.  I have not updated his cap number yet and will try to see if I can verify that he accepted a paycut, but if not Ill run with that number until I hear otherwise.

Carolina Panthers– I just wanted to throw this one in there because I know of all the teams this is probably the one with the largest discrepancy between the sites numbers and the reports. I do know that the figures we have are estimating Carolina between 1.5 and 2 million on the low end showing them with more cap room than they really have. I am not sure where the error is and whether I am missing a big dead money player or some type of incentives but I will try to work that out to get the number closer to the actual charge.

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An Offseason Look at the Oakland Raiders

Ah the dreaded (dreadful?) Oakland Raiders. The Raiders have become a model of how not to run a franchise over the last decade. Poor investments all over the place and nothing to show for it. It seems that every season the Raiders have to make cap room to function yet every year they end up nowhere near the playoffs. This is probably the year where they can begin to come out of that hole and make the turn back towards relevancy in the NFL.

Cap Positions

My estimates have the Raiders somewhere around $131 million in cap commitments for 47 players, but that number is a bit misleading as DT Richard Seymour currently carries a cap figure of $19.133 million and his deal is set to void on Friday. He will still count for $13.714 million on the teams books even when his deal officially voids, a perfect example of the Raiders overreliance on void years to spread out cap hits, but that move should put them right close to the salary cap limit. I can’t picture Seymour coming back and I don’t think its wise for the Raiders to consider bringing him back either as they need to get younger.

The Raiders have a top heavy roster with 5 players (not including Seymour) occupying more than $9.5 million in cap room apiece so there are plenty of places they can look for cap relief. QB Carson Palmer is likely a goner occupying $15.335 million in cap room. The Raiders overpaid dearly for him in both trade compensation and salary in hopes of making the playoffs and now Palmer either has to take a paycut or move on. Playing Terrelle Pryor in the last game of the year was really a brilliant move to really force the issue. Releasing Palmer saves the Raiders nearly $6 million in cap room. He could have options outside of Oakland, but nobody is going to pay him $13 million dollars and I would think Oakland would offer him more than any other team in the league on a restructured deal/ .

DT Tommy Kelly has been unproductive while also being a member of the double digit cap hit club for Oakland. Releasing Kelly saves $4.775 million in cap room and 2013 and more importantly gets him off the books now rather than having him also contribute dead money to the 2014 cap.

RB Darren McFadden is in the final year of his contract and could be released, freeing up $5.86 million in cap space. McFadden can be a dangerous player, but he is never healthy and is not a feature back that you can afford to occupy $9.685 million in cap room in any season.   The team could explore trading him before releasing him.

WR Darrius Heyward-Bey, who has averaged about 500 yards a season since being drafted in 2009 is set to earn $7.721 in salary this season and carry a cap charge of $10.601 million. There is no chance of either occurring so he has to choose between a paycut or a release….K Sebastian Janikowski will free up $4 million in cap room if the team were to release him.

Perhaps the most interesting situation involves LB Rolando McClain. He has worn his welcome out in Oakland, but, I believe he is still owed a good portion of guaranteed money that remains on his contract. As a top 10 draft pick under the old rookie system, players like McClain got guarantees that in effect made them uncuttable for the duration of the contract. McClain received a $12.1 million dollar option bonus in 2011 and that alone makes for a dead money charge of $6.91 million if released, which represents a net loss of cap room. He also has an additional $3.665 in salary guarantees that the Raiders will owe him if he is cut, though I will try to verify that this is the case.

If true it only makes him a candidate for trade. Even if the Raiders receive cap credits for someone else signing him the timing could make things difficult for Oakland. I have heard some people mention that the Raiders will go after his bonus money already paid, but it is near impossible to go after option bonus money as the CBA only allows you to recover damages if actions occur in the year the bonus is paid. McClain did not have issues in 2011 so it’s a dream for Oakland to recover that money. This could be a situation where they are stuck together or at the very least where he will remain on the books until June 1st.

Notable Free Agents

The Raiders have 9 free agents, including Seymour, who were primary rotation guys last season. Now when a team has as poor of a year as the Raiders did in 2012 I don’t think the large number of free agents is a concern. If anything it illustrates the opportunity they have to move forward with the franchise. I don’t think anyone is going to shed any tears if Khalif Barnes, Brandon Myers, and Matt Shaughnessy don’t return next season. The two free agents that will draw the most interest from Oakland should be LB Philip Wheeler and P Shane Lechler, though its pretty clear that the Raiders need to stop over-investing in special teamers if they want to improve.

Rookie Pool

Trades have eliminated selections in round 2 and 5 for the Raiders, which could make trading out of the 3 spot to try to amass more picks a good option for a team that is in the midst of a complete roster overhaul. The Raiders rookie pool should be just under $6.2 million this year.

PickSB2013 Cap2014Cap2015Cap2016CapTotal
Round 13$13,341,672$3,740,418$4,675,523$5,610,628$6,545,733$20,572,302
Round 34$690,832$577,708$667,753$757,773$847,818$2,851,052
Round 43$484,424$526,106$616,106$706,106$796,106$2,644,424
Round 65$117,932$434,483$524,483$614,483$704,483$2,277,932
Round 73$67,500$421,875$511,875$601,875$691,875$2,227,500
Round 713$60,248$420,062$510,062$600,062$690,062$2,220,248
Total$14,762,608$6,120,652$7,505,802$8,890,927$10,276,077$32,793,458

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