ESPN -- Chad Pennington

[Boozer76]

If they're stupid enough to cut him, he still gets whatever signing bonus is still due and it still counts against the cap, right?

If anyone in the Jets office is reading anything by Assmop, we're screwed.

Bob, you are totally misunderstanding the point oif cutting him. For simplicity's sake, let's pretend Pennington is not going to be able to play again. Pennington is due 12 million dollars in salary and signing bonus this upcoming season if we keep him. Furthermore he'll cost 7 million the following season. By cutting him now, it also costs us 12 million dollars this season, but it reduces our cost to $0 the next year. That's a net savings of 7 million dollars against the cap. It's a no-brainer to cut him if we feel his chances of success after the injuries is less than 50% (which I feel is very liberal).

Now let's look at the restructure request from Pennington's point of view. Currently he has a 12 million dollar guaranteed amount whether he plays or not. What we are asking him to do is play for a base salary of 1 million, plus his SB of 4 million, and EARN the remaining 7 million in incentives. SXo his GUARANTEED amount is 5 million and he will have to prove he is worth the remaining 7 million. It's basically asking him to give up the 7 million that he is already guaranteed and giving him a chance to earn it back.

If he accepts the restructure and doesn't succeed, he walks away with 5 million and tries to catch on somewhere else for the veteran minimum. If he does succeed then it is all a wash. On the other hand if he declines the restructure, he gets 12 million dollars-will be cut-and signs on somewhere else for the veteran minimum.

Example A: guarantees 5 million plus the veteran minimum and a chance to "re-earn" his original contract.

Example B: guarantees his 12 million plus the veterans minimum and if he manages to prove the naysayers wrong he'll get ANOTHER large contract on top.

You can see why it is a no-brainer for Pennington to turn down the restructure request (guarantees 12 million as opposed to 5 million). And furthermore you can see why it is a no-brainer for the Jets to cut him if he doesn't restructure (saves 7 million against the 2007 cap).

[PatsFanTX]

Bob, you are totally misunderstanding the point oif cutting him. For simplicity's sake, let's pretend Pennington is not going to be able to play again. Pennington is due 12 million dollars in salary and signing bonus this upcoming season if we keep him. Furthermore he'll cost 7 million the following season. By cutting him now, it also costs us 12 million dollars this season, but it reduces our cost to $0 the next year. That's a net savings of 7 million dollars against the cap. It's a no-brainer to cut him if we feel his chances of success after the injuries is less than 50% (which I feel is very liberal).

Now let's look at the restructure request from Pennington's point of view. Currently he has a 12 million dollar guaranteed amount whether he plays or not. What we are asking him to do is play for a base salary of 1 million, plus his SB of 4 million, and EARN the remaining 7 million in incentives. SXo his GUARANTEED amount is 5 million and he will have to prove he is worth the remaining 7 million. It's basically asking him to give up the 7 million that he is already guaranteed and giving him a chance to earn it back.

If he accepts the restructure and doesn't succeed, he walks away with 5 million and tries to catch on somewhere else for the veteran minimum. If he does succeed then it is all a wash. On the other hand if he declines the restructure, he gets 12 million dollars-will be cut-and signs on somewhere else for the veteran minimum.

Example A: guarantees 5 million plus the veteran minimum and a chance to "re-earn" his original contract.

Example B: guarantees his 12 million plus the veterans minimum and if he manages to prove the naysayers wrong he'll get ANOTHER large contract on top.

You can see why it is a no-brainer for Pennington to turn down the restructure request (guarantees 12 million as opposed to 5 million). And furthermore you can see why it is a no-brainer for the Jets to cut him if he doesn't restructure (saves 7 million against the 2007 cap).

That is the best explanation on PennyBoy's situation that I have read.

Well done Booz.

[Scott Dierking]

Booze-Very good rationale and I agree with it.

BUT

You are making the assumption that Pennington isn't going to play, and that he feels the same way.

I will bet in his mind he is not thinking that way. Just teh way he goes about things and teh way he seems to think.

He might take the gamble. What his agent tells him to do is another thing.

[Boozer76]

Booze-Very good rationale and I agree with it.

BUT

You are making the assumption that Pennington isn't going to play, and that he feels the same way.

I will bet in his mind he is not thinking that way. Just teh way he goes about things and teh way he seems to think.

He might take the gamble. What his agent tells him to do is another thing.

I know he probably thinks he can play again. He's a competitor, and just like any other competitor you have to drag him off the field before he would ever give up. I'm not saying he should give up but as competitive as he is, he is also no dummy. I'm sure he feels he can succeed, so in his mind it would be most logical to take the money now as insurance and try to catch on elsewhere for the league minimum. Hell if the Jets did cut him I have no doubt they might try to resign him at the league minimum. At least he'll have options today if he keeps the money. If he restructures and fails he may never get a chance to play again in the league.

[LionelRichie]

On the other hand if he declines the restructure, he gets 12 million dollars-will be cut-and signs on somewhere else for the veteran minimum.

where does he get the $12M from? if he declines the restructure and gets cut he gets nothing and the jets eat the cap hit.

the jets need to restructure to keep him on the roster and keep ammortizing the cap hit over an extended life of the contract even if he goes on IR.

[SouthernJet]

looks like the over of 12 pages will win.

Booze and AMJets just played tagteam

[Boozer76]

where does he get the $12M from? if he declines the restructure and gets cut he gets nothing and the jets eat the cap hit.

You're so far oiff base it isn't even funny. The 12 million the Jets would have as a cap hit would be the remainder of the guaranteed portion of his contract, known as the signing bonus. The remainder of the signing bonus that was spread out over the years (16 million originally minus 4 million from last year=12 million) would be accellerated as an immediate payment and an immediate cap hit. That is why the cap hit is 12 million either way. If he stays the cap hit is 12 million=4 million SB for this year plus 8 million annual salary. If we cut him it is 12 million=12 million total SB remaining over the life of the contract and $0 for his annual dsalary (the non-guaranteed portion).

If we cut him today he will walk away with 1 check for 12 million dollars.

[AMJets]

You're so far oiff base it isn't even funny. The 12 million the Jets would have as a cap hit would be the remainder of the guaranteed portion of his contract, known as the signing bonus. The remainder of the signing bonus that was spread out over the years (12 million) would be accellerated as an immediate payment and an immediate cap hit. That is why the cap hit is 12 million either way. If he stays the cap hit is 12 million=4 million SB for this year plus 8 million annual salary. If we cut him it is 12 million=12 million total SB remaining over the life of the contract and $0 for his annual dsalary (the non-guaranteed portion).

If we cut him today he will walk away with 1 check for 12 million dollars.

The man speaks the truth!

[LionelRichie]

It's not official, Chris Mortensen said it on ESPN yesterday.

interesting that mort has the scoop on this. mangini is running a tight ship which means this 'leak' came from mangini or tannenbaum and they are putting this out in the public to let the fans know why penny is getting cut before the roster bonus comes due.

[LionelRichie]

You're so far oiff base it isn't even funny. The 12 million the Jets would have as a cap hit would be the remainder of the guaranteed portion of his contract, known as the signing bonus. The remainder of the signing bonus that was spread out over the years (16 million originally minus 4 million from last year=12 million) would be accellerated as an immediate payment and an immediate cap hit. That is why the cap hit is 12 million either way. If he stays the cap hit is 12 million=4 million SB for this year plus 8 million annual salary. If we cut him it is 12 million=12 million total SB remaining over the life of the contract and $0 for his annual dsalary (the non-guaranteed portion).

If we cut him today he will walk away with 1 check for 12 million dollars.

my understanding i as signing bonus is just that - a signing bonus in the form of a check or 1 time payment. if the jets negotiated extended payment terms than so be it but that money is gauranteed either way and was gauranteed the moment he signed the contract.

the cap ammortization of the bonus and receipt of payment are 2 distinct items. that is why teams recover signing bonus $$ when a player (like TO or ricky williams) do not fulfill their obligations.

maybe not so off base after all

[Scott Dierking]

Chad already ahs the money from teh original bonus-That is money all paid up-front.

What he does not have in his hands is the March Bonus and?or any play time or other roster bonuses.

It is an interesting dilemna, and it will be a game of cat and mouse.

Part of a moot point of this is that I believe the Jets purhased soem insurance on this contract. Anybody familiar what the amount was? Bottom line-It doesn't help teh cap, but is assuages Woody and his pockets

[Boozer76]

my understanding i as signing bonus is just that - a signing bonus in the form of a check or 1 time payment. if the jets negotiated extended payment terms than so be it but that money is gauranteed either way and was gauranteed the moment he signed the contract.

No it isn't. An NFL signing bonus is typically prorated over the life of a contract. Typically speaking, if a player gets a 5 year contract with a 20 million dollar SB, the SB is prorated equally over the contract. So it would be 4 million each year, on top of whatever the annual salary is for each year.

the cap ammortization of the bonus and receipt of payment are 2 distinct items. that is why teams recover signing bonus $$ when a player (like TO or ricky williams) do not fulfill their obligations.

maybe not so off base after all

Unfortunately you are still off base. In the case of TO and Ricky Williams, those teams were suing to recover a portion of the SB that was already paid out based on non-performance during the year they were paid. They were seeking damages for what was already paid, and on top of that were seeking relief from their obligation to pay any unpaid future SB to the player.

[Boozer76]

Chad already ahs the money from teh original bonus-That is money all paid up-front.

What he does not have in his hands is the March Bonus and?or any play time or other roster bonuses.

It is an interesting dilemna, and it will be a game of cat and mouse.

Part of a moot point of this is that I believe the Jets purhased soem insurance on this contract. Anybody familiar what the amount was? Bottom line-It doesn't help teh cap, but is assuages Woody and his pockets

No he doesn't, please see my post above. The roster bonus is not GUARANTEED money, and is thus considered part of his annual salary which is all non-guaranteed money. If he is nopt on the roster before the bonus is due, he doesn't receive it.

Shawn Ellis' contract was done very differently than Chad's. In this case he did get his entire bonus up front, and the entire amount of that bonus counted towards the cap last year. It wasn't written as a signing bonus, but rather an immediate roster bonus. By doing that it will cost us next to nothing to cut him now if we wanted to (not that we will). Chad's is an entirely different deal.

[Boozer76]

http://www.nflpa.org/PDFs/Shared/Guaranteed_Contracts.pdf#search='NFL%20contracts'

Please refer to the link above for a detailed explanation of NFL contracts and signing bonuses. Just to save you some time if you don't feel like it, I copied a line to prove my point:

The ability to pro-rate signing bonuses over the length of a contract and the associated ability to renegotiate a contract and receive yet another signing bonus are two of the system's cornerstones. This still doesn't touch on guaranteed contracts.

Game, set, match.

[JETSFAN5180]

Chad can stand put and do nothing and probably get cut. I dont think Mangini is gonna pacify Chad in the get well soon department.If Chad is cut no team will pick him up he will be a journeyman at best only if he is able to throw again.

[LionelRichie]

http://www.nflpa.org/PDFs/Shared/Guaranteed_Contracts.pdf#search='NFL%20contracts'

Please refer to the link above for a detailed explanation of NFL contracts and signing bonuses. Just to save you some time if you don't feel like it, I copied a line to prove my point:

Game, set, match.

that quote is referring to the ammortization of the signing bonus in terms of cap $$. that is why there is the blurb in there about the player being able to receive another signing bonus.

a bonus is just that - bonus $$. the payment terms of that 1 time payment are dictated in the contract. my guess is that when chad signed his name on the dotted line he received the $17M (or whatever the bonus portion of that deal was) in a one time payment.

[Bob]

Bob, you are totally misunderstanding the point oif cutting him.

No, I understand. I was just disputing Assmop's assertion that Pennington would get "nada for coin" if they cut him.

[RSJ]

http://www.nflpa.org/PDFs/Shared/Guaranteed_Contracts.pdf#search='NFL%20contracts'

Please refer to the link above for a detailed explanation of NFL contracts and signing bonuses. Just to save you some time if you don't feel like it, I copied a line to prove my point:

Game, set, match.

In Chad's case I believe he got 20+ million upfront. It was not an deal built with heavy bonuses and future signing bonuses like the one given to Brady for example. Therefor in this case I do believe Chad walks away with nothing but his past bonus.

[Scott Dierking]

No he doesn't, please see my post above. The roster bonus is not GUARANTEED money, and is thus considered part of his annual salary which is all non-guaranteed money. If he is nopt on the roster before the bonus is due, he doesn't receive it.

Shawn Ellis' contract was done very differently than Chad's. In this case he did get his entire bonus up front, and the entire amount of that bonus counted towards the cap last year. It wasn't written as a signing bonus, but rather an immediate roster bonus. By doing that it will cost us next to nothing to cut him now if we wanted to (not that we will). Chad's is an entirely different deal.

Booze- I never said teh roster bonus was guranteed (?). That is why I said all along that is the first main priority

[Scott Dierking]

that quote is referring to the ammortization of the signing bonus in terms of cap $$. that is why there is the blurb in there about the player being able to receive another signing bonus.

a bonus is just that - bonus $$. the payment terms of that 1 time payment are dictated in the contract. my guess is that when chad signed his name on the dotted line he received the $17M (or whatever the bonus portion of that deal was) in a one time payment.

That is correct.

It is only prorated in terms of the cap, not how the player receives it.

Roster and other bonuses have a triggering mechanism

[Boozer76]

that quote is referring to the ammortization of the signing bonus in terms of cap $$. that is why there is the blurb in there about the player being able to receive another signing bonus.

And it pertains to how the money is actually paid out. Whatever ends up in the pocket of the player in a pertaining season is what hits the cap. If a player gets a 20 mil SB, it is paid over the life of the contract. What that sentence is referring to is the fact that a player can opt to tear up a contract in favor of a new on mid-contract. So if a player had a cheap contract with a 2 million dollar SB prorated over 4 years, they can tear that one up and sign a new contract with a larger SB, prorated over the terms of the new deal. As of right now, all Chad has received on his contract is 4 million of his SB plus his base salary amount for last season. That leaves 12 million left over in SB money which will be accellerated to him if we cut him, as well as being accelerated to our cap number for this year.

[PatsFanTX]

From Pat Kirwan:

New York Jets -- Chad Pennington is coming off a second serious surgery to his throwing shoulder, and the club will not know if he can throw the ball before a big roster bonus is due to him. New head coach Eric Mangini has coached against Chad many times and has seen what he looks like when he's 100 percent healthy, let alone partially well. This is a hard call to make, and when I ask the question, "Is Chad ever going to be good enough to overtake Tom Brady and the Patriots for the division title," I'm not so sure. I would insist on a restructured contract down and pushing back the roster bonus or I would move in a different direction. There will be options in the draft where the Jets select at No. 4, and Jets fans would buy into a youth movement if the club came right out and said they were starting one.

[Boozer76]

That is correct.

It is only prorated in terms of the cap, not how the player receives it.

Roster and other bonuses have a triggering mechanism

I give up. You're both dead wrong, and I can't even convince you of that with a link directly to the NFLPA. Unreal........

[JETSFAN5180]

If we draft Vince Young at #4 Chads done plain and simple.The draft will determine Chads career as a New York Jet.

[SouthernJet]

If we draft Vince Young at #4 Chads done plain and simple.The draft will determine Chads career as a New York Jet.

chads inability to throw 20 yards will deterime it more

[JETSFAN5180]

chads inability to throw 20 yards will deterime it more

That wont happen until long after the draft.

[Scott Dierking]

I give up. You're both dead wrong, and I can't even convince you of that with a link directly to the NFLPA. Unreal........

Booze-Your link told us how it prorates for purposes of the CAP. That is an accounting structure.

The player gets the bonus when he signs teh deal, unless there are roster bonuses or incentives, etc.

Players are NOT going to wait to get their guaranteed money. Their money loses value over that time.

You are confusing accounting and real world.

[SouthernJet]

That wont happen until long after the draft.

got news for ya pal,,it will NEVER happen

[Green DNA]

If we draft Vince Young at #4 Chads done plain and simple.The draft will determine Chads career as a New York Jet.

If we draft Vince Young at #4 the Jets are done. We'll be going through this again in 3-4 years.

[SouthernJet]

If we draft Vince Young at #4 the Jets are done. We'll be going through this again in 3-4 years.

agree,,,

[JETSFAN5180]

If we draft Vince Young at #4 the Jets are done. We'll be going through this again in 3-4 years.

Ok then who will be our qb? Dont even tell me Bollinger or Fiedler.I will vomit.

[LionelRichie]

And it pertains to how the money is actually paid out. Whatever ends up in the pocket of the player in a pertaining season is what hits the cap. If a player gets a 20 mil SB, it is paid over the life of the contract. What that sentence is referring to is the fact that a player can opt to tear up a contract in favor of a new on mid-contract. So if a player had a cheap contract with a 2 million dollar SB prorated over 4 years, they can tear that one up and sign a new contract with a larger SB, prorated over the terms of the new deal. As of right now, all Chad has received on his contract is 4 million of his SB plus his base salary amount for last season. That leaves 12 million left over in SB money which will be accellerated to him if we cut him, as well as being accelerated to our cap number for this year.

Booze - take a look at this link:

http://moneycentral.msn.com/content/Retirementandwills/Escapetheratrace/P100986.asp

i really think that you are confusing the cap ammortization of the cap with the actual payment of $$.

Tax-saving strategies

Signing bonuses are paid in a lump sum, just like any windfall, so they typically bump players into the top tax bracket (the 35% bracket starts at $319,000 this year, whether you're single or married). To minimize the extra taxes, players often take advantage of their vagabond careers to take up residence in a state that doesn't have an income tax, such as Texas or Florida.

[Green DNA]

Ok then who will be our qb? Dont even tell me Bollinger or Fiedler.I will vomit.

I don't care if it is Chad, Fiedler, Cutler or any vet that shakes loose, I don't want to see Young here. Are the Jets going to go shotgun on every snap? I see Michael Vick Part II and want no part of it.

[Scott Dierking]

Booze=Here you go

http://moneycentral.msn.com/content/Retirementandwills/Escapetheratrace/P100986.asp

Note under "taxes"- "Signing bonuses are paid in a lump sum"

[SouthernJet]

I don't care if it is Chad, Fiedler, Cutler or any vet that shakes loose, I don't want to see Young here. Are the Jets going to go shotgun on every snap? I see Michael Vick Part II and want no part of it.

Oh but Vick is soooo cooool on ESPN and Madden video,,,,hahhahahahaha