Something I haven't heard talked about enough

[zonajetfan]

Merge if this had been bandied about already...

 

I have not seen this topic discussed much here or anywhere frankly and believe it is a highly likely scenario playing out and that is many, many FA deciding to sign one year deals in hopes the salary cap explodes next year back to the expected heights for 2021, in the 225Mil range. JD employed this tactic last offseason himself and it worked out to be brilliant in positioning the Jets to have ample space in a year when few do. Was this calculated by JD? Who knows, but it worked out for the Jets. I can see many high to mid-tier players choosing this option (not the Thuney's of the world), many out of necessity due to the limited number of teams with space. What effect can this have on the Jets? Time will tell, but this could lead to more one year deals for the Jets this offseason and the ability to plug numerous holes quickly leading up the the draft further empowering JD to maneuver his way around.

[Jdub03]

1 minute ago, zonajetfan said:

Merge if this had been bandied about already...

 

I have not seen this topic discussed much here or anywhere frankly and believe it is a highly likely scenario playing out and that is many, many FA deciding to sign one year deals in hopes the salary cap explodes next year back to the expected heights for 2021, in the 225Mil range. JD employed this tactic last offseason himself and it worked out to be brilliant in positioning the Jets to have ample space in a year when few do. Was this calculated by JD? Who knows, but it worked out for the Jets. I can see many high to mid-tier players choosing this option (not the Thuney's of the world), many out of necessity due to the limited number of teams with space. What effect can this have on the Jets? Time will tell, but this could lead to more one year deals for the Jets this offseason and the ability to plug numerous holes quickly leading up the the draft further empowering JD to maneuver his way around.

I do think we'll see some of this for sure. If this is the case don't you think players with options are gonna go to the place best equip to set them up for a productive season, so they can cash in? Should be an interesting FA period.

[FidelioJet]

Can contracts be back loaded?
 

So, long term deal, with guaranteed money but the big money is in year 2 or 3. 
 

I’m honestly not sure if it works that way though. 

[Integrity28]

Good, original topic.

A lot of veterans are being released leading up to FA. So, if you couple your logic with the “any port in a storm” mindset some may have - it stands to reason that there’ll be a lot of hole-plugging contracts and 1-year “bet on myself” deals.

Should be interesting.

I think Cam Newton’s deal is a perfect example. Team gets what they need = a vet to hold it down while they prep a rookie QB. Cam gets a chance to improve his market for next year.

 

[zonajetfan]

11 minutes ago, Jdub03 said:

I do think we'll see some of this for sure. If this is the case don't you think players with options are gonna go to the place best equip to set them up for a productive season, so they can cash in? Should be an interesting FA period.

That is absolutely a possibility and Indy would be a great choice for those players. Could see some interesting names sign one year deals there.

[zonajetfan]

8 minutes ago, FidelioJet said:

Can contracts be back loaded?
 

So, long term deal, with guaranteed money but the big money is in year 2 or 3. 
 

I’m honestly not sure if it works that way though. 

This is an interesting point, I would think it is possible, but I'm not a salary cap specialist.

[zonajetfan]

8 minutes ago, Integrity28 said:

Good, original topic.

A lot of veterans are being released leading up to FA. So, if you couple your logic with the “any port in a storm” mindset some may have - it stands to reason that there’ll be a lot of hole-plugging contracts and 1-year “bet on myself” deals.

Should be interesting.

I think Cam Newton’s deal is a perfect example. Team gets what they need = a vet to hold it down while they prep a rookie QB. Cam gets a chance to improve his market for next year.

 

Newton is a perfect example.

[More Cowbell]

I don't  think this will work in practice. The one year deal is more for players that are at the end of their careers or for teams that are rebuilding, the Jets being the latter.  Players want guaranteed money deals. That is the most important part of a contract.  They likely get less in a one year deal.

[Integrity28]

Does Jason from Over the Cap still post here?

[kdels62]

20 minutes ago, FidelioJet said:

Can contracts be back loaded?
 

So, long term deal, with guaranteed money but the big money is in year 2 or 3. 
 

I’m honestly not sure if it works that way though. 

It is possible but we haven’t really seen it because it doesn’t benefit the teams. Essentially it’d be done by guaranteeing salary in later years of the contract. Teams don’t want that because you don’t know what the player will be in 3-4 years. 

Where I think the Jets are positioned interestingly is in the negotiations. Overall salaries don’t increase across the league, and next year is a better year for Free Agents, but if JD can convince players and agents that he can guarantee them salary and stability then we can get good signings. Show the money now with a deflated market and watch those contracts appear frugal when the cap bounces back.

[nycdan]

55 minutes ago, FidelioJet said:

Can contracts be back loaded?
 

So, long term deal, with guaranteed money but the big money is in year 2 or 3. 
 

I’m honestly not sure if it works that way though. 

That's sort of what signing bonuses do.  Let's say you want to pay a guy $30M for three years.  The simple way is $10M/year x 3.  The cap hit is the same.

But if you pay him a $9M signing bonus with a $1M salary in year 1 and $10M in years two and three the cash flow is the same ($10M/year) but the cap hit is different.  The $9M is applied equally over the length of the deal so your cap hit is $4M in year 1 and $13M in years 2 and 3.  Teams can do that this year to sign or restructure players and push the cap hit out to 2022 and beyond.  Happens all the time.

The risk is twofold.

1) If the player sucks, you cut him and you accelerate the signing bonus so on long deals, you will take the hit early and hard.  Cut the guy after year 1 and you take the remaining $6M in cap hit in year 2.  That's what dead money is.  You already paid him, and you won't pay his salary, but the cap money is dead.

2) If the salary in the out years feels too low, players and agents conveniently forget about signing bonuses.  So in year 3, the player is only 'earning' $10M in new salary while other players at his position around the league are earning $12M or $15M.  He holds out and/or demands a trade.  You point out that he got a huge signing bonus two years ago and he shrugs and says he's not playing for just $10M.  

So it's a dance.  But there are ways that teams can game it.  What is rare, though, is large guarantees in the later years.  It's one thing to have to deal with a cap hit, but it's crippling to have to deal with owing a bum $15M in salary when he sucks (Trumaine Johnson, I'm talking to you!).  Then, if your cap is already in trouble, you end up having to make a Brock Osweiler deal to clear the salary off your books.  It's actually better than a signing bonus if you can do it, because you *can* clear it off, but it will cost you in draft picks or other good players to do it.

[nycdan]

To the original point, the Jets, Jags, Pats and Colts are in an interesting position where they can offer players 'normal' long term deals that other teams really can't this year.  We can structure a deal that pays more this year so the future cap hits aren't so awful because we have the room to do it.  Other teams will have to do deals that pay huge signing bonuses and very low 2021 salaries to fit under their cap and hope the cap rises enough later to save them from being next year's version of New Orleans.  We can put more into 2021 and keep ourselves from going into cap hell later on with the same players.  It's all in the math but it's a real opportunity.

[FidelioJet]

10 minutes ago, nycdan said:

That's sort of what signing bonuses do.  Let's say you want to pay a guy $30M for three years.  The simple way is $10M/year x 3.  The cap hit is the same.

But if you pay him a $9M signing bonus with a $1M salary in year 1 and $10M in years two and three the cash flow is the same ($10M/year) but the cap hit is different.  The $9M is applied equally over the length of the deal so your cap hit is $4M in year 1 and $13M in years 2 and 3.  Teams can do that this year to sign or restructure players and push the cap hit out to 2022 and beyond.  Happens all the time.

The risk is twofold.

1) If the player sucks, you cut him and you accelerate the signing bonus so on long deals, you will take the hit early and hard.  Cut the guy after year 1 and you take the remaining $6M in cap hit in year 2.  That's what dead money is.  You already paid him, and you won't pay his salary, but the cap money is dead.

2) If the salary in the out years feels too low, players and agents conveniently forget about signing bonuses.  So in year 3, the player is only 'earning' $10M in new salary while other players at his position around the league are earning $12M or $15M.  He holds out and/or demands a trade.  You point out that he got a huge signing bonus two years ago and he shrugs and says he's not playing for just $10M.  

So it's a dance.  But there are ways that teams can game it.  What is rare, though, is large guarantees in the later years.  It's one thing to have to deal with a cap hit, but it's crippling to have to deal with owing a bum $15M in salary when he sucks (Trumaine Johnson, I'm talking to you!).  Then, if your cap is already in trouble, you end up having to make a Brock Osweiler deal to clear the salary off your books.  It's actually better than a signing bonus if you can do it, because you *can* clear it off, but it will cost you in draft picks or other good players to do it.

Thanks for the info. Good stuff.

In this very unique year where the cap is lower than last but will be substantially higher next year - I would think that's how teams can work around the lower cap this year but still able to sign quality FA's.

I'm no cap expert and not sure if it makes sense but just a thought.  Is this a year we can see GM's step outside of their comfort zone and sign backloaded deals?

 

[shuler82]

58 minutes ago, More Cowbell said:

I don't  think this will work in practice. The one year deal is more for players that are at the end of their careers or for teams that are rebuilding, the Jets being the latter.  Players want guaranteed money deals. That is the most important part of a contract.  They likely get less in a one year deal.

This usually also occurs when there’s just not real interest or a market for a player at his asking price (ie Clowney). While I think we’ll see more of those situations this year, top FAs are still going to be looking for those guarantees and will get paid. We’ll just have less competition for the guys JD is looking to bring in.

[Lith]

1 hour ago, FidelioJet said:

Can contracts be back loaded?
 

So, long term deal, with guaranteed money but the big money is in year 2 or 3. 
 

I’m honestly not sure if it works that way though. 

A lot of contracrts are back loaded, so that certainly can be done.  Signing bonus is spread evenly across all years, but teams can still offer contracts with lower year 1 salary and guaranteed higher amount in year 2 and 3 when cap is likely to be higher.  There will be creative ways of gettng deals done.  Although I do agree with the OP that I would expect to see quite a few short term deals where player bets on himself.  Along with some back loaded deals to suppress the current year cap hit.

[Beerfish]

Also, in this day and age if you are a gm or coach you care less and less what is happening in year three cap wise on your team, you need to win now.

[HawkeyeJet]

I'm very surprised contracts like Trevor Bauer's recent contract(Very high per year, but for few years) in baseball aren't more prevelant for the high end football stars.

If they really are simply trying to earn as much as they can(which they should) Golliday signing with the Jets for say 3 years at 20 million per year and nearly fully guaranteed makes more sense (for both player and a high cap team like Jets) than some 6 year contract "worth" 90 million, but really only guaranteed for 50.  Financial flexibility should always be the goal.

 

[neckdemon]

2 hours ago, zonajetfan said:

Merge if this had been bandied about already...

 

I have not seen this topic discussed much here or anywhere frankly and believe it is a highly likely scenario playing out and that is many, many FA deciding to sign one year deals in hopes the salary cap explodes next year back to the expected heights for 2021, in the 225Mil range. JD employed this tactic last offseason himself and it worked out to be brilliant in positioning the Jets to have ample space in a year when few do. Was this calculated by JD? Who knows, but it worked out for the Jets. I can see many high to mid-tier players choosing this option (not the Thuney's of the world), many out of necessity due to the limited number of teams with space. What effect can this have on the Jets? Time will tell, but this could lead to more one year deals for the Jets this offseason and the ability to plug numerous holes quickly leading up the the draft further empowering JD to maneuver his way around.

in an offseason where the jets have the money to sign guys and a lot of teams don't, i think this is a bad idea. this is an off-season where you can get guys a little cheaper maybe because of the salary cap issue. i'd be trying to sign guys (well at least the ones i want around for a while) for longer term team-friendly deals

[NYJ1]

As much as I agree with your take on a free agents thought process, my feeling is if Douglas really wants a player he'll want to sign the player to a long term deal thereby not having to worry about contracts only a year later.