Salary, Bonuses, and Salary Cap Hit Problem

[SpeedyMikeWallace]

From what I can gather so far (had the game a couple weeks now), when you're negotiating contracts with players, you assign a base salary and a signing bonus/ guaranteed money. This led me to believe that the Bonus comes out of the team Funds (Evidence: The drop in funds from pre- to post-negotiation equates to Bonus x Contract Years) and the Salary makes up the Salary Cap Hit that is deducted from of the cap itself. However, I'm noticing double dipping.

Example:
I re-signed my QB to a 6 year deal worth $135 million overall - $84.1 million in Salary and a Bonus of $51.7 million in total guaranteed. The Bonus was taken upfront out of the team Funds in total - my Funds went from ~$80 million to ~30 million.

After re-signing, his Salary Cap Hits show up as:
2021 - $15.1M
2022 - $17.1M
2023 - $19.6M
2024 - $23M
2025 - $27.3M
2026 - $32.9M
TOTAL Salary Cap Hit - $135M

This means the computer is calculating the Salary + Bonus for the SCH total and dispersing it through the contract years. Unless I'm missing something, this is a pretty big problem.

[scoobyskyline3]

I noticed this too and just kinda lived with it but it doesnt really make sense that this occurs. I started to assume that this was because of "Guaranteed money" vs "Signing Bonus."

Because then the cap hit would make sense if it is "Guaranteed Money" but that still doesnt explain why it takes the entire cap from your funds immediately.

Im with you bud

[SpeedyMikeWallace]

Yeah, it's taking the Bonus and counting it twice against us, once as a signing bonus and again as guaranteed money that goes against the cap. In my example, his contract is actually then worth around $188M, a figure that shows up nowhere.

[snellman]

You have to add the salary and the signing bonus together to get your cap hit. Example, I make you an offer of a 5 year contract of $5 mill with a $5 mil signing bonus. You would get $5 mil upfront, and 1 mil per year but your cap hit would be 2 mil each year because of the 10 mil total. If I cut or trade you after the first year, I would have a cap penalty of 4 mil the next year which is the remainder of your signing bonus.

They break it down a little more that that so your total cap number increases each year as your salary increases, but that is the simple version.

ETA: signing bonus is part of the cap hit number, but that is the money that the player is payed up front in a single payment.

[SpeedyMikeWallace]

Quote: Originally Posted by snellman

You have to add the salary and the signing bonus together to get your cap hit. Example, I make you an offer of a 5 year contract of $5 mill with a $5 mil signing bonus. You would get $5 mil upfront, and 1 mil per year but your cap hit would be 2 mil each year because of the 10 mil total. If I cut or trade you after the first year, I would have a cap penalty of 4 mil the next year which is the remainder of your signing bonus. They break it down a little more that that so your total cap number increases each year as your salary increases, but that is the simple version. ETA: signing bonus is part of the cap hit number, but that is the money that the player is payed up front in a single payment.

Yeah, I see that. It's just seems weird that it comes out of your funds if it's going to count against the cap anyway

[snellman]

Quote: Originally Posted by SpeedyMikeWallace

If the signing bonus is coming out Funds in total upfront and again in the Salary Cap Hit, the team is being hit twice by the Bonus figure.

No, If you look at your weekly expenses in the owner area, the only thing being taken out in your expenses is player salary, the bonus is listed as separate expense. Salary and bonus combine for the player's cap hit, but not in your owner expense column.

[bigd51]

Quote: Originally Posted by SpeedyMikeWallace

If the signing bonus is coming out Funds in total upfront and again in the Salary Cap Hit, the team is being hit twice by the Bonus figure.

No it's not.

The total signing bonus figure is guaranteed money. Meaning the player is guaranteed X amount of dollars over the course of X amount of years. It doesn't mean the player gets all the money at once, hence the reason it's divided evenly.

But to answer why it's taking the total amount out of your funds is because once that money is guaranteed, it's put to the side in "reserve" for that player. It is no longer your money to spend, so it's taken out of your total funds amount to represent you no longer have that money. Like winning the lottery and choosing the yearly option instead of the lump sum. It's your money technically, but not in your possession. Only, in NFL player's case, they don't get a choice at yearly or lump sum unless an NFL team is dumb enough to offer a fully guaranteed contract.

So long as the player stays under contract, he gets X amount of that bonus each year. If he's cut or traded, he gets the remaining amount owed to him upfront. This is where "dead" money comes from.

Another way you can look at is bonus money dictates the cap penalties you'll receive the current and following year if you release a player from his contract too early or trade him, while the salary amount of the contract dictates the cap hit for only the current season. They both still have to count against the cap each season while the player's on the team, but can change depending on the salary amount and bonus amount.

[ktd1976]

Quote: Originally Posted by SpeedyMikeWallace

Yeah, I see that. It's just seems weird that it comes out of your funds if it's going to count against the cap anyway

It comes out of your funds, because it is an IMMEDIATE payment to the player. Which is why you can only offer a bonus that you have funds to pay. The signing bonus is guaranteed money, because that money is paid to. the player immediately.

The cap hit is the total yearly salary, plus the average of the signing bonus. IE a 5 year deal with a signing bonus of $25 million will have $5 million cap hit per year in addition to the yearly salary.

The yearly salary increases each year because that is how most NFL contracts are structured. For instance.....

Lets say the deal is as follows. 5 years, 70 million total, Including a 20 million signing bonus. The $20 million is given to the player immediately, but still counts against the cap to a tune of $4 million a year.

The contract might be structured something like this
Yr1 $7 million plus $4 million. Cap hit $11 million
Yr2 $9 million plus $4 million. Cap hit $13 million
Yr3 $10 million plus $4 million. Cap hit $14 million
Yr4 $11 million plus $4 million. Cap hit $15 million
Yr5 $13 million plus $4 million. Cap hit $17 million

This is exactly how it is in the real NFL.