Salary Cap Savings Plan

Discussion in 'Arizona Cardinals' started by AntSports Steve, Mar 10, 2003.

  1. AntSports Steve

    AntSports Steve Cardinals Future GM

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    There is a thread on footballguystalk.com (I think you need to register to even view their board) :

    http://footballguystalk.com/cgi-bin/ultimatebb.cgi?ubb=get_topic&f=1&t=031109

    The thread is called Salary Cap Loophole, but really it's a salary cap savings plan. Here's the basic part of it. Note the Eagles have been using this for the last 3 years.

    Basicly, when contracts are signed, incentives in the contract are consider LTBE (likely to be earned) or NLTBE (not LTBE). The loophole in questions works as follows.

    Total up the previous years LTBE incentives that were not met.
    Total up the previous years NTLBE incentives that were met.

    Subtract NTLBE - LTBE. The total is used to adjust the next years cap number.

    Example. Say the Eagles had $2M in LTBE incentives that were not meet (meaning the eagles didn't pay because the player didn't make the incentive). Also Say the Eagles had $0 in NLTBE incentives (maybe they are like the Cardinals and don't do incentives).

    Anyway $2M - 0 = $2M added to next years cap.

    This rule does make some sense to the NFL. Basicly if a team has to count some incentives against the cap, then the team should get that money back against the cap if they had to count it, but never paid it.

    So, here's what the Eagles have been doing for the last 3 years.

    It starts by leaving some room under the cap to sign players in case of injury (sound familiar?). Then around week 17 or so, the Eagles had about $2M left under the cap because the Eagles were lucky and didn't need their injury money. The Eagles figured out how to save that $2M towards the next year.

    They just call in one of their players that is having an off year and say, "We need your help saving some cap space, we want to redo your contract". The player says ok. The new contract (basicly the same as what they had already), now includes a new LTBE incentive for the exact amount the team has left under the Salary Cap ($2M in this example). The incentive can be anything that the league considers likely to be earned, but the Eagles pick a stat that they know the player will not earn. Example a RB who's 2001 Rushing yards were 1200, but his current years yards are only 750 with 1 week to go, could have a LTBE incentive as simle as $2M if the RB gets 1201 yards. The teams knows this RB will not get from 750 to 1201 in 1 week, so even though the league's forumla thinks it's LTBE, the Eagles know the the player won't be collecting on the $2M. (The player signes this new contract because A) they pay him a tiny bit more money this year, or B) because the player want's to help out the team.)

    Anyway, at the end of the year, the Eagles used up all their salary cap. When the NFL does the math, the eagles get a credit of $2M towards the next year.

    The Eagles have built up this credit over the last three years and it is now $4.75M. That means, while all the rest of the NFL have a salary cap of $75M, the Eagles can spend up to $80M this year. If the Eagles find the right players, they will probably spend that money, but if not, they will write a few more week 17 contracts and build up their Credit even higher. Done correctly, a team could basicly save up their money and then make 1 big superbowl run.

    I think at the end of 2002, the Cards tried to eat up the rest of their cap space by resigning Shipp and others. Of course, if Emmitt plays, the money on Shipp was wasted. The Cards would have done better to copy the Eagles and just save the money toward the next year.

    Does anyone know when Shipp's new contract was signed?

    Maybe the Cards should take about $7M this year and push it into next year as it looks like they aren't going anywhere soon.
     
  2. Redalert

    Redalert Free Agent

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    I read this earlier an the Eagles message board. I think we should use this loophole.
     
  3. CardsFan88

    CardsFan88 Registered

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    WOW.I didn't know about this.

    That is a BIG loophole.

    It circumvents the cap BIG TIME.

    The cards should definitely do this.
     
  4. conraddobler

    conraddobler I want my 2$

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    Thats cap genius at it's finest but expecting the Cards to go out of there way to circmumvent a cap so they can basically spend more money would be like expecting Jesus to show up sans toga at the Freakers Ball.
     
  5. AntSports Steve

    AntSports Steve Cardinals Future GM

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    conraddobler,

    You have it backwards. This is right up the Cardinals alley.

    It's a way to spend less but tell everyone that you spent to the cap. The Cards could use this to spend less than the cap forever and tell everyone they are doing the best that they can.

    I'm surprised the Cardinals didn't think of it first.
     

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