There are a lot of questions about how Manage the Cap works and the best practices to follow in using it. Hopefully the following primer will clear up some concerns while making it easier for users.
Here are some questions we’ve received about Manage the cap and the answers and reasoning why we do particular things:
Q: Why are only select players available for restructuring in Manage the Cap?
A: Only a select number of players can the user restructure their contracts, because we limited restructures to those deals that would save at least $1 million against the 2015 salary cap. A number of players aren’t eligible for restructures, due to being still on their rookie contracts or in the final year of their current contract. These players can’t restructure their contracts because there aren’t any future years to shift money to or it is prohibited in the CBA (for rookie contracts).
For players whose savings would be under $1 million it didn’t make much sense to include them as they are rarely asked to restructure their contracts.
Q: Why can we only restructure contracts and not reduce salaries? Why are restructures set to a certain amount?
A: These two questions are pretty similar and I think they can be answered in the same response.
Restructures are set to a certain amount, because that is the most cap savings one can get by restructuring a contract using Over the Cap’s Salary Cap Calculator. While in certain situations a team might not want to push all the money forward, for the most part teams restructure because they want to create as much cap room as possible.
The difference between restructuring a contract and actually reducing the salary is there is no real downside to a player agreeing to restructure his contract. In fact since the money is converted into signing bonus money that increases the dead money in future years, it can offer additional protection for a player.
While some players are open to reducing their salary, it’s pretty rare overall that a player just gives up money on their contract. With restructures there is no real “decision” for the player so that is why it is an automatic function in the simulator. Actually reducing a salary with no benefit to a player is a lot harder to try to account for. In the future we may look to have that option for a select few players in the league, but it is not something we would look to add this year.
Q: Why can’t I sign players in the last year of their contracts to extensions?
A: This is a tough area as for players on 5th year options (first round picks from the 2011 draft) and some top players in the final years of their deal, a number will sign extensions that in some cases will reduce their 2015 cap hit sometime before the season starts. The problem with an automatic function like cutting or restructuring is that the player would have some say in the decision.
This is something we will definitely look to add for next season as another option for creating cap room, but it should be noted that not all extensions save cap room. Players like Robert Quinn, J.J. Watt and Patrick Peterson signed extensions last year that all saw increases to their 2015 cap number over what it would have been without an extension.
Q: Why are the only options in contract negotiations yearly salary, number of years and guaranteed percentage?
A: Typically I am asked why signing bonuses or total value aren’t part of the equation. For the latter, there is no real difference in offering a 5 year $40 million contract or a 5 year $8 million a year contract. I chose the latter because it is a little better representation of what a player is worth (i.e. he’s a $5 million a year type of guy).
As for not including signing bonuses, I felt that signing bonuses while a well-known mechanism in contract negotiations aren’t necessary for determining whether a player signs or not. Some teams have gone away from offering a lot of guaranteed money in the form of signing bonuses, given the dead money rules of cap acceleration. Instead they prefer to include more guaranteed money in the form or roster bonuses or as a portion of the yearly salary that is guaranteed. What matters most is not the mechanism for the guaranteed money, but the amount of guaranteed money in and of itself.
Q: I signed a player to a multi-year contract for $8 million a year and a lower amount was reduced from my cap and shows up for that season’s cap hit?
A: With the exception of the rarest of circumstances, teams typically backload contracts to give themselves the most cap flexibility as possible. In addition to having more initial cap room, back loading a contract can give a team more justification for getting rid of bad contract sooner. Typically the more years on a contract the lower the initial first year cap hit is from what the annual average would be normally. So a contract that is for 3 years at $5 million a year is going to be higher in year one than a 5 year contract for the same $5 million a year average.
There are no rules set in stone for these types of contracts so the formula we use is a rough estimate of what you typically expect:
- 1 year contracts: 100% of the contract average counts to the cap hit (i.e. a 1 year $5 million deal counts the full 5 million)
- 2 year contracts: 80% of the contract average counts average to the cap hit (i.e. a 2 year $10 million deal counts $4 million to the cap)
- 3 year contracts: 75% of the contract average counts to the cap hit (i.e. a 3 year $15 million deal counts $3.75 million against the cap)
- 4 year contracts: 70% of the contract average counts to the cap hit (i.e. a 4 year $20 million deal counts $3.5 million against the cap)
- 5 year contracts: 60% of the contract average counts to the cap hit (i.e. a 5 year $25 million deal counts $3 million against the cap)
- 6 and 7 year contracts: 55% of the contract average counts to the cap hit (i.e a 6 year $30 million deal counts $2.75 million against the cap).
Note: Guaranteed money has nothing to do with how the contracts are structured. A 5 year deal with 20% of the contract guaranteed will have the same breakdown as a 5 year contract with 40% guaranteed.
Q: Why are restricted and exclusive rights free agents already considered “signed”?
A: Restricted free agents and exclusive rights free agents are already counting against the cap (at least the ones that I estimate will be protected) because once those offers are extended they place a hold versus the cap for that amount even though they aren’t technically signed yet. Right now I estimated the values of the various levels of restricted free agency and exclusive rights deals. As those become clear they will be updated further.
Though technically restricted free agents could be signed by another team (same issue with Franchise and Transition players) it almost never happens so it really isn’t a real option for other teams in free agency.
If there is a restricted free agent who is already considered “signed” that you don’t want eating up cap room for your team (remember these deals range from $1.5-3 million so they typically aren’t big cap hits) you can cut the player without a cap hit. This would be the same as simply not extending a restricted offer sheet.
Q: Why is there a $5 million hold for draft picks?
A: Though draft picks aren’t signed as soon as they are drafted, NFL teams are required to keep the amount of their projected rookie cap (based on number and value of draft picks) free so they are allowed to draft. This number isn’t fully set yet, and represents just a rough average over the exact number. When the Compensatory picks are announced we can update the numbers to be more reflective of what each team will need to save for the draft.
Q: Why am I seeing players who are still under contract get cut by the computer and why don’t the same players become free agents in each scenario?
A: While you control the actions for your own team, the decisions to cut or re-sign a particular player for the 31 computer controlled teams are based on a pre-set percentage of those actions. These will change from time to time as more details about offseason plans become available, but they are to simulate the unpredictable nature of free agency. Depending on who is re-signed and cut will determine which positions are the strongest when free agency starts.
Q: Why don’t players always sign for the same amount/years/guaranteed money?
A: Just because you were able to agree with a particular player during one simulation, it doesn’t mean the exact same terms will definitely work the next simulation. Though it’s possible and probably likely that those terms will work again, a player may get a better offer in a different simulation or may hold out for a better offer.