Structure of Zach's contract...
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I hope you didn't take offense to our discussion... It just didn't seem right to me.
Plus, I just remember seeing him say in another thread that he saw something that said option bonuses would not be included until they were excercised, and never saw a resolution on that.
Plus, I just remember seeing him say in another thread that he saw something that said option bonuses would not be included until they were excercised, and never saw a resolution on that.
No, I haven't taken offense to our discussion and rereading your first post you did reference my Salary Cap Chart not the one on this web site.
http://www.thefinforum.com/SiteContent/Columnists/capcorner.asp
If you reread the other threads, Clump at first agreed with me then changed his mind on Fiedler's $2 million option due 4/15/04. Thomas' and Tim Bowens' options have stayed in team salary. I asked him why and he did not answer. There was later a reference in a different thread that Fiedler's option is for future years. My understanding is what is stated in the side letter. An option that extends a contract's term. What has been reported in the media about Fiedler's option is: the the option is to pick up the 2006 year of the contract. In other words if the option is renounced or not paid, Fiedler's contract only runs through the year 2005. A reduction in the term of the contract. If there is a renouncement of the $2 million payment, it drops off team salary as there is no new bouns to amortize, the signing bonus that has been amortized through the year 2006 also has to be accelerated per signing bonus rules.
http://www.thefinforum.com/SiteContent/Columnists/capcorner.asp
If you reread the other threads, Clump at first agreed with me then changed his mind on Fiedler's $2 million option due 4/15/04. Thomas' and Tim Bowens' options have stayed in team salary. I asked him why and he did not answer. There was later a reference in a different thread that Fiedler's option is for future years. My understanding is what is stated in the side letter. An option that extends a contract's term. What has been reported in the media about Fiedler's option is: the the option is to pick up the 2006 year of the contract. In other words if the option is renounced or not paid, Fiedler's contract only runs through the year 2005. A reduction in the term of the contract. If there is a renouncement of the $2 million payment, it drops off team salary as there is no new bouns to amortize, the signing bonus that has been amortized through the year 2006 also has to be accelerated per signing bonus rules.
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Okay, that seems a little contradictory to the way the salary cap normally works also.
In Fiedler's case if his current contract only runs through 2005... wouldn't the original signing bonus only be pro-rated over THOSE years. Why would it also be pro-rated over 2006 if that portion of his contract has not been excercised yet??
I understand it has been pre-negotiated... but the way I see it is with these option bonuses that extend the length of the contract, that whey would essentially be treated exactly as a normal contract extension would... the only difference being that they are pre-negotiated. So, perhaps the amount that you have calculated for the amortization of the original bonus is slightly off (could be the case in Zach's or TimBo's contract also, but we don't have as many details about the option in their cases.)
I understand it works this way when there are incentive clauses that allow a contract to be voided... but in this case that is not what is happening. It is essentially a 4-year contract on its face, but can be CHANGED to a 5-year contract at a later date. So, I would think the bonus amortization on the original bonus would be spread over 4 years and not 5...
In Fiedler's case if his current contract only runs through 2005... wouldn't the original signing bonus only be pro-rated over THOSE years. Why would it also be pro-rated over 2006 if that portion of his contract has not been excercised yet??
I understand it has been pre-negotiated... but the way I see it is with these option bonuses that extend the length of the contract, that whey would essentially be treated exactly as a normal contract extension would... the only difference being that they are pre-negotiated. So, perhaps the amount that you have calculated for the amortization of the original bonus is slightly off (could be the case in Zach's or TimBo's contract also, but we don't have as many details about the option in their cases.)
I understand it works this way when there are incentive clauses that allow a contract to be voided... but in this case that is not what is happening. It is essentially a 4-year contract on its face, but can be CHANGED to a 5-year contract at a later date. So, I would think the bonus amortization on the original bonus would be spread over 4 years and not 5...
You have to read the signing bonus rules and see that if the player does not have control over the option year or years in question are to be prorated.
This section is also written in the negative. If you don't want to accept this rule either I can't help you.
The CBA is the Collective Bargaining Agreement. It is the NFL's labor agreement.
http://www.nflpa.org/members/main.asp?subPage=CBA+Complete
http://www.nflpa.org/members/main.asp?subPage=CBA+Complete
BuffBillsMan90
is Clumpalicious!!
When/If Miami pays Fiedler's option for 2006, it counts, not before and it's prorated.
This, I believe, states that the amortized bonus from the 2006 season will be equally split between 2004 & 2005, as long as Fielder is on Miami's roster in 2004
My numbers for Fielder:
salary: $3.7 million
amortization: $1.24 million
cap hit: $4.94 million
still have $2 million option for 2006.
If paid:
salary: $3.7 million
previous amortization: $1.24 million
new amortization: $666,666
cap hit: $5,606,000 (increase by the amortization amount)
Not paid and remains with team in 2004(without restructure)
salary: $3.7 million
previous amortization: $1.24 million
portion of 2006 amortization: $620,000
cap hit: $5.56 million
If plain out released: "dead cap" of $3.72 million ($1.24 million x 3 yrs). Original cap hit of $4.94 million. $4.94-$3.72=$1.22 million savings in 2004.
For argument sake: If $2 million option counted in full NOW
salary: $3.7 million
previous amortization: $1.24 million
Option bonus: $2 million
Cap hit: $6.94 million
If then paid per above:
If paid:
salary: $3.7 million
previous amortization: $1.24 million
new amortization: $666,666
cap hit: $5,606,666 (increase by the amortization amount)
represents a savings of $1.333 million.
However, it's really a moot argument. If it counts, you add $2 million to the cap now but save $1.333 million when exercised OR add $666,666 to the cap if it doesn't count and exercised........either way.......YOU END UP EXACTLY THE SAME
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BuffBillsMan90
is Clumpalicious!!
My take on Zach Thomas:
Salary: $2.845 million
Prior amortization from $5 million signing bonus paid as part of contract extension in 2003: $1 million
Roster bonus of $4.5 million
Cap hit: $8.345 million
This, I believe, states that the bonus is amortizable at $900,000/season. Thus, I will be changing my cap page to reflect this because I'm relatively positive that Miami will be paying it.
Salary: $2.845 million
Original amortization: $1 million
New amortization: $900,000
Cap Hit: $4.745 million
Thus, by paying the $4.5 million roster bonus, Miami saves $3.6 million on the cap. If they don't pay the roster bonus, Zach is UFA
Salary: $2.845 million
Prior amortization from $5 million signing bonus paid as part of contract extension in 2003: $1 million
Roster bonus of $4.5 million
Cap hit: $8.345 million
This, I believe, states that the bonus is amortizable at $900,000/season. Thus, I will be changing my cap page to reflect this because I'm relatively positive that Miami will be paying it.
Salary: $2.845 million
Original amortization: $1 million
New amortization: $900,000
Cap Hit: $4.745 million
Thus, by paying the $4.5 million roster bonus, Miami saves $3.6 million on the cap. If they don't pay the roster bonus, Zach is UFA
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I agree when the option is paid it is a signing bonus. Until then its an option and should be accounted for as such. As you already know I think the side letter I have previously posted addresses options of the kind we are discussing.
I looked at that and believe it does not apply as the option should not be considered a renegotiation. Instead in the same section :
I was going to post what a renegotiation is per the CBA but felt it was a little too much for this post.
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Your signing bonus number is off by $1 million but that's not the important part as your totals are correct.
It has been reported that Zach received a $10.5 million signing bonus paid $6 million in 2003 and an option bonus of $4.5 million due in the Spring of 2004. What information do you have that the $4.5 million is a roster bonus???
Now what about Tim Bowens??? It has been reported that he was due a $1.8 million option for years and recently reported that its to keep him under contract for the 2005 and 2006 years. Are you also considering this a roster bonus???
The other point that we have not mentioned is that other than Fiedler these options are probably payable on 3/03/04 or the start of the new year in part to resolve the negative cap consequences.
The other point that we have not mentioned is that other than Fiedler these options are probably payable on 3/03/04 or the start of the new year in part to resolve the negative cap consequences.
Eshlemon
FinHeaven VIP
Clumpy, thanks for all the work you put in. Great work.
My question is I'm confused a little about Zach's contract. Miami prorated his bonus over 6 million/6 years and 4.5 million/5 years. And with his contract expiring in 2003 shouldn't his proration be 1.9/year? ZT's contract has the prorated bonus at 2,337,000 in 2004 & 2005. Did I miss an extension for that 437,000?
Assuming I missed a 437,000 extension. With 4 yrs left on contract at 2,337,000/yr, why isn't the 2005 dead money 9,348,000 instead of 9,785,000?
My question is I'm confused a little about Zach's contract. Miami prorated his bonus over 6 million/6 years and 4.5 million/5 years. And with his contract expiring in 2003 shouldn't his proration be 1.9/year? ZT's contract has the prorated bonus at 2,337,000 in 2004 & 2005. Did I miss an extension for that 437,000?
Assuming I missed a 437,000 extension. With 4 yrs left on contract at 2,337,000/yr, why isn't the 2005 dead money 9,348,000 instead of 9,785,000?
BuffBillsMan90
is Clumpalicious!!
Eshlemon said:
Sorry, I haven't given ya an answer til now.
Zach Thomas restructured last off-season. He converted a $4.5 million roster bonus to signing bonus. However, Miami also converted some salary to bonus. His salary went from $2.845 million to $660,000. The additional $2.185 million/5 yrs= $437,000
You are correct about the dead cap....I'll include a correction with the updates I'm gonna send Muck soon
Eshlemon
FinHeaven VIP
Clumpy said:
Thanks for the response and no worries about any delay. The cap page has to keep you busy enough w/o us fans nitpicking over your work.