Free agency and "Cash to the Cap": is this how you build a cap era dynasty?

[Kinzua]

Here's an article about cap management and free agent signings that brings up team building philosophy under the salary cap. While this is the first time it's come to light, I think that it's been the guiding principle for the Bills since Levy was named GM in 2006. Keep in mind that Marv worked closely and remains good friends with Bill Polian, the former Bills' and current Colts' GM. Another thing to keep in mind is that AJ Smith, whom many criticized for letting Drew Brees walk in 2006, also apprenticed under Polian when BP was the Bills' GM and AJ was on the FO staff along with the late John Butler.

One of the benefits of the "cash to the cap" philosophy is that it forces self discipline on teams as there are fewer heavily "backloaded" contracts and so, less chance that a team is going to be in the hole for $5 million a year for a player who's no longer on the team -- or worse yet, choosing between a $10 million cap hit or keeping a player who's a liability!

That teams with lots of "home grown" talent and modest FA signings keep making serious bids to make the "big dance" while most of the big spenders on free agents either fail to make the playoffs at all or make quit exits, seems to indicate that this philosophy not only works, but can position a team to create what was supposed to be no longer possible: the cap era dynasty. New England, Indianapolis, and Philadelphia are all teams that have been top drawer teams repeatedly in the last few years. Seattle and Pittsburgh might be other likely candidates as are San Diego and Chicago.

Levy weighs in on Spikes, team needs

By MARK GAUGHAN
News Sports Reporter
2/17/2007
The Buffalo Bills are not going to be spending wildly in free agency next month, but that doesn't mean they can't make a handful of important additions.

The future of linebacker Takeo Spikes with the team is in doubt.
Offensive line, defensive tackle and linebacker are the three prime areas of need on the team in the eyes of the Bills' brain trust.

Those are the three main conclusions that can be drawn from a "State of the Bills" news conference conducted Friday by Bills General Manager Marv Levy.
The Bills stand about $31.5 million under the NFL salary cap for 2007 of $109 million, according to News calculations. That causes some Bills fans to hope the team will be among the biggest spenders when the free-agent signing period opens March 2.

It's not going to happen.

"We're going to spend cash to the cap," Levy said. "We're not going to amortize the future. That's a decision we made. We would spend to the cap, but we won't go beyond that."

Because this "cash over cap" issue gets complicated, we're going to hold off explaining it fully until later in this story. Here's the bottom line:
The Bills' standing as one of the low-revenue teams in the NFL is affecting how they do business. They're in roughly the bottom fourth of the league in revenue, and it's a safe bet they will be in the bottom third in actual spending. There's no way they would get into a bidding war for cornerback Nate Clements, for example, even if he had made 15 interceptions last year.
They still could make a significant addition, someone like Indianapolis' Cato June, who is expected to be the top linebacker on the market. June would definitely be in their budget, if they want him.

The Bills think they can win by being judicious about spending and by making excellent personnel decisions year in and year out. That's not unreasonable. New England does it (with the help of Tom Brady making everyone else look good).
...
The Bills are going to have to make shrewd personnel choices because they're not going to spend their way out of drafting mistakes.
Many teams - roughly 16 of the 32 - spent more than the salary cap total last year. They did it because bonus money is amortized over the length of the contract.

Example: In 2004, Indianapolis signed Peyton Manning to a seven-year contract and gave him a $35 million bonus. For NFL accounting purposes that bonus counted $5 million a year against the Colts' salary cap. But the Colts spent up to the cap on all their other players that year. So in actuality, Colts owner Jim Irsay spent $30 million over the cap in 2004 in real money on Manning alone.

That's what the Bills are not going to do, given their economic situation. Irsay, a low-revenue owner, says he loses money when he spends over the cap. The Bills agree. That's why the Bills are battling to get more revenue sharing from richer teams under the new collective bargaining agreement.

A Bills source said Friday the team has about $30 million in cap space, counting the money they will pay their 2007 draft choices. The cap is $109 million. The Bills probably will spend about $3.5 million on offers to restricted free agents. That puts them at about $26.5 million in space.

So they're not spending more than that in real money this offseason. If they gave Clements a $20 million signing bonus, they would barely have any money left to sign any other players, under their "cash to the cap" policy. The Washington Redskins, however, no doubt would re-sign Clements, say to themselves, "He's only counting $5 million against this year's cap," and keep shopping.

Nevertheless, the Bills have good money at their disposal.

We'll find out soon how they spend it.

 

[BeyondTheGrave]

Say bye-bye to Nate.

 

[Kinzua]

Say bye-bye to Nate.

He's not worth what he wants (ie, highest paid CB in the NFL). Let Dan Snyder over-pay for him since that formula has worked so well for the Deadskins.

Besides, the Cover 2 doesn't really require shutdown corners. It needs great safeties, though, and the Bills look to have found two in 2006. :D

Even a team not playing the cover 2 would get more bang for the buck if they spent $$$ on the DL rather than on a single DB. A great pass rush makes the secondary a lot better no matter who's playing there! :cooldude:

 

[playmaker1]

thats a good article

 

[finmann]

I like this article