Saints to Trade Up Into First Round of 2012 NFL Draft...Maybe

Hah, calling me a cap expert is going way too far. I know enough to be dangerous, but there is no way on earth I could write an NFL player’s contract.

But as to the primary point, there are three key things to keep in mind:

1) Dead money. If a player (like Smith) has “dead money” on his contract, this will make a difference as to whether he can be released or traded at all (or if not at all), and if he can be whether it will really help or hurt the team. You can generally release a player when the cap hit is less than his next year’s salary, but for a player whose truly worthless going forward you might do it for a slight loss. But even then, not a big one. For example, Smith had a pretty small signing bonus (12 million) and roster bonuses the last two offseasons (which usually don’t prorate so far as I know), which means he probably has at most 4 million in “dead money” left and may well have less. (You don’t have to prorate the signing bonus over the entire contract for some reason I don’t fully understand.) Compare that dead money to what their salary is for the next year and find out if you save cap room. His 2012 salary will be $7 million, so in theory that could be a 3 or 4 million savings (possibly even more). But there’s no way in hell Harper can be cut OR traded, as that would probably accelerate at least 10 million into this year’s cap (or 5 million each for 2012 & 2013 if this happened in August), and neither the early or late timeframe is feasible. It’s just not happening. Like him or not, Spags will have to find a way to use him.

2) Guaranteed money. If a player still has significant guaranteed money left on his contract, cutting him is all-but impossible. On the plus-side, with Smith his guarantees were the signing bonus and his first two year’s of salary plus those aforementioned roster bonuses. He’s out of guaranteed money, so IF we truly wanted to cut him (which I’m not saying we do or that we don’t) it won’t hurt us here.

3) Signing bonus vs salary vs other bonuses vs guaranteed/non-guaranteed money vs a whole heck of a lot more. Going forward, you have to structure the deals where the player feels he’s compensated fairly and yet give yourself room under the cap to work with. One key way to do this is exactly what we did with Smith, guarantee future money that won’t be paid for a few years (his roster bonuses in 2009 and 2010, and his 2008/2009 salaries), but he knows for sure he’ll get it. PT was given a lot of his first year salary guaranteed and a little bit of his second year. Lance apparently got his signing bonus and his first two year’s salary guaranteed. Etc. Not all of that money had to be paid immediately and not all of it counted towards that year’s cap number (2008/2009/2010/2011 are all under discussion for the various players involved).

Signing bonuses almost always prorate, and the length can be apparently controlled, but I’m pretty sure they have to be broken evenly. I could be wrong on that last. I’m about 95% sure roster bonuses only prorate if they occur after some midpoint of the offseason (probably July 1st), in which case they split in half (for cap purposes, not payment date) for the two years.

OK so what does this mean in actual negotiations for each person? Take this with a huge grain of salt, of course, I’m not Mickey’s alter-ego and I have NO idea what he’ll actually come up with. But within the limitations of my understanding of the cap, here’s at least one idea on how it could work.

Last reports had us with about $30 million in cap space not yet taken up for 2012. Let’s further assume (for now) that Smith either can’t be cut or won’t be. So no easy way to get extra money unless we renegotiate some contracts (and this probably can’t happen until June/July) to convert salary to bonuses that prorate somehow. And with free agency in April, renegotiated contracts probably won’t help us very much.

At any rate, if we wanted to pay Drew his fair-share of $18 million a year (and we’re going to have to pay at least that much) we have to come up with a way to structure it so he doesn’t count that much against the cap in 2012 or we’re down to only $12 million in cap space and that’s just not enough room. We also must consider that if he can still play at 38 (almost 39 with a Jan birthday) we don’t want him playing for somebody else, so this has to be a 6 year deal again. (Or maybe even 7 years.) This means $108+ mil in raw value. So first off we have to give him a big signing bonus. He’s worth it and no even merely good QB can not be given one, with him in the elite category it’s a must. Mickey will probably aim for something like $30 million in signing bonus, which is all paid in the first year but can prorate over part or all of the contract. Then he’ll probably guarantee some $5 million bonuses in at least two of years 2, 3, 4, & 5 so that it’s still “guaranteed money” but doesn’t count on this year’s cap. He’ll also almost certainly guarantee every bit of salary for 2012 and 2013, and likely also a good chuck for 2014. This ups the guaranteed money to around $50-60 million which is probably fair for an elite QB contract.

But now, in order to make this work with the cap, they must give him smaller raw “salary” numbers (which always goes against the current year) which must be really low in the first two years (where we so badly need the cap space before the 2014 TV contracts kick in). Maybe something like $5 million or so. By prorating the 30 million over only 5 years (to increase flexibility in years 5 & 6 when he’s 37/38) that’s 6 million a year, with a $5 million salary in 2011 and 2012, we could theoretically have him at a $11 million cap number for 2012 and $16 million for 2013 (or maybe even 13.5 if that assumed $5 million roster bonus were guaranteed but paid in August).

The last factor to consider is that the “key” factor in evaluating a deal is how much money is paid in the first three years. With $35 million in bonuses and $10 million in salary already accounted, for we’re well on the way, but we need this number to be at least $60-70 million to satisfy Condon (Brees isn’t a greedy Peyton-style prick, I’m not worried about him, but Condon is a whole different can of worms), so we’ll need to make his 2014 salary at least $10 million with probably another $10-15 million in some sort of bonus (hopefully one that can prorate, as the 2014 cap probably won’t go up by 50+ million and we will have new people to sign then). This gets us to $55-60 million in first three years, coming close to greed-bucket-Manning’s contract value and still leaving the team at least some flexibility in the cap in the future. Then with $5 million roster bonuses in 2014 and 2015, we’ve probably now accounted for all but about $38 million proposed $108 million, and we’d probably put the remaining amounts into salary in fairly flat fashion. There probably would be slight escalation but not likely to be much “back-loading”, so maybe 12.5/13.5/15 million salaries those last three years.

OK now we’re at $19 million left on the cap for 2012.

Next up we’ve got to keep Nicks. With Evans making only $3 million in actual salary this year (after getting $3 million plus $12 million in signing bonus last year), this might be a bit easier even though Evans is making an average of $8 million a year on his contract. If they offer Nicks a similarly structured contract (7years, 56 million), and if he truly does want to stay (as he claims, but you never really know for sure), then I think he’d probably take it. Given that Mickey specifically stated the Evans deal was not back-loaded with “funny money” and they expect him to play and earn every penny, they probably prorated that signing bonus over the entire 7 year contract. If they did the same for Nicks that means a $5 million cap value in 2012 and 2013. So he was pretty easy to deal with after all, so long as he truly wants to stay.

OK now we’re at $14 million for 2012.

Again Colston needs to be paid and if we’re going to keep him he’s going to have to make at least $8 million a year, probably $10. Here it’s a bit harder. WR don’t always last to play 13 years, so while we may well want to offer him a long-term deal we can’t back-load it too much. And given how little he’s been paid for his real “value” over the last few years, I’m thinking a $20+ million signing bonus is pretty much required. Let’s say we give him $24 million there on a 6 year deal, with very low salary again for 2012 and 2013 (say maybe only $2 million) but all of his salary for both years and for 2014 guaranteed. Then maybe a roster bonus in 2013 to keep him from being too annoyed about the very low “official” salary and we might be able to work this out. This gives us an $6 million cap hit for 2012.

We’re now at merely $8 million for everything, draft picks, free agents, resigning anybody else we want to keep, etc.

Now that’s not to say Mickey can’t do it. There are a ton of other cap tricks that he knows like the back of his hand and I’ve never heard of. I would not be surprised at all if the basic structure I propose is actually close what they do but they find ways to keep all three with only a total of $15 million in 2012 cap hit (as opposed to the $22 mil I detailed out). But all of that depends on three things: 1) the player truly wants to stay, 2) the player and agent both feel the contract, despite the “funny” structure (although when you really get down to it every NFL contract is probably has quite a bit of “funny” structure), still gives the player fair payment, 3) and again despite the funny structure the player and agent believe the player will truly get most or all of the money offered, especially in the first three years.

OK, I’m done with the book for now. Anybody still awake? :)