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The reason for lack of FA action....


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#1 Dibs

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Posted 23 March 2013 - 10:35 AM

A lot of people are looking at the numerous holes we need to fill......looking at the fact that we still have 18m+ available to spend.....and are apparently very annoyed at the lack of action the Bills have taken so far in FA.

As far as I can figure it, the reason for the lack of FA action is due to the concept that the cap has only gone up 2% per year for the last few years.....while player salaries have been rising at a much higher rate.  Simply put, if we sign any more FAs this off-season......our 2014 cap situation is looking to be in bad shape.

I'll explain....

The reason we have 18m+ available is due to the new cap rollover rules.  Rollover money from 2012 into 2013 is treated as “adjusted cap”. Any unused “adjusted” money in 2013 cannot be rolled over again into 2014.

This is an extremely important point and I think that most people don't understand the ramifications of how it effects future cap planning.
Having all of that rollover money looks exciting, but the reality is it could easily become a cap-trap that destroys a roster.


Effectively this means that if a team spends above the cap(into their rollover).......they will have no rollover money the following year.  If the cap increase for the following season is similar to recent times(2%), this likely will place teams in a tenuous position in regards to the cap for future years as teams will be going from a higher cap situation to a lower cap the following year......and as player contracts are usually structured in a manner where the cap hits increase each year throughout the contract, this would place the team in a very difficult position.


Looking at the Bills(for example).....
At the moment we have spent 109m(top 51 player caps).....we will get back 4.5m for Fitz contract in a few months.  We also have a dead cap number of 6m......and 4m for rookie contracts(I've adjusted this down from 5.5m as several of the rookie contracts will fall outside the top 51 cap hits)............bringing the total spend to.....114.5m.

The base cap figure is 123m.
The Bills' rollover amount is 10m.

This means that we are 8.5m under the cap.......and 18.5m under the adjusted rollover cap.

Ignoring any adjustment for Byrd(leaving his cap hit at 6.9m).....if we don't spend any more money on FAs, we will take a 8.5m rollover into the 2014 season.


Placing a base 6.9m cap hit for Byrd, our 2014 cap situation is currently 111m.  Adding in the 4m for the 2013 rookies.....and 4m for the 2014 rookies, this places our 2014 cap situation at 119m.  Assuming there is only a 2% increase in the cap in 2014.....the 2014 cap figure will be 125m.  
This would leave us with 6m(plus 8.5m rollover) to re-sign Wood, Chandler, Carrington, Moats, 2nd & 3rd string QB & a raft of other FAs (13 more players).

If we chose to sign another 2 FAs this year(total cost 6m/year, assuming the same cap cost through each year)......this would mean we would have ZERO money left(with a 2.5m rollover) to sign all of our own FAs in 2014(19 players).

Obviously, if we chose to spend into our current rollover we would need to either re-structure major players, cut more players, or not be able to re-sign anybody who is worth keeping.


With a new coach, it seems logical to progress through a season for him to see what he has.....and what he can get out of the current players, before mortgaging the future with relatively expensive FAs.


From what I can tell, it is not just the Bills in this situation.  Many teams have already started to cut good players due to future cap concerns this off-season.....and likely this will continue for a few more years.

Edited by Dibs, 23 March 2013 - 11:04 AM.


#2 H2o

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Posted 23 March 2013 - 10:42 AM

I think they are waiting on the second wave of cuts after the draft before they make any more moves.

#3 Dibs

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Posted 23 March 2013 - 10:47 AM

View PostH2o, on 23 March 2013 - 10:42 AM, said:

I think they are waiting on the second wave of cuts after the draft before they make any more moves.

As I showed, any moves are going to make the 2014 year very difficult to negotiate around the cap.  They will be praying for a 7m cap increase rather than an expected 2m increase.

#4 uncle flap

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Posted 23 March 2013 - 10:48 AM

I think I "get" all of this, but since the money rolled over from last year to this year doesn't roll over to next year- How much of that has been spent, and how much should they spend so they don't just lose it?

McKelvin's hit was $3mil but he was re-signed before the new league year, so does that not count as rollover money? Lawson's is $2.4 but that was after. I assume the ~$5 mil for rookies will be a part of that $10 mil rolled over from last year.

So basically, if I'm understanding this correctly, it looks like the Bills have ~$3 mil in space to use or they lose it.

Does anyone have any idea how the "rollover" money is designated? In the Bills case, is it just the first $10 mil they spend? And from when to when is rollover money in effect?

Edited by uncle flap, 23 March 2013 - 10:51 AM.


#5 H2o

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Posted 23 March 2013 - 10:51 AM

View PostDibs, on 23 March 2013 - 10:47 AM, said:

As I showed, any moves are going to make the 2014 year very difficult to negotiate around the cap.  They will be praying for a 7m cap increase rather than an expected 2m increase.

I'm not talking about next year, I am talking about this offseason we are currently in my friend. We won't sign anyone else until after the draft is my thought on the situation and it doesn't have to be any enormous, crippling contracts. :thumbsup:

#6 Dibs

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Posted 23 March 2013 - 10:58 AM

View Postuncle flap, on 23 March 2013 - 10:48 AM, said:

I think I "get" all of this, but since the money rolled over from last year to this year doesn't roll over to next year- How much of that has been spent, and how much should they spend so they don't just lose it?

McKelvin's hit was $3mil but he was re-signed before the new league year, so does that not count as rollover money? Lawson's is $2.4 but that was after. I assume the ~$5 mil for rookies will be a part of that $10 mil rolled over from last year.

So basically, if I'm understanding this correctly, it looks like the Bills have ~$3 mil in space to use or they lose it.

Does anyone have any idea how the "rollover" money is designated? In the Bills case, is it just the first $10 mil they spend? And from when to when is rollover money in effect?

The rollover money is the amount that a team does not spend under the cap.  In 2012 the Bills spent 9.8m(I rounded to 10m above) under the cap number......this then can be rolled over into the 2013 cap number.  Bringing the 123m standard cap figure up to 133m.

If a team spends over the standard cap figure(123m this year).....they will have no rollover for the following year.  Therefore, the Bills.....who are sitting at 114.5m....could spend another 18.5m(though as I showed, this will screw the 2014 cap).

Effectively, whatever we don't spend of the 10m rollover money(money used above spending 123m) will be wasted.

View PostH2o, on 23 March 2013 - 10:51 AM, said:

I'm not talking about next year, I am talking about this offseason we are currently in my friend. We won't sign anyone else until after the draft is my thought on the situation and it doesn't have to be any enormous, crippling contracts. :thumbsup:

I understood what you were meaning.....but it will in fact screw with the 2014 cap figure.  Even if you sign a couple of players to 1 year contracts(so they have no immediate effect on the 2014 cap), it will cut down the rollover amount that we can take into next year......and it looks as though we will be needing some rollover money in order to sign Wood etc.

Edited by Dibs, 23 March 2013 - 10:59 AM.


#7 Hopeful

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Posted 23 March 2013 - 11:22 AM

View PostDibs, on 23 March 2013 - 10:35 AM, said:

A lot of people are looking at the numerous holes we need to fill......looking at the fact that we still have 18m+ available to spend.....and are apparently very annoyed at the lack of action the Bills have taken so far in FA.(...) Simply put, if we sign any more FAs this off-season......our 2014 cap situation is looking to be in bad shape.
(...)
If we chose to sign another 2 FAs this year(total cost 6m/year, assuming the same cap cost through each year)......this would mean we would have ZERO money left(with a 2.5m rollover) to sign all of our own FAs in 2014(19 players).

I see the force of your argument.  Yet there are FA who could be signed for far less than 6m/year and contribute at a higher level.  Also rosters are constantly in flux...it's a fairly sure bet that of the top 10 salaried players for 2014 who are currently on the roster, at least 3 will likely be gone for one or another reason.  So I still find the lack of FA signings to be somewhat frustrating.

The Mario Williams contract did certainly put us in a hole for the next 3-4 years.

Edited by Hopeful, 23 March 2013 - 11:24 AM.


#8 H2o

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Posted 23 March 2013 - 11:43 AM

View PostDibs, on 23 March 2013 - 10:58 AM, said:

The rollover money is the amount that a team does not spend under the cap.  In 2012 the Bills spent 9.8m(I rounded to 10m above) under the cap number......this then can be rolled over into the 2013 cap number.  Bringing the 123m standard cap figure up to 133m.

If a team spends over the standard cap figure(123m this year).....they will have no rollover for the following year.  Therefore, the Bills.....who are sitting at 114.5m....could spend another 18.5m(though as I showed, this will screw the 2014 cap).

Effectively, whatever we don't spend of the 10m rollover money(money used above spending 123m) will be wasted.



I understood what you were meaning.....but it will in fact screw with the 2014 cap figure.  Even if you sign a couple of players to 1 year contracts(so they have no immediate effect on the 2014 cap), it will cut down the rollover amount that we can take into next year......and it looks as though we will be needing some rollover money in order to sign Wood etc.

I understand your point as well my friend. The one thing that leads me to believe they will go after a couple more guys after the draft is the way they broke down Fitz's cap hit. If they were that interested in the cap next offseason they would not have put the majority of it towards next year, imo. They would've just taken the hit this year. I think they have kept their options open to make a couple more moves if need be. If not, then they can roll the money over.

#9 Dibs

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Posted 23 March 2013 - 11:52 AM

View PostH2o, on 23 March 2013 - 11:43 AM, said:

I understand your point as well my friend. The one thing that leads me to believe they will go after a couple more guys after the draft is the way they broke down Fitz's cap hit. If they were that interested in the cap next offseason they would not have put the majority of it towards next year, imo. They would've just taken the hit this year. I think they have kept their options open to make a couple more moves if need be. If not, then they can roll the money over.

Due to the rollover rule, the Fitz situation doesn't effect the amount of money that we would have to spend in 2014 at all.

With a Fitz 3m hit now & 7m hit in 2014 we have....
2013:  8.5m cap room.......18.5m with rollover.
2014:  6m cap room.......14.5m with rollover.

With a Fitz 10m hit now & zero hit in 2014 we would have had.....
2013:  1.5m cap room......11.5m with rollover.
2014:  13m cap room.......14.5m with rollover.

#10 H2o

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Posted 23 March 2013 - 12:02 PM

View PostDibs, on 23 March 2013 - 11:52 AM, said:

Due to the rollover rule, the Fitz situation doesn't effect the amount of money that we would have to spend in 2014 at all.

With a Fitz 3m hit now & 7m hit in 2014 we have....
2013:  8.5m cap room.......18.5m with rollover.
2014:  6m cap room.......14.5m with rollover.

With a Fitz 10m hit now & zero hit in 2014 we would have had.....
2013:  1.5m cap room......11.5m with rollover.
2014:  13m cap room.......14.5m with rollover.

I understand that as well, but my point is they are keeping money freed up for this season to sign a couple more people if need be. There is $7,000,000 more available for us in 2013 than it would have been by taking the entire hit this year. :thumbsup:

#11 Dibs

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Posted 23 March 2013 - 12:10 PM

View PostHopeful, on 23 March 2013 - 11:22 AM, said:

I see the force of your argument.  Yet there are FA who could be signed for far less than 6m/year and contribute at a higher level.  Also rosters are constantly in flux...it's a fairly sure bet that of the top 10 salaried players for 2014 who are currently on the roster, at least 3 will likely be gone for one or another reason.  So I still find the lack of FA signings to be somewhat frustrating.

The Mario Williams contract did certainly put us in a hole for the next 3-4 years.

I actually said 2 players for a total of 6m/year.....which I thought quite a reasonable guestimate for reasonable FA signings.
I personally think we might spend up to 4m on multi-year contracts.....but anything more would be a huge stretch in 2014.

Our 10 top cap hits for 2014(not including the 2013+2014 rookies of course) are.....

Mario:  18.4m
S Johnson:  8.5m
Dareus:  6.49m
Anderson:  6m (2m saving if cut....4m dead)
K Williams:  5.8m
Spiller:  4.16m
McKelvin:  4.15m(1.15m saving if cut....3m dead)
B. Smith:  4m(3.5m saving if cut....0.5m dead)
F Jackson:  3.7m(2.7m saving if cut....1m dead)
E Pears:  3.45m(2.9m saving if cut....0.55m dead)

Cutting Smith, Jackson & Pears would save 9.1m.....though that would bring it to 22 players of our top 51 that would be FAs next year.

View PostH2o, on 23 March 2013 - 12:02 PM, said:

I understand that as well, but my point is they are keeping money freed up for this season to sign a couple more people if need be. There is $7,000,000 more available for us in 2013 than it would have been by taking the entire hit this year. :thumbsup:

But that only applies if we are going to be further spending over another 11.5m this off-season(under this cap).  If we spend 11.5m or less then it makes absolutely no difference.

I'm not saying you are wrong......just that I find it difficult to see how we could spend over 11.5m more now that most of the higher priced FAs are gone.

......and if we do spend over 11.5m more this season, our cap space for 2014 drops to 6m(with no rollover).....and that is assuming the 11.5m+ is only on 1 year contracts.
6m to pay for Wood & 18 other leaving FAs in 2014.  Something has got to give :(.

Edited by Dibs, 23 March 2013 - 12:21 PM.


#12 H2o

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Posted 23 March 2013 - 12:47 PM

View PostDibs, on 23 March 2013 - 12:10 PM, said:

I actually said 2 players for a total of 6m/year.....which I thought quite a reasonable guestimate for reasonable FA signings.
I personally think we might spend up to 4m on multi-year contracts.....but anything more would be a huge stretch in 2014.

Our 10 top cap hits for 2014(not including the 2013+2014 rookies of course) are.....

Mario:  18.4m
S Johnson:  8.5m
Dareus:  6.49m
Anderson:  6m (2m saving if cut....4m dead)
K Williams:  5.8m
Spiller:  4.16m
McKelvin:  4.15m(1.15m saving if cut....3m dead)
B. Smith:  4m(3.5m saving if cut....0.5m dead)
F Jackson:  3.7m(2.7m saving if cut....1m dead)
E Pears:  3.45m(2.9m saving if cut....0.55m dead)

Cutting Smith, Jackson & Pears would save 9.1m.....though that would bring it to 22 players of our top 51 that would be FAs next year.



But that only applies if we are going to be further spending over another 11.5m this off-season(under this cap).  If we spend 11.5m or less then it makes absolutely no difference.

I'm not saying you are wrong......just that I find it difficult to see how we could spend over 11.5m more now that most of the higher priced FAs are gone.

......and if we do spend over 11.5m more this season, our cap space for 2014 drops to 6m(with no rollover).....and that is assuming the 11.5m+ is only on 1 year contracts.
6m to pay for Wood & 18 other leaving FAs in 2014.  Something has got to give :(.

I agree. We also have to realize that Spiller is going to demand top $ too. It is a never ending cycle it seems with many of our best players walking away with 0 compensation. I have to believe that at some point Mario will be approached about restructuring his deal. Seems like a good guy and if he wants the team to win he will more than likely cooperate to help out the organization. I would not be surprised to see the Byrd saga even possibly drag out until next offseason with him being Franchised a 2nd time.

#13 Coach Tuesday

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Posted 23 March 2013 - 12:55 PM

View PostH2o, on 23 March 2013 - 12:47 PM, said:

I agree. We also have to realize that Spiller is going to demand top $ too. It is a never ending cycle it seems with many of our best players walking away with 0 compensation. I have to believe that at some point Mario will be approached about restructuring his deal. Seems like a good guy and if he wants the team to win he will more than likely cooperate to help out the organization. I would not be surprised to see the Byrd saga even possibly drag out until next offseason with him being Franchised a 2nd time.

Good point.  Spiller's next contract is going to be monstrous.  Like $100 million range by the time he hits that post-rookie contract.

#14 Dibs

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Posted 23 March 2013 - 01:17 PM

View PostH2o, on 23 March 2013 - 12:47 PM, said:

I agree. We also have to realize that Spiller is going to demand top $ too. It is a never ending cycle it seems with many of our best players walking away with 0 compensation. I have to believe that at some point Mario will be approached about restructuring his deal. Seems like a good guy and if he wants the team to win he will more than likely cooperate to help out the organization. I would not be surprised to see the Byrd saga even possibly drag out until next offseason with him being Franchised a 2nd time.

Luckily we have Spiller under contract for the next 3 seasons.  We likely won't have to redo his contract till mid-season 2015.
It is also somewhat fortunate that his current contract pays him as the 14th highest RB in the league(ave/year).  I think we are fine with him under contract through 2014.

Totally agree with Mario.....something similar to the botched Broncos salary cut with Dumervil.....but hopefully without the botching.

#15 syhuang

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Posted 23 March 2013 - 01:36 PM

Teams can still utilize the roll-over cap and take less hit in the cap in future years though. One way to do it is, instead of giving big signing bonus, give roster bonus to the FA.

Vikings did this on 2004 when signing Winfield. Vikings had lots of extra cap room that year due to quite a few LTBE bonuses didn't meet in the previous season. By giving Winfield 10.8M roster bonus instead of 10.8M signing bonus, this 10.8M all counted to 2004 cap, not prorated to the length of the contracts. Of course, Viking had much more extra cap room in 2004, but this tactic can still be used when there are fewer extra cap room, for example, reduce signing bonus and give more roster bonus in the 1st season.

There are some risks, for example, players may not agree to it because they want the bonus when signing the deal (signing bonus) instead of when season starts (roster bonus), or players can choose to retire early and don't need to repay the bonus. But these are relative minor issues.

In short, there are ways to utilize the rollover cap and not waste it while taking smaller cap hit in future years.


---------------

WINFIELD'S BONUS IS 2004 MONEY

The Minnesota Vikings have made good use of that $33 million in cap room.

According to the Minneapolis Star Tribune, Winfield's $10.8 million in bonus money wasn't a signing bonus but a roster bonus.

This means that the money gets paid in 2004 -- and that it counts against the 2004 salary cap. Winfield's 2004 cap number, including bonus and salary, is $12.5 million.

The move means that the Vikings will carry only Winfield's salary against the cap in future years -- not prorated portions of his bonus money. It also means that the Vikings can dump or trade Winfield at any point during the life of the deal, with no cap hit.


#16 jeremy2020

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Posted 23 March 2013 - 02:25 PM

Thanks for the post. It is very informative. This should be read by everyone on the board.

Edited by jeremy2020, 23 March 2013 - 02:25 PM.


#17 dogman

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Posted 23 March 2013 - 03:32 PM

Excellent explanation, best I've seen.  I'd like the Bills to go one way or the other.  Dump a few vets (Freddy Jackson, and Kyle Williams possibly), or trade down for picks this year and next.  Otherwise go for it a little more in free agency this year.  This half and half stuff is how we keep ending up at the "middle of the road" hell we have been in.

#18 Dibs

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Posted 23 March 2013 - 04:04 PM

View Postsyhuang, on 23 March 2013 - 01:36 PM, said:

Teams can still utilize the roll-over cap and take less hit in the cap in future years though. One way to do it is, instead of giving big signing bonus, give roster bonus to the FA.

.......

Agreed.....though it is difficult to do if the following year is going to be tight regarding the cap as it means there won't be any rollover for the following year.  The signing of Mario would have been a prime candidate for this sort of arrangement.

Using this concept though.....and the thoughts of H2O above.....I could see us using this years rollover money to extend several players mid-season(2013) who are going to be FAs in 2014.  This would provide the best use of the monies available as we could extend Wood, Carrington & whomever else shows themselves to be worth keeping.....front load their contracts to have a lesser hit in 2014......and still be left with the 6m of cap space(or more) projected for 2014.

Edited by Dibs, 23 March 2013 - 04:05 PM.


#19 Best Player Available

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Posted 23 March 2013 - 04:53 PM

View Postdogman, on 23 March 2013 - 03:32 PM, said:

Excellent explanation, best I've seen.  I'd like the Bills to go one way or the other.  Dump a few vets (Freddy Jackson, and Kyle Williams possibly), or trade down for picks this year and next.  Otherwise go for it a little more in free agency this year.  This half and half stuff is how we keep ending up at the "middle of the road" hell we have been in.
yes, cut Freddie and Kyle 2 of the very few bonafide NFL football players on the team. Because they have a couple of warts.
But the team should keep the overpaid chumps like Smith, and Anderson because...............?

#20 bowery4

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Posted 23 March 2013 - 08:43 PM

Good thread Dibs. Thanks for posting it. The roll over should be used  (when and if they ever sign anyone before the season) and the bonus agreements option can be used as well. They still have some money. I think they won't do jack shite until after the draft though. Next year is next year and restructures and cuts can/will make up some money, I for one am not so worried about it. This really has been about one of the most boring FA periods for the Bills, that I can remember. Funny how a labor agreement can screw with the market so much. NFLPA effed up on that one (and the owners are cheap).

Edited by bowery4, 23 March 2013 - 08:44 PM.