The structure is like spreading out payments. The bills eventually come due and at some point, all you have room for is interest on past charges.
Neither saves much in reality because of the guaranteed money. Now the actual money may have already been spent in a restructure, but the cap hit is already built into our future.
It's been reported that restructuring Nico will save 9.8 Cutting Autry will save 9.5 Cutting Mason will save 9 Restructuring Hunter could save up to 15 mil.
Taking out a loan does NOT save you money, It just pushes it out to the future with an even greater total cost. All you really SAVE is non-guaranteed money. But even that production has to be replaced. To be clear, this "loan" is cap focused. Restructuring often involves turning salary into bonus with an early CASH payment while spreading it's cap hit forward. The loan is for cap space only.
How do you restructure a contract that has one year left? i thought the whole point of restructuring was to move salary to a later year in the contract
Pay the final year of salary (minus league minimum) out as a bonus and add on void years. This shifts current year cap over the void years reducing the current year's cap hit. This is called a "savings" though how many cash loans do you call savings. But marketers love to tell you about savings when they actually start with a price NO-ONE EVER ACTUALLY PAYS and your savings is mythological and you actually SPEND more than you otherwise would have. Deception has become an art form.
Close, but it's the CAP HIT which is extended, often to void years so you wind up using future cap space for players no longer with the team. The salary is actually paid early as a BONUS which is spread forward with the cap accounting. This is why players usually have no problem signing a restructure. They are getting the money early.
Agreed and theoretically you could keep pushing these loans out forever. The Eagles have been doing this for the last 5 years. They probably will be doing this for another 5 years. You just have to have an owner that's willing to spend the cash upfront in the form of signing bonuses so he can put his best team possible on the field. Owners who don't operate this way are at a disadvantage, but they make more money not doing the signing bonuses. I guess this comes down to what the owners priorities are.
The baseball equivalent is Zack Greinke's Contract where we are still paying him $12M a year (last time I checked) for production years ago. The difference is the cash payments are deferred rather than front loaded because their salary cap is soft rather than hard.
they are not alike. The baseball salary deferrals are strictly to manage cash flow for the owner - they pay less in present value and the player gets to brag about an artifually high salary. That is the Bregman story - he brags about $40M when the real value is closer to $30. But in baseball it has ZERO impact on salary cap - for that the AAV is all that matters, not the payment schedule. there is no “gamesmanship”. Football is different. The cap is based on salary payment structure and players can be incented to “play ball” by giving them more cash early, and the impact is pushed into void years. It is true manipulation, and the bill really only comes due if a player is cut, then it is all at once. There is no interest on the deferrals, so it is not true that it is like credit card spending or just paying interest on contracts from long ago for players no longer with the team. The two sports work entirely differently.
It's like the stupid people that work their way through college using as much as they can for college expenses and pay off student loans as quickly as they can. Heck, just stretch them out until they are forgiven. That's the smart move because that's how most do it. What a waste when you could have used the money to party at other people's expense.
The biggest difference is the present value of GUARANTEED future payments is accounted for during the term of the playing contract. Football specifies what is guaranteed and what is not. Baseball presumes contracts of players who make the roster are guaranteed. But players usually have a dual contract depending on whether they are on the big club or the minors.
That's the method of spreading out the cap hit over future years. But you can't go on forever using up more and more cap space for players who aren't playing anymore. This is why elite players are cut or traded for the peanut farm. The have to make room because of cap debt. This is why dead cap space is now tracked. This is why the Texans had to use Nick Caserio's first two years to get out of CAP HELL. NO is also just out and it appears Jacksonville is now doing it.
