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Disclaimer: This is purely an information quest. It stems from an arguement/disagreement on what "guarenteed" means and the cap ramifications of deciding to cut Kirk Cousins if it "doesn't work out." It's not any reflection or opinion of the guy. It's purely intended to understand the salary cap and contracts.
So basically, the question started with a real life arguement with a buddy about "guarenteed" contracts.
He thinks the "guarentee" refers to injury and performance bonuses. Meaning, instead of needing to "earn" escalators, he just gets them. He thinks if the team cuts him, they simply eat his signing bonus and eliminate the base, regardless if it's "guarenteed."
...
I argued in circles that guarenteed money isnt a bonus, its a figure the player is guarenteed to recieve, within it's written base/bonus structure, even if the team releases him.
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After looking at $29 and $31 million over years 2 and 3, he just kept shaking his head "no, thats dumb. That doesnt make any sense. See, they did $1 million bonuses to make it easy."
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I said, "if the Vikings cut Cousins today, they would eat..." and then it dawned on me... I really don't know how our cap hit would work or how Cousins pay checks would work.
Does his guarentee get stretched and hit the cap over 3 years? What really confused me is thinking about players who get cut simply to get their deals off the books. Once a team pays out a player up to the "guarentee," they simply can get off the hook by the end of the league year, right?
What happens when a player with guarentee'd money remaining gets released? How does it affect a teams cap over the remaining years and how does a player get paid? Is there a situation where that guarentee is void, such as signing a new deal elsewhere?
Lol... just a long winded rambly ass question... nbd...
by no means an expert but i figured the whole thing was due whether hes on the roster or not? with the exception being a non-football injury.
If we cut him today; right now (turns out hes a Packer fan and Rick aint having it...)
Do we owe him a big check (guarenteed balance owed), and do we eat all of it against the cap today?
...or do we simply take the cap hit over 3 years as the contract is structured?
A player who has a portion of their deal guarenteed: ?? their bonuses and base salary are added until they reach the "guarentee," after which the team is able to release them without any extra financial commitment. ??
... When the league year comes to a close, teams are scrambling to release guys before free agency and sometimes during. Are base salaries guarenteed, regardless of wording, once the new year begins?
I don’t even know what constitutes a catch
Sorry, can’t help
If the Vikings cut KC they would have about $84M in dead money (less what they have already paid him). They could spread the dead money out over two years by designating him a June 1 cut. But until June 1, they would carry the entire dead money amount on this year's cap. He will get the entire $84M as specified in the contract.
Quote: @BlackMagic7 said:
Disclaimer: This is purely an information quest. It stems from an arguement/disagreement on what "guarenteed" means and the cap ramifications of deciding to cut Kirk Cousins if it "doesn't work out." It's not any reflection or opinion of the guy. It's purely intended to understand the salary cap and contracts.
So basically, the question started with a real life arguement with a buddy about "guarenteed" contracts.
He thinks the "guarentee" refers to injury and performance bonuses. Meaning, instead of needing to "earn" escalators, he just gets them. He thinks if the team cuts him, they simply eat his signing bonus and eliminate the base, regardless if it's "guarenteed."
...
I argued in circles that guarenteed money isnt a bonus, its a figure the player is guarenteed to recieve, within it's written base/bonus structure, even if the team releases him.
...
After looking at $29 and $31 million over years 2 and 3, he just kept shaking his head "no, thats dumb. That doesnt make any sense. See, they did $1 million bonuses to make it easy."
...
I said, "if the Vikings cut Cousins today, they would eat..." and then it dawned on me... I really don't know how our cap hit would work or how Cousins pay checks would work.
Does his guarentee get stretched and hit the cap over 3 years? What really confused me is thinking about players who get cut simply to get their deals off the books. Once a team pays out a player up to the "guarentee," they simply can get off the hook by the end of the league year, right?
What happens when a player with guarentee'd money remaining gets released? How does it affect a teams cap over the remaining years and how does a player get paid? Is there a situation where that guarentee is void, such as signing a new deal elsewhere?
Lol... just a long winded rambly ass question... nbd...
I'll play this is how I see it after looking at OTC, Kirk Cousins is guaranteed 84 million over 3 years. All that will count against the Vikings caps the next 3 years.
He has a very little signing bonus (3million) because of such a high guarantee. We're used to seeing big signing bonus paid up front and then the number is spread out over the cap.
If I'm an owner and I'm guaranteeing the whole contract the player is going to have to give up a big signing bonus, because I (as the owner) am collecting that interest myself. And Kirk Cousins, is in a situation after being tagged 2 years in a row doesn't need a big balloon payment upfront.
this is from https://overthecap.com/player/kirk-cousins/1443/
Contract NotesKirk Cousins signed a three year, $84 million contract with the Vikings on March 15, 2018. $82.5 million of the contract is fully guaranteed. Cousins received a $3 million signing bonus. Cousins can not be traded nor can he the transition tag be used after the expiration of his contract. Another $6 million in incentives are available. Per Albert Breer the incentives are the following: $500,000 for winning the Super Bowl, $1 million for winning the Super Bowl and ranking top 8 in points, $1.5 million for winning the Super Bowl and ranking top 5 in points, and finally $2 million if he wins the Super Bowl and the team ranks top 3 in points.
Our yearly cap hit would essentially be the yearly value of his deal, for each voided (but guarenteed) year, right?
How does his payout work? Does he get a check for all of it? Lol... does he get paid out over the next 3 years like "normal." Does he lose any of it by signing elsewhere (or, do we get off the hook, so to speak)?
Can a team use free cap space as a prepayment, per say, to lessen the burden of a hit the following season(s)? In this extreme example, say the Vikes want to use their $20 million in extra cap space this season towards paying out the guarentee; can they roll some of KC's guarentee into this year?
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Here is a really random contract question: if a player gets injured mid season, do they recieve any of their base salary? How does, if at all, a guarenteed contract relate to injury? ...Is a "guarenteed contract" simply to protect a player from a voided contract by being released?
Appreciate the replies.
Well, here is a lesson on the salary cap I suppose.
As a concept, dead cap ensures that a players cap hit always accounts for all of the cash actually going out the door. So no matter how you structure a deal, every dollar you pay a player is going to be accounted for in the salary cap at some point.
There are three pillars to NFL contracts.
1. Salary - Can be either fully, partially, or not guaranteed. It is not prorated against the cap and is paid in the year the player is on a teams roster
2. Roster Bonus - Typically paid at the beginning of each year (can be deferred) and becomes fully guaranteed when paid. The cap hit is taken in the year it is paid, no proration is allowed
3. Signing Bonus - Paid when the contract is signed (can be deferred) and is fully guaranteed at signing. This is technically the same as a roster bonus but the impacts can be spread out over the life of the contract (5 year max)
So whenever a player is cut the team is required to accelerate any additional cap impact to match the cash impact. Typically this is the signing bonus that has been prorated out.
So here is a simple example. John Doe signs a 3-year deal worth $15M. $3M is guaranteed and is paid in a signing bonus. The contract is laid out as:
year 1: Salary - $4M / Signing Bonus - $1M / Cap Hit = $5M / Dead Money = $3M
year 2: Salary - $4M / Signing Bonus - $1M / Cap Hit = $5M / Dead Money = $2M
year 3:Salary - $4M / Signing Bonus - $1M / Cap Hit = $5M / Dead Money = $1M
Due to the signing bonus the team doesn't have to take a $3M hit against the cap in year 1 of the deal but can take a $1M hit for each of the three years. If the player is cut in year one, all $3M is accelerated onto the cap since the cash is out the door but the cap impact has not year taken effect.
So when looking at Kirk Cousins contract if they were to cut him this year prior to June 1st they'd have to take a $84M cap hit in 2017. That is because they'd be writing a check for all of his guaranteed salary and have to accelerate his signing bonus. After June 1st, the cap impact is spread over two seasons so the Vikings would carry a cap his of $42M in 2017 and 2018.
Hope this helps.
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