You be the judge.
This second salary cap article centers around the 2006 season and the cap issues that will face the Washington Redskins at that time and the solutions that have already or can be put in place.
The current agreement between the NFL and NFLPA expires after the 2006 season. Under current arrangements while contracts can still be signed on a long term basis the proration of any signing bonuses for these contracts can only be spread over years up to and including 2009. For example, a player signing a contract today for 7 years (2004 . 2010 inclusive) with a $7m signing bonus, will have that signing bonus spread over only six years (2004 . 2009 inclusive) not seven. When the current CBA is extended or a new CBA implemented that covers 2007 and beyond, teams cannot rework already agreed to signing bonuses and their prorations to suit the terms of the new agreement (cannot re- prorate the already existing signing bonuses). For all intents and purposes, already established signing bonuses are locked in..
No prediction for what will happen two years from now can be made without first using certain assumptions. For the purposes of these articles they are:
1. Based on the influx of revenue from the new television arrangements the NFL will maintain an increase in the cap over the next two years that is equivalent to this years rise. In other words the NFL salary cap in 2006 will be around $90m.
2. The NFL and NFLPA will, at the very least, extend the current CBA agreement beyond 2006 and that will last for at least another 5 years. A new agreement would be for a longer period.
3. Those Washington players who have voidable years built into their current contracts (in 2005 or 2006) will invoke them thus rendering them as .not under contract in 2006. for the purposes of this discussion.
4. Those players who are deemed RFA.s or EFA.s in 2006 will be signed to tender offers.
5. The 2005 and 2006 draft picks will all be utilised and costed at picks 20th (in 2005) and 27th (in 2006) in each round respectively.
6. LaVar Arrington wins his arbitration hearing over the $6.5m roster bonus due in 2006.
By the Numbers:
As of today Washington have 33 players that would be under contract in 2006, three other 2004 draftees . Sean Taylor, Chris Cooley and Mark Wilson will be under contract in 2006 when they are signed, and the Skins have a projected 12 possible draft picks for the 2005 and 2006 college drafts.
Also of note, Washington currently have 9 players owed roster bonuses in 2006 (assuming LaVar Arrington's arbitration hearing is favourable to him), totalling $21.1m. The Redskins also have 5 players who.s contracts currently run past 2009, and three players who can void their contracts before 2006 (these are not included in the 33 contracted players for 2006).
Here's the list by cap number (I have estimated the Taylor, Cooley
As you can see from the table the total of the cap numbers of the currently contracted Redskins in 2006 is $99.219m more than $9m over the projected NFL salary cap of $90m in 2006.
Notice some names missing on that list? Chris Samuels, Fred Smoot, Rod Gardner, Derrick Dockery, Chad Morton? Smoot is an unrestricted free agent (UFA) after 2004, Gardner an UFA after 2005. Samuels and Morton will void the final years on their contracts making them UFA.s in 2006. Dockery will void the final year of his contract in 2006 making him a restricted free agent (RFA) in 2006.
The question becomes which of these players do the Skins re-sign or extend, which in turn will affect the 2006 cap situation?
Smoot is the only young, starting quality corner on the roster so his chances of being extended are high.
Whether Samuels or Dockery are given serious consideration for a long term contract may depend on the development of other young linemen like Molinaro, Wilson and Christensen as much as their own form or development.
Morton is essentially a ST.s guy and as such will probably be let go, while Gardner plays at a position of strength on this team . and with four receivers already locked into contracts . will probably not have his high contract demands met in DC.
There are also players on that list who probably will not be on the roster prior to the 2006 season. Players like Renaldo Wynn, Regan Upshaw, Jermaine Haley and Brandon Noble on the defensive line, who have relatively high cap numbers in 2006, will be under scrutiny this season. Many people thought Wynn was lucky to still be on the team in 2004 given his cap numbers. CB Walt Harris is probably no more than a two year solution as a nickel or dime corner, at best. Mike Barrow and Tom Tupa may retire before 2006.
The dead cap, the paying for players no longer on the roster, has been a big issue for Washington in recent years. While teams manage their salary cap with some percentage in the budget for dead money, Washington have had high numbers in this regard in recent years. In 2004 this dead money figure stands at $9.233m, and is already at the $5.5m mark for 2005. Past marks include $14.7m in 2003 and $15.1m in 2002. A large dead cap figure in 2006 would severely hamper efforts to get under the cap.
Draft picks from the 2005 and 2006 college drafts and any acquired free agents need to be slotted in under the cap in 2006 as well.
The Strategies to Solve the Problem:
1. Player Contract Planning
Don't underestimate what the Washington contract guru's have done with a number of the contracts for the high profile players. Just about everyone, including fans and NFL experts, see Washington hitting a brick wall in 2006 because of all the roster bonuses that fall due, but it was planned that way. In fact the idea is quite revolutionary because the CBA is due for renewal in the season starting 2007.
Current CBA rules state that signing bonuses in contracts can only be spread out until 2009 even though contract tenures maybe longer. So what the Skins front office have done have taken the stance that the CBA agreement will be redone or extended in early 2006 at the latest, enabling them to convert these highly onerous roster bonuses into option/extension type bonuses and spread that one hit load in 2006 over the remaining years of the contract - many of which will be extended at the same time, reducing the 2006 hit and avoiding any possible CBA rule complications. The contracts of the players reflect this conversion strategy. Remember signing bonuses in contracts are locked in even if the CBA is extended or renewed.
Looking at the table displayed earlier in this article, if this bonus conversion was done with the 7 players with significant roster bonuses in 2006 and flowed out over their current contract remaining years, it would reduce their 2006 cap impact from $24.6m down to $5.233m, a salary cap saving in 2006 of nearly $20m. Contract extensions could reduce this even further.
Don't underestimate this front office and its abilities. Vinnie Cerrato experienced the dismantling of San Francisco.s great teams of the 80.s and early 90's due to cap naivety, and while the current strategy is not necessarily all Vinnie.s work, the lessons learned from past experiences on other teams can be the basis for revolutionary ideas like this one.
2. Using the Draft
As I stated in one of my cap articles prior to last season, the time is coming when Washington need to start focusing on developing some of their own talent as opposed to spending big in free agency. With 2006 on the horizon the best time to do that would be now. Gibbs has assembled the basis of the group the wants. The draft would be the perfect low cost way to supplement and add to this group. However, if a good player can be had as an RFA, I would not be opposed to using the odd mid-lower round pick to get a three year veteran who could help straight away at a reasonable cost. The same for the odd UFA player at a reasonable to be had cost.
With players of the calibre of Samuels and Gardner coming out of contract prior to 2006, entertaining the idea of trading these players (providing replacements have been identified), for draft picks and/or players in positions of need, is a smart strategy.
Gardner is a member of a deep WR group, four of whom are contracted through 2006. If he has a good-very good 2004 under Gibbs, Gardner could fetch a low first or high second round draft pick.
Samuels will void the 2006 year on his contract next season, and resigning him could prove a rather expensive exercise given that he will want a signing bonus in the $17m - $22m range and that this bonus can only be spread over the next 5 years, meaning that in 2006 he would count at least $6m against the cap, possibly more. Would Samuels be receptive to a two tiered bonus situation in a new contract (part signing bonus in 2005, part roster bonus converted to option/extension bonus in 2006)? I doubt it. So trading Samuels for best value possible may be the best (only) option.
4. Dead Cap Management
Making better decisions around who is recruited or when to release players past their use by date is another crucial factor for the Skins in 2006. In 2004 this dead money figure stands at $9.233m, and is already at the $5.5m mark for 2005. Past marks include $14.7m in 2003 and $15.1m in 2002. It would be best for the team to sort out its veteran player list in 2005 and take any cap hits for players released next year, leaving 2006 with little or no dead cap liability.
5. Rookie Contracts
Negotiating 2006 cap friendly contracts with drafted rookies in 2004, 2005 and 2006, particularly those picks in the first two rounds. This includes having split signing bonuses, vet minimum salaries between 2004 and 2006, and having convertible roster bonuses in 2006.
6. Typical Contract Restructuring
If all else fails to get the Redskins under the cap, those players with the larger base salaries could always be persuaded to restructure their contracts to free up cap room in 2006. John Jansen, Randy Thomas and Lav Coles come immediately to mind.
What is the Bottom Line?
There is no doubt that any strategies or steps that are put in place to get under the 2006 have one key objective, to allow the Redskins to keep their core group of players together.
With the CBA certain to be at least extended by the time the 2006 NFL draft is held and the NFL salary cap to be around $90m in 2006, these are the steps I would take (including those the front office have already arranged for) being conservative:
1. Sign Sean Taylor to a six year contract with a $14m split bonus situation ($7m signing bonus in 2004, $7m option bonus in 2005), vet minimum salaries in the next three years and a convertible roster bonus of $5m in 2006).
2. Re-sign Fred Smoot to a five year extension (through to and including 2009) worth $28m including a $7.5m signing bonus and a $2.5m roster bonus in 2006 (able to be converted to option/extension type bonus). Vet minimum salaries in 2004, 2005 and 2006.
3. Let Chad Morton and Rod Gardner go into the FA market (unless the Skins can trade Gardner).
4. Release Renaldo Wynn in 2005 prior to June 30, copping his remaining signing bonus proration of $1.750m in dead cap money all in 2005.
5. Sign the 2005 first round draft pick (projected at pick #20) to a five year contract that includes a split bonus situation of $5.0m ($3m signing bonus in 2005, $2.0m convertible roster bonus in 2006) with vet minimum salaries in the first two years.
6. Sign the 2006 first round draft pick (projected at pick #27) to a six year contract with a split signing bonus of $4.4m ($2.4m signing bonus in 2006, $2m option bonus in 2007) and vet minimum salary in 2006.
7. Give Derrick Dockery the highest RFA tender (1st round and 3rd round draft pick compensation) estimated at $2.2m.
8. Convert all the 2006 roster bonuses to option/extension type bonuses for all players that have them.
9. Use all draft picks and sign no free agents from other teams.
10. No dead cap money in 2006.
If all these steps were taken, the following table
|2005 1st Rounder||2009||0.310||0.500||0.500||1.310|
|2005 3rd Rounder||2009||0.310||0.150||0.460|
|2005 4th Rounder||2007||0.310||0.100||0.410|
|2005 6th Rounder||2007||0.310||0.045||0.355|
|2005 7th Rounder||2007||0.310||0.035||0.345|
|2006 1st Rounder||0.235||0.400||0.635|
|2006 2nd Rounder||0.235||0.325||0.560|
|2006 3rd Rounder||0.235||0.150||0.385|
|2006 4th Rounder||0.235||0.100||0.335|
|2006 5th Rounder||0.235||0.060||0.295|
|2006 6th Rounder||0.235||0.045||0.280|
|2006 7th Rounder||0.235||0.035||0.270|
|NFL PROJECTED SALARY CAP||90.000|
So much for the doom and gloom predictions that keep being presented. The situation as presented is more than manageable with 49 players on that list.
This result also does not include any typical contract restructuring or any further releases/retirements of players other than Renaldo Wynn. These steps could save even more money.
If the team wishes to strike a contract extension with LOT Chris Samuels it may be able to find the room to do so, although maybe one harder decision may need to be made to see that happen.
There.s no doubt however, Redskins will not be in cap jail in 2006.