Dollars And Sense

We'd like to introduce Seahawks.NET's new amateur capologist, our very own Flying Greg. A long time NET columnist, Greg has agreed to take on the daunting task of relieving the erstwhile Hawkstorian as our money geek. The huge signing bonus offered by the power base sweetened the deal and made it too good to pass up. Unfortunately, Greg had to agree to a complicated voidable year's option…

Well first, let me say that I am by no means a Hawkstorian…but I did play one on TV. I've got very big shoes to fill and I will certainly give it the old parochial school try.

With the new Collective Bargaining Agreement (CBA) extension, there is still a learning curve trying to understand the legal ins and outs and nuances of the salary cap. We will cover several areas as they relate to the defending NFC Champion Seattle Seahawks without getting mired in legal speak and complicated revenue formulas. Nuts and bolts, boys and girls.

SEAHAWKS CAP

First and foremost, the Seahawks are fortunate to have one of the shrewdest general managers in the game (Tim Ruskell) and one of the best contract negotiators as well (Mike Reinfeldt). Of all the signings the Seahawks have made the last few seasons, getting Ruskell from the Atlanta Falcons and re-hiring Reinfeldt (who left during the Bob Whitsitt era) have to be considered near the top of the success tier.

The Seahawks are in good shape cap wise entering the regular season. As a baseline starting point, the team had around $10 million in cap space on the books before signing the 2006 draft class. The team's rookie pool this year was set at a maximum of $2,830,866. Simple math tells us that that left the team with just a good weekend in Vegas over $7 million to work with.

As always, salary cap figures are just ballpark. We just don't have access to a lot of the secret handshakes that happen with contracts sometimes.

I'm still working to uncover the monetary details of the deals signed by our top picks (specifically the top two choices, CB Kelly Jennings and DE Darryl Tapp), All of the rookies will earn a base salary of $275,000 - that much is a given. We also know that Jennings deal is worth $7 million, with $5 million guaranteed. But depending on how the guaranteed money is broken down (signing bonus, roster bonus or option bonus) - the impact on the Seahawks total cap space will vary.

The available space under the cap will change in the next few weeks. Keep in mind that the "rule of 51" provision no longer applies once the final roster is set. During the off-season, only the highest 51 player salaries (in total compensation) count against a teams cap. This allows for teams to pack in the street free agents and camp rats as rosters swell during training camp. After the team pares down to the final 53, all salaries will count. That could mean the Seahawks available cap space fluctuates a bit depending on which players make it. As it stands right now, the Seahawks 51 threshold is right around the $425,000 mark.

POISON PILLS AND GUYS NAMED STEVE

Lets move on to one question a lot of Seahawks fans have asked since G Steve Hutchinson signed his "poison pill" offer sheet and eventually signed with the Minnesota Vikings: Could the team have afforded both Hutchinson and LB Julian Peterson, who they subsequently signed to a huge deal on the heels of the Hutchinson disaster?

The short answer is…yes. If they would have franchised Hutchinson (guaranteeing him a salary averaged on the highest five line salaries in the league) he would be on the books for $7 million in 2006. Considering that is just about what the team has available under the cap right now, one could argue that with a little tinkering and restructuring with a few other deals, the team could have absorbed both.

But the longer answer is a question of the philosophical vs. fiscal.

The overarching problem with the Hutchinson contract was, in fact, the poison pill clause, and the correlating and somewhat troublesome point that the entire $49 million would have been guaranteed. It would have been financial suicide to assume that liability.

It's important to recognize that the Seahawks' front office fiscal policy is predicated on establishing a spending threshold and then not wavering. In other words, if they desire the services of "Player A" and can get him on the roster within their monetary boundaries, Ruskell and Reinfeldt usually make it happen. This is important to remember since a lot of fans are always curious, "how much cap space do we have & can we afford this player?" The amount of available cap space is a factor, but by far not the most critical element: If they want the player bad enough, they can always clear up space in a variety of ways.

Right or wrong, they drew a line in the Field Turf with Hutchinson and established what they were willing to pay. So now, he will be watching the playoffs at home in Minneapolis.

Philosophy also dictates that the contract signed by WR Nate Burleson won't ever see the light of day in its current form. Many fans have misunderstood the similar deal offered to Burleson, incorrectly assuming that the Seahawks will ever pay him $49 million. Never happen. That deal will be reworked after 3 or 4 years to make it much more salary cap friendly, or he will just be released outright as at that point the dead cap will no longer be so prohibitive as the contract will have matured.

Another lingering question with the new CBA extension is…what do teams do with excess cap? Traditionally, teams would extend players entering the free agency window (as many Seahawks fans lobbied to do with Hutchinson last season) or roll the cap space into incentives or provisions embedded within existing contracts. As it stands now, teams are still working the idiosyncrasies of the new CBA. Rest assured the Seahawks will make the most prudent decision on how to utilize the current cap surplus. And we may not find out the details of what they have done for some time.

But the fact remains, the Seahawks could still land a fairly prominent player and sign him to a big deal if it passed the philosophy/fiscal criteria Ruskell and Reinfeldt have established. You know, someone like disgruntled Patriots WR Deion Branch, for instance.

Several Seahawks in recent years have agreed to restructure deals to help the team out. One of the key examples is LT Walter Jones, who agreed to have his roster bonuses for 2006 and 2007 converted into signing bonuses. That means the team was able to prorate the dollar amount of his bonuses over the life of the contract (within the limits imposed by the CBA) which spread out the cap impact. In other words, a roster bonus counts completely against a teams cap for that season whereas a signing bonus can be spread out over multiple years. Isaiah Kacyvenski is one of the other players who restructured recently. Interestingly enough, he did that shortly after triggering an escalator in his 2006 base salary. He got a raise and then took one for the home team.

WHAT ABOUT 2007?

One of the key facets of NFL money management is the knowledge that it's not just a "now" thing - that you have to account for the future as well. Everyone except for Washington Redskins owner Dan Snyder seems to understand that.

The Seahawks currently have more than $10 million in dead cap (money on the books for players no longer on the roster) committed from the releases of players like Jamie Sharper, Andre Dyson, Alex Bannister and even Koren Robinson, Bobby Taylor and Cedric Woodard. The largest of the individual cap hits is Dyson - over $2 million. Depending on the upcoming cuts, the dead cap for 2007 should be significantly lower as those deals finally clear the books.

The following Seahawks enter free agency status after the 2006 season: G Pork Chop Womack, WR Bobby Engram, TE Jerramy Stevens, WR Peter Warrick, C Robbie Tobeck, G Chris Gray, LB Isaiah Kacyvenski, FS Ken Hamlin, K Josh Brown (2006 RFA), QB Seneca Wallace (2006 RFA), LB D.D. Lewis, LS J.P. Darche, DE Joe Tafoya, CB Jimy Williams, DE Kemp Rasmussen, DT/DE Chris Cooper, FS Shaunard Harts, TE Matt Murphy, T Sean Locklear, KR/RB Josh Scobey, LB Niko Koutouvides, TE Will Heller, WR D.J. Hackett, DT Craig Terrill, CB Jordan Babineaux, SS Oliver Celestin, FS Etric Pruitt, FB Leonard Weaver…and a slew of street free agents.

At first glance, that looks a little daunting - that list features 7 bona fide starters (Womack, Engram, Stevens, Tobeck, Gray, Hamlin, Locklear), plus special teamer Brown. However, it can be argued that there are no big ticket contracts on that list as of today - pending the results of the 2006 season. The top earners will likely be Stevens, Hamlin and Locklear - but all three come with ancillary issues attached. Stevens is going to miss at least the first four games after re-injuring his surgically repaired knee. Hamlin has to prove he is the player he was on the field before his horrible head injury sustained last October in a night club altercation. Locklear has to prove that 2005 was not a one-year wonder.

It is expected that the salary cap may swell to around $109 million in 2007. In the near future I will be working on early 2007 projections as far as how much cap space the Seahawks will have to work with. Looking at the above list of pending free agents, you can see that once again Reinfeldt will have his work cut out for him - but that the Seahawks are in excellent financial shape and will have the resources to keep who they want plus sign other free agents.

It is also important to note also that the old salary cap (pre-2006) was determined based on a pot of money known as Defined Gross Revenues (DGR). This was money accumulated from TV contracts, tickets and merchandise. However, with the new extension this pot of money has been expanded to include other revenue streams. It is logical to deduce that the salary cap will probably grow larger from season to season than in its previous form because of this expanded cash swell. That's not just good news for the Seahawks, obviously - but for every other NFL team as well.

Superlative cap management the last few seasons - especially with four major deals being added to the coffers (Jones, Hasselbeck, RB Shaun Alexander and Peterson) leaves the Seahawks well in the black and a roster stacked with starting quality depth at most every position. The Seahawks have the players on the field as well as the resources in the front office to compete for the near future.

 

Greg Renick writes regularly for Seahawks.NET. Feel free to contact him at grenick@cox.net.


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