Maximize the Salary Cap? BLASPHEMY!

Ten days ago, the National Football Post ran an item that a few teams were leaving money on the table, so to speak, under the 2008 salary cap.  I'll give you three guesses at naming one team included on this list.  I'll even give you a hint: the owner of one of the teams very well may be a sociopath. 

That's right, our very own Bengals were on the list!  This may come as a shock to some of you, in the same way it would shock some that the sun rose in the east this morning and that Jay Leno is still unfunny.

It's a common misnomer that you cannot carry over unused salary cap space from year to year.  Technically, this is true.  If your cap charge in a given year is $100M and the salary cap is $120M, you don't get an extra $20M the next year.  The trick is to give yourself a fake cap charge for the purposes of getting a cap credit the following year.  This is done by writing Likely To Be Earned (LTBE) incentives in a player's contract that are impossible to earn.  It's a common practice by almost all NFL teams.  After all, there is almost no downside.  Almost.

For the purposes of clarity, an example.  Let's say, towards the end of the 2008 season, the Bengals realized that they were still $15M under the cap and wanted to carry that over into 2009.  They could write a LTBE incentive into Carson's contract, stating that if he threw for 475 touchdowns in 2008, he'd get a $15M bonus.  Obviously, this isn't "likely to be earned" by any stretch of the imagination.  However, you can write any incentive bonus as LTBE, no matter how absurd.  When you write said incentive bonus, it counts as a charge against the 2008 salary cap immediately.  When the incentive is inevitably not met, the team gets a credit to the 2009 cap for that amount.  Easy enough.

Now, I said there is almost no downside.  For most teams, there wouldn't be.  For Mr. Brown and his Bengals, it is a rather large downside.  Along with a salary cap, there is a salary floor.  I'm not sure of the exact figure, but for 2009 it will be somewhere around 86% of the salary cap for a given team.  A higher salary cap means a higher salary floor.  For most teams, that's not a problem.  In the case of a $10M credit, it would mean the team must pay out in the neighborhood of $8.6M more in a given year.  Some extra room to sign a young veteran (Jonathan Joseph perhaps) to a deserved extension without adversely affecting the 2009 cap.  For the Bengals, well, it's a problem.

Hopefully you understood all that.  If you didn't, here's the Cliff Notes:  Mike Brown is a cheapass who hates you and you shouldn't support him with your hard earned cash.  Bye for now.

Comments

[WC]

OMG! Do you understand what 'likely' means and what it infers? Obviously you don't because if you did, you'd know that a 'likely to be earned' incentive means that it has to have a chance to be, well, likely earned. In you example you cite Carson Palmer receiving a mythical LTBE incentive if he were to throw 475 Touchdown passes. Yes, it is subjective to a certain point but the law also holds that even subjective statements can be held to scrutiny and providing that they do not allow for actuality, they are then no longer able to be used to 'hide' under said subjectivity.

Now, if the terminology was changed to read: 'possible to be earned' incentives, that radically changes things but again, that terminology is subjective as it is known that no Quarterback (to use your example yet again) will EVER reach much more than a tenth of that number -- as evidenced by how many people in the history of the NFL that have thrown for 47 touchdowns in a season or more.

However, it could be argued that it is possible for someone to throw sixty-five touchdowns in a year but I think it can be agreed that this is not LIKELY to do -- hence an LTBE would not be usable to 'hide' behind. Remember, for something to be likely -- or even possible, it has to have a realistic chance of happening otherwise the terminology is invalid and if proven with intent to 'skirt rules and regulations (which, btw, is determined by legal proceedings -- not what the NFL says it is), -- fraudlulent!

This means that your 'posit' regarding this 'banking' is incorrect. The only thing about writing LTBE's that bears fruit is that a team can publish their salary numbers and make them look good (in the Bengal's case, they spend short and that looks very bad on them so 'cooking the books' so to speak makes it look like they've tried, it's just been bad fortune) when in fact, for all practical purposes, they are spending much less.

Here's the "Cliff Notes" proper version: Mike Brown has ALWAYS been a cheap-ass and certain people, like me, have been telling you that since the day he took over the team, yet some were too selfish, when they had a chance, to send Mikey Boy Brown packing back when the PBS Stadium Deal was being considered and he threatened to leave town.

Sorry folks, but that is the true and complete 'Cliff Notes' version.

[Showtime]

The likelihood of the player actually earning the incentive is a moot point.

I don't know if they use anything as extreme as 475 TD passes, but you can be sure that these specific types of cap-stretching LTBE incentives are never earned.

It's LTBE because someone (in this case, the team) called it such, not because of the actual probability of earning the incentive.

[Robert Brown]

Let me chime in. LTBE's are just that "likely". And there are very clear criteria in the CBA for that - the team can not just call it likely. A simple example is they could have restructured Carson's contract this year and added a LTBE for Touchdowns - say 20 for the season. That would have been deemed "likely" based on last years performance. However, it was a 100% guarantee Carson would not have reached that based on his injury.

Bottom line the Bengals never use this as a means to push cap space into future years.