Cap affect of paying as you go vs pushing out and having dead space

This is what 4 year contracts do to the salary cap when you pay as you go vs pushing into the future.

Let’s say in both cases the player earns 20M per season for 4 seasons. (4 years 80M)

The first team pushes the larger hits later and takes 10M dead the year after the player leaves.

Cap hit 10M
Cap hit 15M
Cap hit 20M
Cap hit 25M
Cap hit 10M dead

The second team pays as they go
Cap hit 20
Cap hit 20
Cap hit 20
Cap hit 20
No dead money

But every year we add a new contract with the same structure. The first team keeps adding contracts to push out and the second team keeps paying as they go.

Salary caps are the same for both teams as the years go by. We’ll stop the pattern when it starts repeating and shows the full effect of each strategy.

100
100
120
120
145
145
170
170
200
200
240
240
290
290

1st team (team Gute)

Year 1 (Salary Cap 100M)
Player A counts 10M (10% of cap)
10% of cap used in total

Year 2 (Salary Cap 100M)
Player A counts 15M (15% of cap)
Player B counts 10M (10% of cap)
25% of cap used in total

Year 3 (Salary Cap 120M)
Player A counts 20M (17% of cap)
Player B counts 15M (12.5 of cap)
Player C counts 10M (8% of cap)
37.5% of cap used total

Year 4 (Salary Cap 120M)
Player A counts 25M (20% of cap)
Player B counts 20M (17% of cap)
Player C counts 15M (12.5% of cap)
Player D counts 10M (8% of cap)
58% of cap used total

Year 5 (Salary Cap 140M)
Player A counts 10M dead (7% of cap)
Player B counts 25M (18% of cap)
Player C counts 20M (14% of cap)
Player D counts 15M (11% of cap)
Player E counts 10M (7% of cap)
57% of cap used total

Year 6 (Salary Cap 140M)
Player A off books
Player B 10M dead (7% of cap)
Player C 25M (18% of cap)
Player D 20M (14% of cap)
Player E 15M (11% of cap)
Player F 10M (7% of cap)
57% of cap used total

Year 7 (Salary Cap 160M)
Player A off books
Player B off books
Player C 10M dead (6% of cap)
Player D 25M (16% of cap)
Player E 20M (13% of cap)
Player F 15M (9% of cap)
Player G 10M (6% of cap)
50% of cap used total


Team Polar Bear

Year 1 (Salary Cap 100M)
Player A 20M (20% of cap)
20% of cap used total

Year 2 (Salary Cap 100M)
Player A 20M (20% of cap)
Player B 20M (20% of cap)
40% of cap used total

Year 3 (Salary Cap 120M)
Player A 20M (16.5% of cap)
Player B 20M (16.5% of cap)
Player C 20M (16.5% of cap)
50% of cap used total

Year 4 (salary cap 120M)
Player A 20M (16.5% of cap)
Player B 20M (16.5% of cap)
Player C 20M (16.5% of cap)
Player D 20M (16.6% of cap)
67% of cap used total

Year 5 (salary cap 140M)
Player A off books
Player B 20M (14% of cap)
Player C 20M (14% of cap)
Player D 20M (14% of cap)
Player E 20M (14% of cap)
57% of cap used total

Year 6 (salary cap 140M)
Player A off books
Player B off books
Player C 20M (14% of cap)
Player D 20M (14% of cap)
Player E 20M (14% of cap)
Player F 20M (14% of cap)
57% of cap used total

Year 7 (salary cap 160M)
Player A off books
Player B off books
Player C off books
Player D 20M (12.5% of cap)
Player E 20M (12.5% of cap)
Player F 20M (12.5% of cap)
Player G 20M (12.5% of cap)
50% of cap used



This is the comparisons, same players paid the exact same dollar amounts and how it affects the cap

Year 1
Gute 10% cap used
Polar Bear 20% cap used

Year 2
Gute 25% of cap used
Polar Bear 40% cap used

Year 3
Gute 37.5% cap used
Polar Bear 50% of cap used

Year 4
Gute 58% of cap used
Polar Bear 67% of cap used



And here is where the dead space should start eating us alive


Year 5
Gute 57% of cap used
Polar Bear 57% of cap used

Year 6
Gute 57% of cap used
Polar Bear 57% of cap used

Year 7
Gute 50% of cap used
Polar Bear 50% of cap used

You need a hobby.

So pushing money into the future, you end up with the same players using the same amount of cap space as you would paying as you go.


If you stick with Tex’s plan of always pushing out, it’s true, you do no worse, but this clearly shows that you do no better after a few years of doing it, it catches up. The big downside of always being max pushed is that you can run into situations where you can’t take advantage of a really good opportunity because you’re always stretched thin.


The better strategy would be to stay in a spot where you have flexibility. As you can see above, the person pushing out gets no more talent than the person who’s responsible. So if you stay in the flexible area as your normal operating position, you have the option to make a push when you love your window or to just take advantage of good opportunities as they arise. Pushing ahead as a regular strategy has absolutely zero benefit.

Quote:

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Originally Posted by Joemailman

You need a hobby.

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I couldn’t picture how it would all work out. Since I was putting in the work, might as well share the results. But typing it on my phone is a lot more work than a sheet of paper, haha

But I think you can clearly see, if you always front load, or always back load, you’re really getting the same amount of talent. The only time you would see an advantage or disadvantage would be when you shift strategies and that would only be for a couple years one way or the other.

This is too simplistic. One problem is players know that money in future years is not guaranteed, so all things being equal they take money now over the same amount several years out.

So, in order to push money into future years teams give large signing bonuses. In pay as you go, you can cut an underperforming player with little consequences. With a large signing bonus, you have dead cap if you cut them.

Quote:

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Originally Posted by RashanGary

I couldn’t picture how it would all work out. Since I was putting in the work, might as well share the results. But typing it on my phone is a lot more work than a sheet of paper, haha

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Whoa.... wait a minute.... you're saying you did that all on your phone??

Holy cats. I, for one, am deeply impressed. I'm totally useless on those damned things. Takes me 6 minutes just to dial a number... and that's using speed dial. :worship:

The other thing to consider is that if you're talking about extensions or FA, other teams are also bidding for this player, and they may have a completely different philosophy on spending.
You can't just assume you can sign a player to a pay as you go contract... very few players will take that because they know they can be cut and see none of that money. For them it's all about how much guaranteed money they can get. In many cases they will take less if a larger portion is guaranteed because they know they are getting that no matter what happens.

Right, this was very simplistic in structure. It was intentionally simple to show that really small cap hits early pay for dead cap once you’re in the habit of pushing ahead more than what is common.

Roster bonuses that trigger the day of the signing are guarantees. The first years base is pretty much a guarantee. There are ways to take a bigger cap hit early or late and still give the same up front.

If you’re in the habit of really pushing it out, and taking the tiniest hits possible early, you end up with dead space. What’s shown here is that you can function without a disadvantage as long as you’re continually pushing out to the same degree.

So Tex was right that you just keep pushing out to fix it.
He was wrong that it’s an advantage because after a few years, the dead cap nullifies any advantage you might have had when you went to the new way.

The common view was wrong that it cap straps you because like Tex always said, you just keep doing the same thing.



I was glad to see it in practice. Pushing out more is no advantage if it’s your regular practice. It’s better to be in a flexible spot as your main operation and then use the pushing out when there is a window or a special opportunity.

Quote:

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Originally Posted by sharpe1027

This is too simplistic. One problem is players know that money in future years is not guaranteed, so all things being equal they take money now over the same amount several years out.

So, in order to push money into future years teams give large signing bonuses. In pay as you go, you can cut an underperforming player with little consequences. With a large signing bonus, you have dead cap if you cut them.

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Thank you for using the word "simplistic" mostly correctly. It bugs me that people don't understand or seem to understand the difference between "simple" and "simplistic."

Hmm. Maybe I need a hobby, too.

Quote:

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Originally Posted by Fritz

Thank you for using the word "simplistic" mostly correctly. It bugs me that people don't understand or seem to understand the difference between "simple" and "simplistic."

Hmm. Maybe I need a hobby, too.

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You're welcome, mostly. Are you using "mostly" mostly correctly, or is there something wrong with my use of the word "simplistic"? I think the analysis was over simplified in a way that can be misleading.

Quote:

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Originally Posted by RashanGary

Right, this was very simplistic in structure. It was intentionally simple to show that really small cap hits early pay for dead cap once you’re in the habit of pushing ahead more than what is common.

Roster bonuses that trigger the day of the signing are guarantees. The first years base is pretty much a guarantee. There are ways to take a bigger cap hit early or late and still give the same up front.

If you’re in the habit of really pushing it out, and taking the tiniest hits possible early, you end up with dead space. What’s shown here is that you can function without a disadvantage as long as you’re continually pushing out to the same degree.

So Tex was right that you just keep pushing out to fix it.
He was wrong that it’s an advantage because after a few years, the dead cap nullifies any advantage you might have had when you went to the new way.

The common view was wrong that it cap straps you because like Tex always said, you just keep doing the same thing.



I was glad to see it in practice. Pushing out more is no advantage if it’s your regular practice. It’s better to be in a flexible spot as your main operation and then use the pushing out when there is a window or a special opportunity.

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You're missing the point. if you push out cap into future years with signing bonuses, you'll have less money in those future years than if you don't. This gets worse when you factor in that when you don't push out cap you can get rid of underperforming players and bring in better players with the money you have extra due to less dead space. Add to that injuries and trades as being more problematic because they can accelerate cap and you start to see why large signing bonuses to push out cap are riskier.

Quote:

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Originally Posted by Fritz

Thank you for using the word "simplistic" mostly correctly. It bugs me that people don't understand or seem to understand the difference between "simple" and "simplistic."

Hmm. Maybe I need a hobby, too.

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Was I being redundant?

Quote:

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Originally Posted by sharpe1027

Was I being redundant?

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Yeah. I'm nitpicking. Since "simplistic" already means so simple that it denotes a lack of understanding of the issue, the use of "too" is, well, too much.

But your overall point - which is the main thing - is a good one.

As for the thread topic, well, this is definitely not my area of expertise. I just know I don't like credit card debt. And the Packers definitely seemed constrained last year and this year, thanks to Guter "running it back" a couple years ago.

Quote:

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Originally Posted by Fritz

Thank you for using the word "simplistic" mostly correctly. It bugs me that people don't understand or seem to understand the difference between "simple" and "simplistic."

Hmm. Maybe I need a hobby, too.

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:lol: Now I gotta due some diggin

Quote:

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Originally Posted by sharpe1027

You're missing the point. if you push out cap into future years with signing bonuses, you'll have less money in those future years than if you don't. This gets worse when you factor in that when you don't push out cap you can get rid of underperforming players and bring in better players with the money you have extra due to less dead space. Add to that injuries and trades as being more problematic because they can accelerate cap and you start to see why large signing bonuses to push out cap are riskier.

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That is true if you’re willing to push out at some point. If you’re in “keep cap health” mode and you intend to always stay there, you absolutely do not have more to spend. The very nature of that is to take hits earlier than late. That offsets the dead money of always pushing forward.

Whether you always keep a healthy cap or always max it out, I have no doubt you are wrong that you end up having less to pay for talent.

However, the moment you switch strategies, for a couple years you will have more or less.

I believe the best strategy is a flexible strategy that is driven by “opportunity”

You can’t choose when a specific position drops to you in the draft
You can’t choose when an ideal free agent class drops to you
You can’t choose which guys lose their health
You can’t choose when you land a particularly good couple drafts, nor can you choose when you have a tough stretch



If you’re always pushing forward to max, you can’t choose when to make an extra splash that takes advantage of an opportunity, nor can you choose to do that if you’re rigid in staying in a certain cap health situation.

However, your cap health is 100% something, as a GM, you have complete control over. So I believe using that flexibility to surf the wave of opportunity is the way to go.

Here's the bottom line. A team needs to stretch the cap a bit WHEN THEY HAVE TALENT ON ROSTER. Its fine to make sure you lock up players who are successful in your system and extend windows. My gripe is thinking you can pay every FA on the market and buy championships. It doesn't work for a variety of reasons. And when you get carried away with it you end up with a cap situation that forces you to jettison valuable talent. 5-6 years from now, aprh and assuming progression rather than regression we will have a lot of talent up for contracts. I have no problem stretching the cap to keep them. An occasional FA signing to fill a hole even makes sense. However the Smith contracts went 50%. Turner ended up costing us for an average player. I forget who the 4th signing was that year which leads me to believe it cost us. Maybe not, I don't recall.

We tried to buy a title and came up short. Then we way overpayed our QB because he was upset. We won't be clear of that issue until after next year, but we really could use a FA safety this year. You can kick the cap, but there are limitations.

Quote:

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Originally Posted by bobblehead

Here's the bottom line. A team needs to stretch the cap a bit WHEN THEY HAVE TALENT ON ROSTER. Its fine to make sure you lock up players who are successful in your system and extend windows. My gripe is thinking you can pay every FA on the market and buy championships. It doesn't work for a variety of reasons. And when you get carried away with it you end up with a cap situation that forces you to jettison valuable talent. 5-6 years from now, aprh and assuming progression rather than regression we will have a lot of talent up for contracts. I have no problem stretching the cap to keep them. An occasional FA signing to fill a hole even makes sense. However the Smith contracts went 50%. Turner ended up costing us for an average player. I forget who the 4th signing was that year which leads me to believe it cost us. Maybe not, I don't recall.

We tried to buy a title and came up short. Then we way overpayed our QB because he was upset. We won't be clear of that issue until after next year, but we really could use a FA safety this year. You can kick the cap, but there are limitations.

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Yes. With the attention spans of people (me included) it’s hard to get people to invest time reading the amount of words it would take to explain a bunch of the factors. Unless they’re a proven professional, you just don’t want to spend the energy reading some fans opinion.

But, right.

Adrian Amos was the 4th and nobody wants to keep him for some reason, so he can’t be that good. Maybe it’s personality because his play seemed fine.


When you draft a guy, you have his whole medical history from 4 years in the NFL. You know what kind of guy he is. You know what his assignments were so you have a better gauge on his play. It always looks scary when someone puts their hand in a lions mouth, but when you raised the little guy, you have enough information to make an informed decision on whether it’s safe to put your hand in his mouth.

Huge contracts that go bad for a GM are about as bad for your career as getting your arm chewed off by a Lion is for your physical health. You better be sure Simba has your best interest before you start letting him playfully chew your forearm.


So, was Ted a coward who wouldn’t spend in UFA or was he the guy holding the camera while his buddies got their arms chewed off petting the lions through the cage at the zoo? The world may never know.

But whether the world knows or not, I agree. UFA is dangerous. Not the kind of dangerous where you call your buddy a pussy for chickening out, but the kind of dangerous where maybe you get your arm chewed off. I’d rather be holding the camera.

I'm not saying one approach is inherently better than the other. I am saying they aren't equivalent.