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Taysom Hill creates $7.75 million in cap space with special accounting restructuring

this is a discussion within the Saints Community Forum; Originally Posted by gosaints1 From Andrew Brandt: “Dead money is cap accounting for players no longer on a team’s roster, “dead weight” that hamstrings teams from signing “live” players. We have now seen—within the last month—the two largest dead-money charges ...

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Old 03-15-2021, 12:33 PM   #13
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Re: Taysom Hill creates $7.75 million in cap space with special accounting restructuring

Originally Posted by gosaints1 View Post
From Andrew Brandt:

“Dead money is cap accounting for players no longer on a team’s roster, “dead weight” that hamstrings teams from signing “live” players. We have now seen—within the last month—the two largest dead-money charges in NFL history in Jared Goff and Carson Wentz. These contracts were structured as if there was no way on God’s green earth the teams would exit them early—with tens of millions of future proratable monies (large signing bonuses, guaranteed option and roster bonuses, etc.) pushed out into future years as unamortized proration. Therein lies the rub. When a player separates—through release or trade—all unamortized proration accelerates on the team’s cap.”


https://www.si.com/nfl/2021/03/02/bu...cap-dead-money

It’s “dead-weight”, and prevents you from signing active players. Right now, as we speak, we ARE paying >10% of our salary cap..., on players who aren’t playing for us.

Describe it how you would like but it’s unambiguously a waste of money..., and “dead weight”.
You can look at it as "dead weight", if you wish, but it is definitely accounting for services already rendered in the form of signing bonuses and converted roster bonuses. These bonuses are not pay to play. They are pay to be on the roster at the time of payment. Pay to play is salary and salary is not "dead weight/dead money" because it not guaranteed.

Dead money is simply cap used in a prior period. It is not wasted cap. And given the fact that the cap will continue to rise annually (COVID-19 2021 is the lone exception), anything pushed to a future period signifies a lower and lower percentage of the total cap the further out it is pushed. It is perfectly sound cost accounting management. You get more bang for your buck than with same period accounting.

It is the same reason why businesses borrow money for operations, as opposed to using cash on hand, in a revenue growth environment where the revenue grows at a faster pace than the interest on the borrowed funds.

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