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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 AsylumGuido 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 ...

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Old 03-15-2021, 01:58 PM   #14
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Re: Taysom Hill creates $7.75 million in cap space with special accounting restructuring

Originally Posted by AsylumGuido View Post
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.


”...salary is not "dead weight/dead money" because it not guaranteed

Incorrect, salaries can be anything all the way up to “fully guaranteed”. - From the NFL’s web page defining “Dead Money”:

Dead money: Refers to salary a team has already paid or has committed to paying (i.e., a signing bonus, fully guaranteed base salaries, earned bonuses, etc.) but has not been charged against the salary cap.

https://www.nfl.com/news/2020-nfl-fr...p3000001106817

Andrew Brandt was the Packer’s Vice President of Finance, he was a key member in managing a cap for over a decade. Actually, he managed the transfer of contracts from Brett Favre to Aaron Rodgers. I trust him when he says the following:

“Dead money is cap accounting for players no longer on a team’s roster, “dead weight” that hamstrings teams from signing “live” players.”

&

Cap gurus magically create cap room by moving it into future years.

“No. You could do that and, sorry, no, you wouldn’t be a cap guru. You could take a big salary or a big bonus (not currently prorated), turn it into signing bonus (prorated) and, in the stroke of the player’s pen, cap room would magically appear and the problem would be deferred, although not solved.”

And I trust the NFL’s def’n of “dead money” above. We can debate the philosophical differences in managing an NFL team’s cap, but the def’n of dead money is defined, unambiguously, by the NFL. Seriously..., do you just wake up in the morning and decide to make crap up?
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