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Predicted 53 Roster

this is a discussion within the Saints Community Forum; Originally Posted by Seer1 Don't quite understand the whole dead money thing. Originally Posted by halloween 65 I also do not understand thing either, and I don't care about it. When we are talking about "dead money" it's referring to ...

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Old 05-12-2013, 11:06 AM   #1
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Re: Predicted 53 Roster

Originally Posted by Seer1 View Post
Don't quite understand the whole dead money thing.

Originally Posted by halloween 65 View Post
I also do not understand thing either, and I don't care about it.


When we are talking about "dead money" it's referring to the guaranteed portion of the salary still owed to the player in question - usually in the form of the prorated signing bonus - which the team will still be on the hook if they cut the said player before his contract is up.

The term "dead money" comes from the fact that it directly reduces the salary cap by the same amount while not providing anything of substance in return, or at least that is how I've understood it.

For example, in the case of Chamberlain, when he signed the 3-yr contract with the Saints prior to last season, it included a $1.2M signing bonus. While Chamberlain immediately received that full amount to his bank account as soon as the ink had dried on the contract; the team is afforded the luxury of prorating that signing bonus into equal portions to count against the cap for each of the years on the said players contract. Signing bonuses are always guaranteed because the nature of the transaction doesn't allow for the money to be taken back once it's paid to the player signing the contract. So, when Chamberlain signed a 3-yr contract with a $1.2M signing bonus, it meant that the prorated amount of it would be $400K for each of the three years. He has been paid (from an accounting perspective) $400K of that $1.2M during last season, which still leaves $800K of guaranteed money on his contract. So, if the Saints were to cut him now - they'd still be on the hook for that remaining $800K (= dead money). If they decide to keep him around for this coming season, but cut him before next season - they'd end up saving $1.1M in cap as opposed to just $650K this offseason.

That probably ended up being an overcomplicated and unnecessarily long-winded explanation, but what can you do?

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Old 05-12-2013, 01:48 PM   #2
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Re: Predicted 53 Roster

Originally Posted by FinSaint View Post
When we are talking about "dead money" it's referring to the guaranteed portion of the salary still owed to the player in question - usually in the form of the prorated signing bonus - which the team will still be on the hook if they cut the said player before his contract is up.

The term "dead money" comes from the fact that it directly reduces the salary cap by the same amount while not providing anything of substance in return, or at least that is how I've understood it.

For example, in the case of Chamberlain, when he signed the 3-yr contract with the Saints prior to last season, it included a $1.2M signing bonus. While Chamberlain immediately received that full amount to his bank account as soon as the ink had dried on the contract; the team is afforded the luxury of prorating that signing bonus into equal portions to count against the cap for each of the years on the said players contract. Signing bonuses are always guaranteed because the nature of the transaction doesn't allow for the money to be taken back once it's paid to the player signing the contract. So, when Chamberlain signed a 3-yr contract with a $1.2M signing bonus, it meant that the prorated amount of it would be $400K for each of the three years. He has been paid (from an accounting perspective) $400K of that $1.2M during last season, which still leaves $800K of guaranteed money on his contract. So, if the Saints were to cut him now - they'd still be on the hook for that remaining $800K (= dead money). If they decide to keep him around for this coming season, but cut him before next season - they'd end up saving $1.1M in cap as opposed to just $650K this offseason.

That probably ended up being an overcomplicated and unnecessarily long-winded explanation, but what can you do?
Never knew that, thanks. I've never got into the money thing, only mine!!
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