Post-Draft Around the League (non Ravens news)

[GOTA]

And you are required to spend a set percentage of the salary cap minimally.
So the money would have to be spent anyway.
If we have a CPA here they can correct or verify, but the dead money is not real cash, it is only accounting journaling. The money was spent in the past (prorated, the player gets the money and the team amortizes the debt over the life of the contract).
The Browns are not losing any real dollars ... players this year aren't getting as much cash paid to them because other players got it in past years (or Osweiler this year but that bought a 2nd round draft pick so the money wasn't flushed, just creatively spent for something else.)

Now unless you are a Bidwell this can't go on forever, (Bidwell was a cheapskate) ... the money will have to be invested in players, they are moneyball tinkering the timing of it

Dead money is not new money that has to be spent, unless you have salary that is guaranteed or offset language like Brock. However, it's money that was spent for a service to be provided. It's a bonus for future services as opposed to most of us who would get a bonus for what we did in the past.

That is why when a player retires teams will often exercise their right to have a prorated portion of the signing bonus returned to them. That was money given for a service that was never provided and teams want a refund. When you cut a player there is no way to get that unearned bonus back.

Take Alex Boone who the Vikings just released. A year ago he signs a 4 year $26.8 million deal with $10 million guaranteed. That $10 million was paid at once but it's earned over 4 years. $7.5 million is dead money. $2.5 was earned. Nothing new was paid out but if I'm the owner I'd be pretty pissed at my football people for talking me into writing a $10 million check that was supposed to be for 4 years of service and just getting a year out of it. The money is gone either way but now I have dead money against my cap and I have to pay his replacement. Poor evaluation can really hurt the cap and the wallet.

By the way I am an accountant but these are NFL accounting rules and not generally accepted accounting principles. Our buddy Ravor could be a farmer for all I know but he understand NFL accounting much better than I ever will. You don't need to be an accountant to understand it.

[Rxdoxx]

Dead money is not new money that has to be spent, unless you have salary that is guaranteed or offset language like Brock. However, it's money that was spent for a service to be provided. It's a bonus for future services as opposed to most of us who would get a bonus for what we did in the past.

That is why when a player retires teams will often exercise their right to have a prorated portion of the signing bonus returned to them. That was money given for a service that was never provided and teams want a refund. When you cut a player there is no way to get that unearned bonus back.

Take Alex Boone who the Vikings just released. A year ago he signs a 4 year $26.8 million deal with $10 million guaranteed. That $10 million was paid at once but it's earned over 4 years. $7.5 million is dead money. $2.5 was earned. Nothing new was paid out but if I'm the owner I'd be pretty pissed at my football people for talking me into writing a $10 million check that was supposed to be for 4 years of service and just getting a year out of it. The money is gone either way but now I have dead money against my cap and I have to pay his replacement. Poor evaluation can really hurt the cap and the wallet.

By the way I am an accountant but these are NFL accounting rules and not generally accepted accounting principles. Our buddy Ravor could be a farmer for all I know but he understand NFL accounting much better than I ever will. You don't need to be an accountant to understand it.

Ok.

But dead money does lower the amount that can be spent on salaries in a given year, yes?

So if I have $150mil allocated for salary, but have $15million dead, I can only spend a maximum of $135mil this year, at least that is how I read things, so I have $15mil coming back into my pocket even though it might have been a bad investment earlier ...
whenever I made a bad investment I would be delighted to recover the money, and as far as I can see (you as a CPA may know differently) the NFL team has no net loss, me on the other hand lost hard earned cash .. or am I missing some twist? TY

[arnie_uk]

By the way I am an accountant

Snap! Are you in a large international firm or just a smaller local one?

[alien bird]

Ok.

But dead money does lower the amount that can be spent on salaries in a given year, yes?

So if I have $150mil allocated for salary, but have $15million dead, I can only spend a maximum of $135mil this year, at least that is how I read things, so I have $15mil coming back into my pocket even though it might have been a bad investment earlier ...

I don't think so. Dead money is money already spent on a player. It's the guaranteed portion of the contract spread over the life of the contract. Cutting a player before the contract is complete requires that guaranteed money to still be paid out. No owner is getting money back in his pocket. If there is a 4 year contract with $10 million bonus guaranteed, that is spread out $2.5M for cap purposes, but it's still $10M out of the owner's pocket that can't be recouped by cutting the player before that contract is up. Dead money lowers the amount a team can spend in a given year, but there isn't anything coming back to the owner. The NFL does have an 89% rule, but it's spending 89% of the maximum cap space over a period of four years. A team pushing against the cap for 2-3 years can really underspend in year 4 and still be within the 89%. But that's not money they are getting back from a bad contract.

[GOTA]

Snap! Are you in a large international firm or just a smaller local one?

Neither anymore. I went private and am the Controller for a firm. I like that a lot better than public accounting.

[arnie_uk]

Ok.

But dead money does lower the amount that can be spent on salaries in a given year, yes?

So if I have $150mil allocated for salary, but have $15million dead, I can only spend a maximum of $135mil this year, at least that is how I read things, so I have $15mil coming back into my pocket even though it might have been a bad investment earlier ...
whenever I made a bad investment I would be delighted to recover the money, and as far as I can see (you as a CPA may know differently) the NFL team has no net loss, me on the other hand lost hard earned cash .. or am I missing some twist? TY

Not really. The players are still going to be paid the same regardless of whether you have 50 or 5 mil worth of dead money.

In your scenario your just going to have to pay the players more in years 2 3 4 or a higher signing bonus (split over the life of the contract for cap purposes) to make up the shortfall you can pay them in year one.

You'll be taking that 15 mil and pushing it to the following year if you want to be competitive

[arnie_uk]

Neither anymore. I went private and am the Controller for a firm. I like that a lot better than public accounting.

Entertained that idea, moving to industry and being the accountant for one large firm. Also considered going out on my own but not sure I'd get the client base built up enough. Guaranteed wage weighs heavy on that decision!

[GOTA]

Ok.

But dead money does lower the amount that can be spent on salaries in a given year, yes?

So if I have $150mil allocated for salary, but have $15million dead, I can only spend a maximum of $135mil this year, at least that is how I read things, so I have $15mil coming back into my pocket even though it might have been a bad investment earlier ...
whenever I made a bad investment I would be delighted to recover the money, and as far as I can see (you as a CPA may know differently) the NFL team has no net loss, me on the other hand lost hard earned cash .. or am I missing some twist? TY

Not salaries. It lowers the amount you can spend against the cap. Cap numbers are salaries plus bonuses plus dead money. When a player is released all that bonus that would have been prorated over multiple years now goes against the cap this year. Teams can split it over 2 calendar years but lets keep it simple.

In the Boone example that $7.5 would have been $2.5 against the cap for the next 3 years. He's cut so the whole $7.5 goes against the cap this year. That's what is known as dead money.

In your example that $15 million doesn't come back into your pocket because you already paid it out. It is a bad investment or a sunk cost. However, remember that you are now paying other guys bonuses that are allocated over future years so you never are truly spending $150 million even if the cap is $150 million. For example the Giants last year spent $169 million in cash. The cap was $155 million.

The cash output is not the same as the cap. Therefore just because you have dead money doesn't mean you will spend less. Sign a bunch of players to 5 year contracts and you can easily spend a ton of cash even with the restrictions of the dead money against the cap. That's why as an owner you can't be happy with dead money. Paying almost $16 million to Brock who isn't on my team with the justification of receiving a 2nd round pick is just ridiculous.

[xiao_ke]

Ravens RB Taquan Mizzell claimed off waiver by Chicago Bears

[GOTA]

Entertained that idea, moving to industry and being the accountant for one large firm. Also considered going out on my own but not sure I'd get the client base built up enough. Guaranteed wage weighs heavy on that decision!

You can do a lot with it beyond just taxes and audits. Right now I work in the Architecture/Engineering industry. I run the accounting and finances of the firm. What often happens is employees of public accounting firms gets offers from their clients to work for them instead. That's what happened to me and I have no regrets about leaving public accounting behind. I'd rather build the firm I work for than just be a hired gun working on individual projects and problems.

I don't know if that's how it works in the UK but it's pretty common in the US. About 15 years ago I worked with a guy in public accounting who did end up getting an accounting job with the Jaguars high up in their finance department. Accounting can lead to working in pretty much any industry.

[NOLARavenFAN]

http://www.espn.com/nfl/story/_/id/2...athan-williams

Bills release #2 RB, Jonathan Williams

[NOLARavenFAN]

Adam Schefter‏Verified account @AdamSchefter 4m4 minutes ago




For the coming season, Denver will pay QB Brock Osweiler $775,000 and Cleveland will pay him $15.225 million.

You can't teach stupid, its evidently in the water in Ohio.