A.T.E - Smith's contract

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swine
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A.T.E - Smith's contract

Postby PigSkin » Sat Feb 14, 2004 7:58 am

What harm would it do the Skins to cut Bruce Smith now please?

swine
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Postby PigSkin » Sat Feb 14, 2004 11:49 am

OK - I saw the earlier post on this. Sorry I didn't catch it earlier. :?

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Postby BossHog » Sat Feb 14, 2004 1:00 pm

I'm glad you found it, and i'm sorry nobody got a link to you... i figured since we have a thread here though, that I would post the bulk of the explanation here too:

How about I use Bruce Smith's exact example though and see if it clears a few things up...

Bruce Smith would have a cap number of $8.835 million in 2004 if he were to play for the Redskins. 6.5 million of that is his salary and 2.335 million is the signing bonus.

breath.

So the Redskins are waiting for Bruce to retire because of the BARRY SANDERS rule not the Deion rule... Deion got almost all of his money. Barry had to pay back the portion of his signing bonus that he didn't fulfill in his contract.

So if Bruce were to retire, it would be possible to get his 2.335 mil signing bonus to, though I don't think it's actually a foregone conclusion, and we would actually save $8.835 million if that were to happen.

breath.

Now let's assume that Bruce DOESN'T retire and obviously we are not going to pay him that money, or any amount for that matter. So he would be cut.

breath.

So that creates two scenarios in the free agent world... cut before june 1st, and cut after June 1st. What's the difference?

breath.

If a player is cut BEFORE June 1st, then whatever is left of his signing bonus is added to this year's cap number for the team. So in Bruce's case... we would save $6.5 million of his $8.835 cap number and he would cost the Redskins $2.335 million off of the 2004 cap. So, to recap:

Possible hit: $8.835 mil (this is the value used in the Reskins team cap)
Actual hit: $2.335
Cap Savings: $6.5 million

breath.

Cut after June 1st....

If a player is cut AFTER June 1st, the team is allowed to pro rate the remainder of the signing bonus over two years. It is not quite as simple as ciutting it in half, but that is what happens in this particular instance.

So... in the case of Bruce Smith...

His $2.335 million bonus could then be spread out over two years...
Possible 2004 hit: $8.835 million
Actual 2004 hit: $1.1675 million ($2.335M / 2)
2005 cap hit: $1.1675 million ($2.335M / 2)

2004 Cap savings would then be $8.835M - $1.1675M = $7.6675M

So... summing up:

If Bruce retires we could save $8.835M
If we cut him after June 1st, we will save $7.6675M
If we cut him before June 1st, we will save $6.5M

Whew... that's it.
Sean Taylor was one of a kind, may he rest in peace.

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