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Packers tried to trade for Jonathan Taylor
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<blockquote data-quote="mradtke66" data-source="post: 1004609" data-attributes="member: 4199"><p>They are akin to a contract where the last 1, 2, or 3 years have high base salaries that make it likely the team will cut a player when those higher base salaries are due. Consider three similar, 5 year contracts, all with a 10M signing bonus, and a base salary of 500k per year for years 1-3, and a 3 year contract with a 10M signing bonus and base salary of 500k/year. I'm also ignoring Pre/Post June 1 details, but understand in that world, the last 2 years of prorated bonus MAY be able to be split over years 4 and 5.</p><p></p><p>Ballon base salary in year 4 and 5 of 10M per year:</p><p>10M bonus, 2M per year prorated.</p><p>Year 1 total cap: 2.5M</p><p>Year 2 total cap: 2.5M</p><p>Year 3 total cap: 2.5M</p><p>Year 4 potential cap hit: 12.5M. NOPE, player is cut. </p><p>Dead cap: 4M, the remaining 2 years of prorate bonus money due right now. Again, ignoring June 1 magic.</p><p></p><p>Standard 5 year contract, 500k per year, but for whatever reason, the player has hit the wall by year 4 and is cut after year 3.</p><p>10M bonus, 2M per year prorated.</p><p>Year 1 total cap: 2.5M</p><p>Year 2 total cap: 2.5M</p><p>Year 3 total cap: 2.5M</p><p>Year 4 potential cap hit 2.5M. NOPE, player is cut. </p><p>Dead cap: 4M, the remaining 2 years of prorate bonus money due right now. Again, ignoring June 1 magic.</p><p></p><p>Void years contract, 3 years intended, years 4 and 5 are the void years. They "exist" but allow the cap hit to be spread over future years, lowering the prorated bonus number for the non-void years. 500k per year base salary.</p><p>10M bonus, 2M per year prorated.</p><p>Year 1 total cap: 2.5M</p><p>Year 2 total cap: 2.5M</p><p>Year 3 total cap: 2.5M</p><p>Year 4 None. Contract automatically voids after year 3's Super Bowl. Or pick whatever date you want. </p><p>Dead cap: 4M, the remaining 2 years of prorate bonus money due right now. Again, ignoring June 1 magic.</p><p></p><p>So why would a team do that? Look at the void year example if it were just a 3 year contract, which is what it is intended to be.</p><p>500k per year base salary.</p><p>10M bonus, 3.33M per year prorated.</p><p>Year 1 total cap: 3.83M</p><p>Year 2 total cap: 3.83M</p><p>Year 3 total cap: 3.83M</p><p></p><p>Over the three intended years of the deal, Void vs. 3 year-straight up, you've saved 1.33M per year against the cap. There is a cost at the end because you don't get cap space money for free, but you were probably more competitive in those first three years with that extra cap space to allocate everywhere. And the cap is likely higher in year 4, so that 4M is likely less of a hindrance.</p><p></p><p></p><p></p><p>That's just dealing with the bonus money. The player already go paid that money, which is why they have to take the hit. It's gone. It's paid. Now you've just gotta balance the books.</p><p></p><p>More generically, players like money. This is their job, after all. And money in the hand now, today is worth more than the same money tomorrow. Opportunity cost of money and all that jazz. AND teams are less likely to cut players early in the contract as the dead cap accelerates to whenever the contract ends, so in our 10M example above, if the player were to be cut after year 1, boom, 8M dead cap hit. Players also like stability, it turns out.</p><p></p><p>So should team do that? Maybe. It's a little borrowing from the future, it's a little making a short-term push while you have a good core of players. Right now, the Packers probably shouldn't add new contracts with void years as we don't really know what we have on the whole. However, if we make the Division Round and things look great for 2024, then it should at least be considered for extensions. Of course <strong>that</strong> said, with the Rodgers hits expiring for the 2024 season, we might have enough room to not need to do so.</p></blockquote><p></p>
[QUOTE="mradtke66, post: 1004609, member: 4199"] They are akin to a contract where the last 1, 2, or 3 years have high base salaries that make it likely the team will cut a player when those higher base salaries are due. Consider three similar, 5 year contracts, all with a 10M signing bonus, and a base salary of 500k per year for years 1-3, and a 3 year contract with a 10M signing bonus and base salary of 500k/year. I'm also ignoring Pre/Post June 1 details, but understand in that world, the last 2 years of prorated bonus MAY be able to be split over years 4 and 5. Ballon base salary in year 4 and 5 of 10M per year: 10M bonus, 2M per year prorated. Year 1 total cap: 2.5M Year 2 total cap: 2.5M Year 3 total cap: 2.5M Year 4 potential cap hit: 12.5M. NOPE, player is cut. Dead cap: 4M, the remaining 2 years of prorate bonus money due right now. Again, ignoring June 1 magic. Standard 5 year contract, 500k per year, but for whatever reason, the player has hit the wall by year 4 and is cut after year 3. 10M bonus, 2M per year prorated. Year 1 total cap: 2.5M Year 2 total cap: 2.5M Year 3 total cap: 2.5M Year 4 potential cap hit 2.5M. NOPE, player is cut. Dead cap: 4M, the remaining 2 years of prorate bonus money due right now. Again, ignoring June 1 magic. Void years contract, 3 years intended, years 4 and 5 are the void years. They "exist" but allow the cap hit to be spread over future years, lowering the prorated bonus number for the non-void years. 500k per year base salary. 10M bonus, 2M per year prorated. Year 1 total cap: 2.5M Year 2 total cap: 2.5M Year 3 total cap: 2.5M Year 4 None. Contract automatically voids after year 3's Super Bowl. Or pick whatever date you want. Dead cap: 4M, the remaining 2 years of prorate bonus money due right now. Again, ignoring June 1 magic. So why would a team do that? Look at the void year example if it were just a 3 year contract, which is what it is intended to be. 500k per year base salary. 10M bonus, 3.33M per year prorated. Year 1 total cap: 3.83M Year 2 total cap: 3.83M Year 3 total cap: 3.83M Over the three intended years of the deal, Void vs. 3 year-straight up, you've saved 1.33M per year against the cap. There is a cost at the end because you don't get cap space money for free, but you were probably more competitive in those first three years with that extra cap space to allocate everywhere. And the cap is likely higher in year 4, so that 4M is likely less of a hindrance. That's just dealing with the bonus money. The player already go paid that money, which is why they have to take the hit. It's gone. It's paid. Now you've just gotta balance the books. More generically, players like money. This is their job, after all. And money in the hand now, today is worth more than the same money tomorrow. Opportunity cost of money and all that jazz. AND teams are less likely to cut players early in the contract as the dead cap accelerates to whenever the contract ends, so in our 10M example above, if the player were to be cut after year 1, boom, 8M dead cap hit. Players also like stability, it turns out. So should team do that? Maybe. It's a little borrowing from the future, it's a little making a short-term push while you have a good core of players. Right now, the Packers probably shouldn't add new contracts with void years as we don't really know what we have on the whole. However, if we make the Division Round and things look great for 2024, then it should at least be considered for extensions. Of course [B]that[/B] said, with the Rodgers hits expiring for the 2024 season, we might have enough room to not need to do so. [/QUOTE]
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