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Bears sign Olsen / cap cost - estimate for Davis

Discussion in 'Chargers Fan Forum' started by Shamrock, Jul 4, 2007.

  1. Shamrock

    Shamrock New Member

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    The 31st pick in the 1st round, Greg Olsen, has signed with the Bears.
    pft.com rumormill

    Bears sign Olsen to five-year contract - ChicagoBears.com
    More .....

    Olsen, Bears work out unique five-year deal - ESPN - Pastabelly

    Besides limiting the player's chances of having to ever pay back any money if they get into trouble (why did Chicago do that?) this contract also pushes cap hits away from the initial year (2007) by using a 2nd year option bonus for the bulk of the "guaranteed" money. The bulk of the first year money is in the roster bonus, a one time cap hit that can't be paid back if the player defaults on his end of the bargain.

    The first year cap hit (1/5 of $250k signing bonus = $50k) + $720k + $285k = $1.055 million.

    Second year cap hit ($3.545 / 4 = .866) + (1/5 of $250k signing bonus = $50k) + $370k = $1.286 million.

    Third year = $1.476 million

    Those three cap hits do not include any of the $2.9+ mill that Olsen can earn in incentives/escalators. According to the pft.com link, Olsen can earn $578,700 in 2007 for playing in 35 percent of the offensive snaps. That seems fairly easily attainable. My guess is that is a NLTBE (not likely to be earned) incentive for a rookie, and would come off the Bears 2008 cap if he does earn it. The smart thing to do would be to make it a LTBE incentive, so that it would hit the cap this year, but doing so might make it difficult to fit all the draftee contracts into the rookie pool.

    If the incentive is NLTBE and he makes it then that pushes up the 2nd year cap hit to $ 1,864,700 (again, without including the other unspecified escalators/incentives).

    I'm not sure what the percentage difference in contract value is for pick #30 vs. #31. I would guess that the overall contract value would have $500,000 or less in difference, so basically add $100k to each of those cap hits, and we should see numbers fairly close for Craig Davis.
     

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