1. Welcome to San Diego Chargers NFL Football Podcast and Forum!

    Bolt Talk is one of the largest online communities for the San Diego Chargers. We host a regular Chargers podcast during the season. You are currently viewing our community forums as a guest user.

    Create an Account or

    Having an account grants you additional privileges, such as creating and participating in discussions. Furthermore, we hide most of the ads once you register as a member!
    Dismiss Notice

No wonder we're not talking to any free-agents:

Discussion in 'Chargers Fan Forum' started by Thunderstruck, Mar 7, 2007.

  1. Thunderstruck

    Thunderstruck BoltTalker

    Joined:
    Aug 16, 2006
    Messages:
    1,981
    Ratings:
    +272
    The league has reduced our salary-cap. :icon_evil:

    http://www.nfl.com/news/story/10045377

    That kinda sucks. I figured we were probably still around five or six million under the cap...but not if our cap number has been reduced by $2.6 million. :no:
     
    • Like Like x 1
  2. reef shark

    reef shark BoltTalker

    Joined:
    Sep 22, 2006
    Messages:
    937
    Ratings:
    +49
    its confusing how a player's overachievement can actually hurt the team financially the next year... if a player earns his incentives, it would make sense if his salary increased the next year, or if he got some type of bonus. but what i dont get is this "not likely to be earned" type of incentive, how do they judge this crap?
     
  3. Thunderstruck

    Thunderstruck BoltTalker

    Joined:
    Aug 16, 2006
    Messages:
    1,981
    Ratings:
    +272
    When a team writes an incentive into a player's contract, they get to choose if it's "likely to be earned" or "unlikely to be earned."

    If it's "likely to be earned" then they must add it to that year's salary cap.

    If it's "unlikely to be earned" then they don't have to add it to that year's cap.

    Here's a possible scenario that might have burned the Chargers. I don't know that this is what happened, but it demonstrates how you can be hurt.

    We know Philip Rivers has several incentives in his contract. One of them might have been an incentive that pays him $2 million if he is voted into the pro-bowl. Now, prior to the season, the Chargers may have felt that this was unlikely, since it was PR's first year as a starter, so they designated the incentive as unlikely to be earned. They did not count that $2 million under the '06 cap. But when Philip made the pro-bowl, he earned the incentive. That means he got paid an additional $2 million more than what the Chargers had allocated for him under the cap.

    Obviously, the NFL has to account for this, otherwise teams would use incentives as an easy loop-hole to avoid the salary cap by just writing easy incentives into every player's contract. (Shawne Merriman, your contract pays you the league-minimum, but if you make 1 tackle in 2007 you make a $5 million bonus.) Obviously, the NFL has to control that. So, they take that money off your next cap.

    The reverse is the "likely to be earned" designation. If a team designates an incentive as "likely to be earned" then the team must account for that incentive under the cap. So if a player has a $1 million salary, and a $1 million LTBE incentive, that player takes up $2 million of your salary cap. But what if that player fails to earn the incentive? You only had to pay him $1 million but he cost you $2 million under the cap. So the NFL credits the team that $1 million under their next year's cap.

    The problem is that some teams use that as a loop-hole. The Vikings are notorious for it. If they have $3 million of available cap space at the end of training camp when their roster is set, they'll write an incentive into a player's contract. For example, they'll write an incentive for Ben Leber that says if he leads the team in scoring he makes $3 million. Then they call it a "likely to be earned incentive," even though it's almost impossibe for the player to earn. The $3 million comes off that year's salary cap, but the Vikings get to carry that money over to the next year's cap because there's no way Ben Leber will lead the team in scoring.

    I guess it's a smart way to take the money you don't spend one year and use it to increase your cap the next year, but it also seems a bit unscrupulous to me. That's not what why the rule was created.
     
    • Like Like x 1
  4. reef shark

    reef shark BoltTalker

    Joined:
    Sep 22, 2006
    Messages:
    937
    Ratings:
    +49
    i think this puts a stamp on michael turners *** outta here. after the re-signings and extensions, how can the team afford to keep this guy? i dont see how his value will decrease, hes not going to drop passes and blow blocking assignments. if he gets the same kinds stats 3 yrs in a row he will be getting all types of incentives. i say f u to that, let smith keep draftin mid round RBs hes pretty good at it.
     
  5. KimPossible

    KimPossible BoltTalker

    Joined:
    Jun 23, 2006
    Messages:
    3,495
    Ratings:
    +1,054

    Thanks for helping me understand this better Thunderstruck...the financial side of football is sort of confusing to me...
     
    • Like Like x 1
  6. HEXEDBOLT

    HEXEDBOLT Don't like it, lump it!!!

    Joined:
    Jul 11, 2006
    Messages:
    14,279
    Ratings:
    +1,886
    At least we have 26? players signed for at least 3 years, I don't see much room on the roster to be adding guy's just to be inking deals. Kind of a good situation to be in, besides homegrown always seem's to be better.:bolt2:
     
  7. getfresh

    getfresh Well-Known Member

    Joined:
    Jan 4, 2007
    Messages:
    50
    Ratings:
    +6

    I'm thinking the cap number for the extra first round pick would be about the same as the one year $2.something million for Turner, so it's a wash. I could be wrong, but I don't think this has any bearing on Turner.
     
  8. Trumpet_Man

    Trumpet_Man Well-Known Member

    Joined:
    Feb 14, 2006
    Messages:
    18,996
    Ratings:
    +654
    If a player does not achieve what are called contractural "likely to be earned" incentives, it becomes a cap credit for the following year.

    This allows a "flexible cap over the salary cap" in essence.

    That is a bit misleading and one needs to know how it works.

    For instance, if Rivers had a clause which said if he took 50% of the snaps in 2006, he gets a $3 million bonus BUT the dude gets hurt.

    That money is charged to the present (his bonus likely to achieve but did not because he got hurt) but is credited to next years cap.

    It is basic accounting.
     
  9. Thunderstruck

    Thunderstruck BoltTalker

    Joined:
    Aug 16, 2006
    Messages:
    1,981
    Ratings:
    +272
    Right. But on the same token, if the player earns an UNlikely to be Earned incentive, that money gets billed to your next salary cap because it wasn't accounted for on the present cap. So if the Chargers had designated that Rivers incentive as unlikely to be earned, like when Brees was here, and then Rivers earned the incentive anyway, we get charged for that incentive on the next years cap.

    And something like that happened to us last year, which is why our cap number for '07 is now $2.6 million less than it should be.
     
  10. Trumpet_Man

    Trumpet_Man Well-Known Member

    Joined:
    Feb 14, 2006
    Messages:
    18,996
    Ratings:
    +654
    I did not have the mindset to go there because the beer just kicked in but you are somewhat right. This is where this **** gets tricky (not to mention the beer and trying to post) :lol:

    UNLIKELY to be earned incentives may not ALWAYS be included as a cap debit in the following year. There can be clauses such as the ones where Rivers had to make the Super Bowl to be paid or something along the lines of ridiculous. Those contractural caveats are exceptions. This is a really fine point and maybe splitting hairs but the arguements presented relay the essence of how the **** works....

    And good post dude to explain how it works so props man !!! :icon_toast:
     
  11. Thunderstruck

    Thunderstruck BoltTalker

    Joined:
    Aug 16, 2006
    Messages:
    1,981
    Ratings:
    +272
    The more I talk about this the more I feel my testosterone level falling, so I think I'm going to quit this thread before I end up signing up for classes to become a CPA.
     
  12. Shamrock

    Shamrock Well-Known Member

    Joined:
    Jun 18, 2006
    Messages:
    11,922
    Ratings:
    +1,243
    Teams don't "designate" whether an incentive is LTBE or NLTBE.

    An incentive is considered LTBE if the player achieved that status in the previous season. An incentive is considered NLTBE if the player did not achieve it in the previous season. Incentives in out years can change designations from LTBE to NLTBE based on what happened the previous year.

    Take the Pro Bowl example. Since Rivers was elected to the Pro Bowl in '06, if he has a clause that pays him an incentive for the Pro Bowl after the '07 season, that is now a LTBE incentive.

    The CBA spells out LTBE incentives for rookies.

    Page 67 on the CBA

    The incentive discussion and tables go on for 15+ pages .....
     
  13. boltssbbound

    boltssbbound Well-Known Member

    Joined:
    Jun 16, 2006
    Messages:
    7,073
    Ratings:
    +1,554
    Thank you for correcting him Shammy. I've been too lazy to do it. If teams were allowed to designate incentives, they would all be NLTBE, and they would use that loophole to push back cap hits.
     
  14. Thunderstruck

    Thunderstruck BoltTalker

    Joined:
    Aug 16, 2006
    Messages:
    1,981
    Ratings:
    +272
    :rolleyes:
     
  15. Thunderstruck

    Thunderstruck BoltTalker

    Joined:
    Aug 16, 2006
    Messages:
    1,981
    Ratings:
    +272
    You're right...I misunderstood the level of control teams have over that part of the process.
     
  16. BoltsFanUK

    BoltsFanUK Well-Known Member

    Joined:
    Sep 12, 2006
    Messages:
    7,111
    Ratings:
    +848
    It confuses me sometimes
     
  17. boltssbbound

    boltssbbound Well-Known Member

    Joined:
    Jun 16, 2006
    Messages:
    7,073
    Ratings:
    +1,554
    Hey, at least I didn't just talk out of my ***...

    That's even lazier.
     
  18. BoltsFanUK

    BoltsFanUK Well-Known Member

    Joined:
    Sep 12, 2006
    Messages:
    7,111
    Ratings:
    +848
    yep
     
  19. Thunderstruck

    Thunderstruck BoltTalker

    Joined:
    Aug 16, 2006
    Messages:
    1,981
    Ratings:
    +272
    Okie dokie.
     

Share This Page