Yearly Compensation Amounts

7:50am EDT

In an earlier blog entry about signing bonuses, I outlined items that would be prorated over the life of the contract. Below are some common compensation terms that, for salary cap purposes, are considered a period cost and are included immediately in a players current year cap cost.

Base Salary - This is the salary that is outlined in paragraph 5 of a player contract. It is the amount of money that a player will receive for being on the active/inactive/reserve roster on game day. Veterans with four accrued seasons and are on the active/inactive roster on the the 1st regular season game, are guaranteed their entire base salary.

Non-guaranteed Roster bonuses - Are payable to a player for being on the roster at a specific time of the year. Unless the bonus is guaranteed, it is included in the player's salary cap cost in the year that it is earned.

Non-guaranteed Reporting bonuses - Are bonuses payable to a player for reporting to training camp on time. Unless the bonus is guaranteed, it is included in the player's salary cap cost in the year that it is earned.

Non-guaranteed Workout Bonuses - Are bonuses that are payable for participation in the teams Off-season workout program, which is a 4 day per week, 14 week program. The minimum workout bonus for any player is $130 per day. Players that receive a workout bonus that is in excess of the league minimum have the amount included in their player's salary cap cost immediately. For players that don't have a workout bonus stipulated in their contract, the entire cost of the program is included in their player's salary cap cost when they start the program. The cost would be $6,720 for any player that begins the workout program at the start (March 17th).

Incentive bonuses - Are incentives that a player will receive based on meeting certain performance barriers. These types of bonuses can be based on any of a multitude of things including both individual statistics and team statistics. Some of the more popular are pro bowl selection, passing yards, receiving yards, rushing yards, playing time, tackles, interceptions, turnovers, team wins, team playoffs, team offensive efficiency, team defensive efficiency. These types of bonuses are classified into two types, Likely to be earned (LTBE) and Non-likely to be earned (NLTBE), and are reconciled at the end of the league year and included in the cap adjustment amount for each team. The Lions had a negative cap adjustment amount from last year and I discussed it in two earlier blogs, March 2nd and March 1st.

• Likely to be earned incentives - the criteria for whether a bonus is a LTBE or NLTBE is generally whether the barrier was met in the preceding season. i.e. if Jon Kitna has an incentive bonus that will pay him $500,000 for passing for 4000 yards in 2008, then since he passed for 4000 yards in 2007, it would be considered likely to be earned in 2008. LTBE incentives are included in a player's cost in the year that they would be earned.
• Non-likely to be earned incentive - If Jon Kitna has an incentive bonus in his contract that will pay him $500,000 for passing for 4500 yards in 2008, then since he passed for less than 4500 yards in 2007, that bonus would be considered a NLTBE incentive.
  At the end of the league year, the league offices and the management council reconcile all the LTBE bonuses with the NLTBE bonuses and submit either a credit or a charge in the next season.

Escalators - Are potential increases in a players compensation, based on meeting certain criteria. They can be based on any of a number of things, including the items that I listed above under incentive contracts. What happens when a player reaches these thresholds is that his base salary is increased in a following season. Just like with LTBE incentives and NLTBE incentives, they are reconciled at the end of the league year, however, they are not part of the Cap Adjustment amount. They would actually increase a players salary cap cost for a given season.

Signing Bonuses and Other Items Treated as SB's

5:45am EDT

The following terms are common items in a player's contract and include a brief description of the treatment of those items. It is not intended to be an exact interpretation of the treatment of these payments, but to provide a layman's definition as to what these items are and how they are treated for salary cap purposes. For a more detailed description of these items, please refer to the Collective Bargaining Agreement, Article XXIV, Section 7 - Valuation of Player Contracts for a more detailed description.

Signing Bonuses - Are bonuses paid to a player when he signs a contract. They are guaranteed, paid at the initial signing and are prorated over the life of the contract to a maximum of 6 years.

Other Items Treated as Signing Bonuses - These are bonuses that are paid to a player at a time after the initial signing, but for salary cap purposes are treated just like signing bonuses and are prorated over the remaining life of the contract to a maximum of 6 years.

• Guaranteed Roster Bonuses - Are bonuses for being on a roster at a specific time or being on the active and/or inactive roster on game day, but they are guaranteed to be paid even if the player isn't on the roster at the specified time in the future.
• Guaranteed Reporting Bonuses - Are bonuses paid for reporting to training camp, but they are guaranteed to be paid whether the player shows up to training camp or not.
• Guaranteed Workout Bonuses - Are bonuses paid for participation in the club's off-season workout program, but the club guarantees payment, even if the player doesn't participate in the program.
• Option Bonuses - Are bonuses that are paid at the option of the club, usually in the second and/or third year(s). They used to be prevalent in rookie contracts, as the use of an option bonus was one of the ways that a club could sign a rookie to a large contract that contained a large amount of guaranteed money. When Ashley Lelie failed to show up to training camp and therefore violated his contract, the court ruled that the Denver Broncos could only recover a portion of the original signing bonus and none of the option bonus paid to Lelie. Without the ability to recover damages when a player fails to honor the terms of the contract, teams are now hesitant to pay players large dollar amounts in the form of an option bonus. For salary cap purposes, option bonus payments are prorated over the life of the contract to a maximum of 6 years.
• Salary Advances - These are advances on future years' salaries. To the best of my knowledge, they used to not be a common item in a player's contract, but with the Ashley Lelie ruling (see Option bonuses above), Tom Lewand, the Lions Chief Operating Officer and Chief Contract Negotiator, used Salary advances in Calvin Johnson's contract. This allowed Johnson to get the large amount of guaranteed money due to being a #2 overall draft pick and gave the Lions recourse against Johnson if he doesn't honor his contract. I fully expect salary advances to become more prevalent in rookie contracts, now that teams are hesitant to use option bonuses. Salary advances on future salaries are prorated over the life of the contract to a maximum of 6 years.

Guaranteed Reporting and Guaranteed Workout bonuses are not common. The Collective Bargaining Agreement (CBA) addressed the treatment of these guaranteed payments to prevent clubs from manipulating the salary cap.

Dewayne White and Offseason Workout Program

5:05pm EDT

Dewayne White

As I've noted in the past couple of blog entries, the Lions are very tight against the cap. They freed up some cap space recently when they renegotiated Dewayne White's contract. When White originally signed on 03/05/07, he received a $10,000,000 signing bonus and his 2008 compensation was scheduled to include a base salary of $2,000,000 and a roster bonus of $1,000,000, payable on the 7th day of the league year. The original contract put his 2008 salary cap cost at $5,000,000

As a part of the restructure, his base salary was reduced from $2,000,000 to $605,000. What likely happened is that the Lion's paid him $1,395,000 bonus to restructure and reduced his base salary to the league minimum, based on his years of service. This is the same type of restructure they did when they restructured Jeff Backus' contract back at the end of September, 2007.

Under the above assumptions, the restructure would save the Lion's $1,046,250 of cap space. White's 2008 Salary cap cost would be reduced to $3,953,750.

• $605,000 (2008 base salary)
• $1,000,000 (Roster bonus paid on 7th day of league year)
• $2,000,000 (Signing bonus proration $10M/5year contract)
• $348,750 (Renegotiation proration $1,395,000/4years remaining)

Non-guaranteed Workout Bonuses - Are bonuses that are payable for participation in the teams offseason workout program, which is a 4 day per week, 14 week program. The minimum workout bonus for any player is $130 per day. Players that receive a workout bonus that is in excess of the league minimum have the amount included in their player's salary cap cost immediately. For players that don't have a workout bonus stipulated in their contract, the entire cost of the program is included in their player's salary cap cost when they start the program. The cost would be $6,720 for any player that begins the workout program at the start (March 17th).

The following players have workout bonuses written into their contracts and their bonuses have already been accounted for:

• 500,000 Edwin Mulitalo
• 250,000 Cory Redding
• 100,000 Roy Williams
• 100,000 Dominic Raiola
• 100,000 Mike Furrey
• 100,000 Chuck Darby
• 75,000 Dan Campbell
• 50,000 Jon Kitna
• 50,000 Jeff Backus
• 50,000 Ernie Sims
• 50,000 Paris Lenon
• 25,000 Shaun Cody
• 20,000 Casey Fitzsimmons

The Lions have 51 other players under contract. For any player that entered the workout program when it began on March 17th, they would be scheduled to receive $6,720 workout bonus for the year. If all players that were eligible to enter the program, did enter the program, the combined cost would be $342,720. Since only the Top 51 player contracts count against the cap, the salary cap cost would be around $200,000.

L. Moore, Stephen Peterman, S. Wilson and D. Orlovsky are Restricted Free Agents and are not allowed to participate in the program until they agree to their tender.

Based on the above, I'd estimate the Lion's current cap status at $1,000,000 under the cap.