How the 16 NBA Playoff Rosters are Built Financially

Michael GinnittiApril 13, 2017

2017 MLB Opening Day Payrolls

Michael GinnittiApril 02, 2017

2017 NFL Free Agency

Michael GinnittiMarch 09, 2017

NFL Players on the 2018 Roster Bubble

Michael GinnittiFebruary 19, 2017

Offseason Financial Previews for all 32 NFL Teams

Michael GinnittiFebruary 13, 2017

First Look: Potential 2017 Roster Bubble Players

Michael GinnittiJanuary 06, 2017

What to do with Tony Romo?

Michael GinnittiDecember 19, 2016

The Cowboys have found themselves in a unique situation with the immediate rise of Dak Prescott to stardom. While it's always a good problem to have "too many good quarterbacks", it does require some legwork in terms of their salary cap management going forward.

It has become glaringly clear that Tony Romo's days in Dallas are numbered, as the 36 year old holds $54M over the next three seasons, including cap hits of $24.7M, $25.2M, and $23.7M - certainly much to rich to hold on to as a backup.

So the Cowboys appear poised to move on from Romo this offseason, either by way of trade or outright release. It should be noted that even in the event of a trade, Romo will likely demand a new contract in order to provide him stability in terms of guaranteed money, which the remainder of his current deal does not afford. 

The question then becomes, what will it cost Dallas to make these moves, and which of the options is the better move for both sides. We'll dive into the numbers.

Romo's Dead Cap
Tony Romo's contract holds $19.6M in dead cap for the 2017 season, stemming from the remainder of his pro-rated signing bonus, and back to back salary restructures in 2014/2015. In other words, Dallas will be forced to take on this $19.6M regardless of whether they trade or release him.

Trading Romo
Should the Cowboys trade Tony Romo prior to June 1st, they would be responsible for all $19.6M of the dead cap in 2017. It would behoove them to wait until after 6/1 to process this transaction to allow the dead cap to spread out into $10.7M in 2017, and $8.9M in 2018. However, waiting until June to trade Romo hurts his value, as teams will be addressing their QB needs both in March free agency, and in the 2017 draft prior. This is likely the reason you're hearing Romo and his camp requesting an outright release.  

Post June 1st Designated Release
By designating Romo a Post-June 1st release, Dallas can spread out the allocation of that dead cap into $10.7M in 2017, and $8.9M in 2018. However Dallas will not have to wait until June 1st to physically release Romo into free agency. They can designate him as a Post June 1st release, which immediately makes him able to sign elsewhere. The catch? The Cowboys will have to keep Romos' full $24.7M cap figure on their books until June 1st, after which the release processes, and his cap turns into $10.7M in 2017, $8.9M in 2018 as described above. 

So the question for the Cowboys as they consider these options is how to value the return? Certainly trading Romo (or at least the rights to him, as the contract will likely be ripped up), can bring back a package of players or draft picks that can improve the roster. But unless they decide the $19.6M in total dead cap is acceptable on their 2017 salary cap table, waiting until June to make the trade won't sit well with Romo, who deserves to be processed fairly in this matter. 

If savings $8.9M from their 2017 salary cap is worth more to Dallas than a decent return on a trade, then designating Romo a Post June 1st release appears to be the friendliest option for both sides. 

One final wrinkle? The Cowboys currently have $175M allocated to their 2017 salary cap table (44 signed players). A figure that already exceeds the projected team cap for next year.  

Breaking Down the Numbers for Tyrod Taylor's Option

Michael GinnittiDecember 07, 2016

Bills QB Tyrod Taylor carried over a productive 2015 season through a solid first half to 2016. But a decimated wide receiver arsenal and some inconsistent play from Taylor has many in Buffalo pondering the upcoming option deadline on his unique contract.

After reeling in a modest $1.15M in 2015, the Bills handed Taylor a $7.5M raise in 2016 ($9.5M total), that comes with the opportunity for an additional 5 years, $82.5M should Buffalo exercise his club option this offseason (due March 11, 2017).  

 

Statistical Rankings

It doesn't take much to show that Taylor's production has dropped off in 2016, especially when comparing to his strong 2015 efforts. (Rankings based on QBs who played at least 75% of the team's games).

Stats2015 Rank2016 Rank
Rating 6 25
Comp. % 15 26
Pass Att/G 25 28
Pass YD/G 30 30
Pass TD/G 19 28
Fewest INT/G 4 8
Rush YD/G 1 2

 


Assessing the Total Value

It's important to remember that the total value of veteran NFL contracts is mostly just for show these days, as the majority are cut well short due to releases or extensions. However for vanity purposes, Taylor's $90M new money contract ($7.5M raise in 2016 + $82.5M extension) ranks 9th highest among active QBs. His $18M average annual salary ranks 17th, tying him with Cowboys' backup QB Tony Romo, and Texans' free agent signing Brock Osweiler. 


Assessing the Guarantees

Should the Bills exercise the option, Taylor receives a $15.5M bonus (that pro-rates at $3.1M per year through 2021. In addition Taylor's $12M salary for 2017, and $3.25M of his 2018 salary become fully guaranteed automatically. This $30.75M guaranteed at signing represents 37% of the total contract, which ranks 18th among active veteran QB multi-year contracts.

If he's on the roster come the 3rd league day of 2018 (early March), the remaining $9.75M of his 2018 salary fully guarantees, which brings his "practical guarantees" to $40.5M, or 49% of the total contract, which ranks 21st among active veteran QB multi-year contracts. 


Assessing the Cap Hits

The structure of the contract makes for affordable cap values throughout the deal. Once exercised, the extension carries cap hits of $15.9M, $16.78M, $17.38M, $17.63M, and $17.65M from 2017 to 2021, all derived from sizeable base salaries, and pro-ration from his $3.4M signing bonus paid in 2016, and the $15.5M option bonus due next March. Taylor's $15.9M cap figure for 2017 currently ranks 20th among active QBs. 


Assessing the Dead Cap

One of the more important factors to note with this contract is the structure of the dead cap, especially with the uncertainty of Taylor's long-term capabilites as a franchise QB. The good news? All of Taylor's salary guarantees lie within the first two years of the deal (2017 & 2018). The less than gooder news? His $15.5M option bonus next March makes for a decent chunk of dead cap toward the backside of this contract. 

Assuming the option is exercised, Taylor will carry the following dead cap hits:

YearDead Cap Hit
2017 $33,603,334 
2018 $17,690,000 (addt'l $9.75M kicks in on the 3rd league day)
2019 $10,660,000
2020 $6,880,000 
2021 $3,100,000
 


In Conclusion

When factoring in cash flow, guarantees, and dead cap structure, the Bills are contemplating whether to exercise what is essentially a 2 year, $40.5M contract, fully guaranteed. Should they need to get out after 2018, Buffalo would be slapped with a $10.66M dead cap hit, which if designated as a Post-June 1st release would split into $3.78M in 2019, & $6.88M in 2020.

YearCashCap
2017 $27,500,000 $15,913,334
2018 $13,000,000  $16,780,000 
2019 N/A $10,660,000
Total $40,500,000 $43,353,334


Assuming a $168,000,000 team salary cap in 2017, the Bills currently have an estimated $32M in cap space, with 36 players under contract, making cap space a bit of a concern, especially with a decimated secondary to rebuild. Should the Bills feel like Taylor's recent production doesn't warrant this type of Top 15 QB money, they can decline the option with hopes of re-signing him at a lower price, but will likely need to contend with the New York Jets, San Francisco 49ers, Chicago Bears, etc who will be heavily in the market for a QB1 next offseason.

 


Related Links

tyrod taylor

Yoenis Cespedes Remains with the Mets

Michael GinnittiNovember 29, 2016

The New York Mets made the first big splash of the offseason by bringing back OF Yoenis Cespedes on a whopping 4 year, $110M contract. The deal keeps the 31 year old star in Queens through the 2020 season, with an annual average salary of $27.5M, 2nd only to Miguel Cabrera ($31M) among active position players. 

Salary-wise the deal breaks down at $22.5M in 2017, $29M in 2018, $29M in 2019, and $29.5M in 2020. Since joining the Mets in August of 2015 Cespedes has reeled in $31.2M. Upon completion of his new deal, he'll have earned $173.5M in 9 MLB seasons with the A's, Red Sox, Tigers, and Mets. 

It's the largest free agent contract ever signed by the Mets, and in terms of the AAV, the largest multi-year free agent contract ever signed by an outfielder. 

Our projection formula set Cespedes' market value just shy of $25M this offseason, with age and games missed due to injury a factor in the reduced rate. The Mets were clearly able to reach a bit to get their man back.

In terms of payroll, the Mets currently have $110M allocated to 8 currently signed players. New York has 8 players set to hit arbitration, notably Matt Harvey, Jeurys Familia, and Addison Reed, while 10 others remain under pre-arbitration control. Big picture, bringing back a bat like Cespedes' (or something comparable) was the Mets one goal this offseason, and they clearly weren't waiting for the market to heat up to get the job done. 

Cespedes' huge annual salary now resets the market for a crop of young players nearing their first big pay day, including Bryce Harper, Nolan Arrenado, & Manny Machado.

Related:

Calculated Contract Projections for MLB's Young Stars

Michael GinnittiNovember 10, 2016

Bryce Harper (OF, Washington Nationals)

8 years, $192,173,535 ($24,021,692 AAV) 

Harper cut his 2015 numbers in half throughout a struggle-filled 2016 campaign, but is still on track for a major pay day in the near future. He's eligible for arbitration in both 2017 & 2018 before hitting free agency for the first time in 2019, but having come off a down year, Washington may be looking to cash in on Harper this offseason with a much lower offer than many had previously thought necessary. His $24M per year market value ties with Mike Trout's annual salary, and places him behind only Miguel Cabrera ($31M) and Giancarlo Stanton ($25M). 

 

Kris Bryant (3B, Chicago Cubs)

8 years, $191,818,837 ($23,977,355 AAV)

Bryant will likely be named the NL MVP in the coming days, and was the difference maker in the Cubs series win over the Indians last month. The 24-year-old now carries a career .284 average and .900 OPS in two full seasons, and isn't eligible for free agency until 2022. His calculated market value comes in just below Harper's $24M mark, and would rank 5th among all active batters currently. Should his production continue at its current pace, Bryant's value will be nearing $30M in no time. 

 

Brian Dozier (2B, Minnesota Twins)

6 years, $119,497,816 ($19,916,303 AAV) 

Dozier is signed through 2018 with the Twins at $6M & $9M respectively. While $15M over two years is a perfectly fine living, the bottom line here is that Dozier has been exceptional over the past three seasons. Since 2014 the 29-year-old is averaging 38 doubles, 33 home runs, 86 RBIs, and an .800 OPS per season. His nearly $20M calculated market value would rank him 2nd only to Robinson Cano ($24M) among active 2nd basemen. 

 

Jonathan Lucroy (C, Texas Rangers)

5 years, $78,924,180 ($15,784,836 AAV)

Lucroy joined the Rangers after 6+ seasons with the Brewers and carries a $5.25M salary in 2017. The 30-year old is set to hit the free agent market following the upcoming season, and has put together recent production that carries a $15.7M calculated market value, a figure that ranks 4th among active catchers. 

 

Nolan Arenado (3B, Colorado Rockies)

8 years, $147,298,608 ($18,412,326 AAV)

Arenado's arguably been the most complete player in all of baseball over the past two seasons, tallying 83 HR, 263 RBIs, a .291 average, and a .915 OPS in that time frame. He's also won 4 consecutive Gold Glove awards. Contractually the 25 year old is arbitration eligible through 2019, but with Arenado's production only increasing seemingly, his market value will continue to rise rapidly. His current $18.4M valuation ranks 2nd to Pablo Sandoval ($19M) among active 3rd basemen contracts. 

 

Manny Machado (3B, Baltimore Orioles)

8 years, $140,442,600 ($17,555,325 AAV)

Like Arenado, Manny Machado has posted back to back elite seasons at the hot corner with Machado posting a just a bit less power numbers to his resume. The 24-year old is arbitration eligible through 2018, making him set to hit the free agent market one year earlier than Arenado. Machado's calculated value currently stands about $1M below Arenado's $18.4M (above).

 

Wil Myers (1B, San Diego Padres)

6 years, $75,137,508 ($12,522,918 AAV)

Myers appears to have found a comfortable landing spot in San Diego, and the Padres appear poised to reward him with a long-term deal in light of it. The 25 year old is set to hit arbitration for the first time this offseason, but in terms of a veteran extension, is calculating toward a $12.5M per year deal. 

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