{2023 Thread Bumped} Underhill Giving No Quarter to Nick Wright (2 Viewers)

[Rouxble]

So the question is how much does the Saints future debt constrain their present ability to spend, if at all? Are they at a functional disadvantage because they are effectively operating with a lower payroll this season than teams that don’t carry so much debt on their books or is the system truly so flexible that it let’s them defer and defer salary to the future with no negative impact on current ability to spend? Or is the truth somewhere in the middle?

All teams borrow from the future, you would be at a competitive disadvantage if you didn’t at least do it with signing bonuses because you would have trouble fitting first year contract cash on your books. Players generally don’t care about the cap as much as they worry about how much cash comes in the early years of a contract because they know they have short careers and a team can cut them before they collect the full contract.

The difference between the Saints and other teams, at least recently, is that we borrow in amounts that put our cap way over any reasonable projection of the following year’s cap. As a result, we have to issue new bonuses on old contracts to get under the cap because the old contracts have too much dead money for cuts to be helpful. And the restructures only add to the dead money. We will be in the same boat next year, we are projected at $300m+ in cap obligations before some of the final cuts and restructures get posted. No way the cap is going up $80m+ in one year.

All teams can use restructuring bonuses to clear space. Again, the difference with the Saints is that we are paying restructuring bonuses to get under the cap versus paying restructuring bonuses to make room for signing new players. Put more simply, most of our restructuring bonuses are wasted, and there is only so much restructuring capacity that each team has.

Because that capacity is limited, and the cap itself has a limit, yes we are more constrained. Other teams might not use up all their capacity, but they have it if they want/need it.

 

[Rouxble]

You bring up a good point. The league is no doubt well-aware that the salary cap manipulation is going on and most teams are using the strategy to some degree. Changing the rules would probably hurt the Saints the most, so that risk is there. But it seems to me if they really wanted to do that, they'd have done it already.

The salary cap rules have been the same for years, there is no reason to change them. The only expected change is that the NFLPA will seek higher cash minimum spending as a percentage of the cap. It went up from 89% over a four year period to 90% over a three year period in the most recent CBA.

 

[DaveXA]

The salary cap rules have been the same for years, there is no reason to change them. The only expected change is that the NFLPA will seek higher cash minimum spending as a percentage of the cap. It went up from 89% over a four year period to 90% over a three year period in the most recent CBA.

Sure, I don't think the risk is particularly high that it would happen. Certainly won't happen before the next CBA. But something like that, you'd need years of planning to adjust to that sort of change. Certainly the assumption Loomis has is that it won't change. No risk, no reward tho.

 

[Holy Avenger]

Nothing is more pathetic than creatures like this "Wright" clown acting stupid, condescending and ignorant for clicks. It's so greasy and pathetic and the sign of a person that is professionally lazy. He had a comment about how "20%" of the cap is dead. Maybe he thinks the cap is $25 million at the moment. More likely, he's just stupid.

He's below the endless parade of Twitter handles that end in a stream of random numbers that also don't know anything about the cap. It takes twenty seconds to educate oneself and 15 seconds of that is reading "the cap goes up every year unless there's a pandemic." These things genuinely want to be stupid. They love being stupid and crave it and hate that they need it, but can't live without being so effortlessly dumb.

 

[Dan in Lafayette]

Loomis was thrown the COVID curve ball in 2021. He and Harley mastered estimating the future years' salary cap increases and kicked the can accordingly. When the NFL held the cap flat to make up for 2020 losses, the Saints had to scramble. I'm not going to fault Loomis and Harley for their inability to work a pandemic into their equations.

 

[JackDiesel]

Sure, but those are the chances you take. It usually works. But with Covid and the outsized IR list we've had over the last couple of years, it was the worst it could get for the strategy Loomis uses. Yet, we're getting closer to the other side of it and will be back to business as usual probably in the next year or two. Just feel like some just aren't willing to wait and let Loomis do his thing.

And all teams make decisions about how much depth they want. NBA teams do this every season. They have to make decisions on how deep into the bench they go with their rotations, not only in the regular season, but also in the playoffs when the rotation usually shortened quite a bit.

NFL teams will decide how much money goes to their core players and how much to the rest.

2020 got real ugly for us and we had a $25-$35 million shortfall in the cap compared to expectations. We also restructured a lot of contracts when we thought we were trading for Deshaun Watson.

I bet we have another 2-3 years of the ultra creative contract management with about 5 more years of dead money in some contracts. Bad sign for Peat next year that we didn't restructure him. Jordan's got 3 years of substantial dead money after his contract expires. Savings to be had with Kamara in '24 but in '25 he'll probably be a cut candidate.

We've been main lining heroin and we're not going to kill ourselves going cold turkey. Got to slowly wean ourselves off of it.

 

[new city champ]

This discussion is useful. So if we come into the new NFL year way over the cap, we have to restructure current contracts to get under mainly by converting salary into bonuses which can then be spread out over the full span of the contract and can even add dummy years on to the deal to spread it even further.

But if you need to do that to get under cap, and do even more of it to sign free agents, you are loading more and more current obligations into future cap space meaning the problem grows over time. Even if the cap goes up, if you aggressively shift current obligations into future years it is unlikely to go up enough to offset the combined weight of current commitments and those deferred from past years. So you have to repeat the process all over again and on into the future.

This smells of Enron accounting. Spend now, but don’t recognize It on the books for accounting purposes until future fiscal years, perhaps long after the assets you bought are themselves gone. These schemes tend to implode at some point…

 

[SigFreudianSlip]

The only problem with that analysis is that we’ve been more all in post Brees than we ever were with Brees, and we all know most of our wins came with Brees. Prior to 2020, the Saints never spent more than 60% of their cash on bonuses. We’ve done it four years in a row.

In reality, Loomis would always manage the cap back to normal the year after a big signing so he would have the flexibility to manage the roster without the limitations of excessive dead money. We’re trapped to where we can’t do that now.

So we laugh when another team signs our 30yo DT, when we just gave new signing bonuses to our 34yo DE, 34yo LB, 33yo TE, and 31yo S which ties our cap to those players even longer.

Bingo.

 

[St. Geezy]

This discussion is useful. So if we come into the new NFL year way over the cap, we have to restructure current contracts to get under mainly by converting salary into bonuses which can then be spread out over the full span of the contract and can even add dummy years on to the deal to spread it even further.

But if you need to do that to get under cap, and do even more of it to sign free agents, you are loading more and more current obligations into future cap space meaning the problem grows over time. Even if the cap goes up, if you aggressively shift current obligations into future years it is unlikely to go up enough to offset the combined weight of current commitments and those deferred from past years. So you have to repeat the process all over again and on into the future.

This smells of Enron accounting. Spend now, but don’t recognize It on the books for accounting purposes until future fiscal years, perhaps long after the assets you bought are themselves gone. These schemes tend to implode at some point…

This has been a mode of operation for over a decade now. The doomsday scenario has yet to play out.

Perhaps if we didn’t have the bad luck we did in the 2017-2020 playoffs and came away with at least one more title, people would have a greater appreciation for the team’s mastery of their cap manipulation game.

I do think a doomsday scenario could come if some extreme anomaly event occurs that makes COVID look like a 3 minute allergy attack and we see a multi-year cap pause of some sort, but even with the 2020 precedent out there, I don’t think the team should be factoring in that sort of scenario into what they’re doing.

As long as the cap continues to skyrocket, we will be fine.

 

[ItFan]

This is demonstrably untrue.

Our owner's liquidity and willingness to spend next year's money allows us to compete and puts us at a huge advantage because we can spend more money than other teams.

It's that simple. No time in the past 7 or 8 years have we not been able to get whoever we want at whatever price. hell, we almost got Watson last year and just did bring in Carr.

We won 3 NFC west titles in a row doing this and barring a few injuries and bone headed plays last year and 21 we would have done it again. Furthermore, all those 13 win seasons were a direct result.

Tell the Falcons how much of an advantage they've enjoyed and get back to me.

How do you know we were able to sign anybody we wanted to? I recall Suh, surely I forget of plenty of others, and most of all we don’t know if some deals failed for financial or technical reasons.

Anyway, if we can offer an X amount, a team with cap space can offer 2X. It’s really that simple. Because there’s a ceiling to what our management is willing to spend if they know they’re already over the cap for the coming years. On the other hand, a team with cap space can go all in on whatever player and virtually win every bidding war, at least before digging themselves into cap hell as well.

 

[SoggyBottomBoy]

This discussion is useful. So if we come into the new NFL year way over the cap, we have to restructure current contracts to get under mainly by converting salary into bonuses which can then be spread out over the full span of the contract and can even add dummy years on to the deal to spread it even further.

But if you need to do that to get under cap, and do even more of it to sign free agents, you are loading more and more current obligations into future cap space meaning the problem grows over time. Even if the cap goes up, if you aggressively shift current obligations into future years it is unlikely to go up enough to offset the combined weight of current commitments and those deferred from past years. So you have to repeat the process all over again and on into the future.

This smells of Enron accounting. Spend now, but don’t recognize It on the books for accounting purposes until future fiscal years, perhaps long after the assets you bought are themselves gone. These schemes tend to implode at some point…

Valid points. I think it’s less like Enron and more like buying a very expensive home (out if your income range) and paying interest only (no principal) but build no equity in the home. Or leasing a car every 3 years instead of purchasing.

Yes, there are risks and setbacks like we’re seeing with the unforeseen consequences of 2020. We can’t even purposely purge cap in one rough year as a result. Loomis said they are working to get back to the middle. We’ll see.

We may be very low key in free agency this year (Carr being our only big signing) and if so, we’ll finally net some draft picks for our player losses.

But, to your point, it’s probably going to create some weak spots in the lineup. DT is already a candidate.

 

[ItFan]

Except that's not how the salary cap works in practice.

It is, in practice, unless the team wants to dig their hole deeper. Cap hits and dead money are real any given year, so you have to balance actual availability and dead cap. This means that a team with cap space is more competitive on the FA market and theoretically can always outbid us if they want

 

[Belfast Saint]

It's a great strategy to maximise a team with as much money as you can. However, there is increased risk and less flexibility. Simple scenario is that bad personnel decisions/ drafting means that we need to shift away from a number of players. Making more significant changes to the roster would be made more difficult operating with just enough cap flexibility to get by and, generally, limited draft capital based on our approach to drafting. It's an aggressive strategy and I like it, but a stretch of bad personnel decisions will be hard(er) to recover from because of it.

 

[Clintonrebel]

Actually, maybe they can. Every year or two the cap goes up. So by pushing dead money back you are paying salary later for cheaper. It’s like using your mortgage to pay off credit card money. Not only do you get a much lower interest rate but you spread the money over many years.

Businesses do this all the time. Even very profitable corporations will take a loan (or sell bonds) to spread expense over years so they have more cash today.

The problem with Wright’s take is (1) the Saints definitely signed Carr knowing these cuts were coming and so all this needs to be thought of as one move, not a desperate decision by a team wanting to win now, and (2) they actually got Carr at a good price. QBs cost $30 M a year these days, end of story. So if the Saints wanted a starter, this had to be done. It wasn’t a reckless move, it was a team that didn’t want to waste a year tanking only to miss out on the QB they wanted because someone traded up. The DLs they released can be replaced with FAs. Those three simply aren’t that good.

Let’s don’t push the “using a mortgage to pay off a credit card” analogy. You are risking your house to fund your impulse spending. Actually, maybe that is a good analogy for what the Saints have been doing.

 

[St. Geezy]

It's a great strategy to maximise a team with as much money as you can. However, there is increased risk and less flexibility. Simple scenario is that bad personnel decisions/ drafting means that we need to shift away from a number of players. Making more significant changes to the roster would be made more difficult operating with just enough cap flexibility to get by and, generally, limited draft capital based on our approach to drafting. It's an aggressive strategy and I like it, but a stretch of bad personnel decisions will be hard(er) to recover from because of it.

I am definitely a proponent of the way the Saints maximize their cap, but you’re right…the biggest downside is that your margin for error is very low. You are essentially locked into deals with the players you sign.

I think this is why we generally shop the bargain bin in free agency. You don’t want to lock yourself into the wrong guy. The only ones we seem to lock ourselves into big money deals with are players we have already seen play at a high level FOR US, rather than with someone else.

We did choose to swing for the fences with Carr, but I do believe he is a special case since we had a desperate need at the game’s most important position, and we can get out of the deal with minimal damage after a couple of years if he busts.