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How do extensions work? - CincyWestside - 02-01-2023
So as the whole Bengals fandom knows by this point, Burrow and Higgins need to be extended this offseason.
I was wondering how extensions work exactly. Don't they kick in after their current contracts?
If that is the case, then couldn't we "extend" our 2020 draft class picks but still live with their rookie contracts for another year? That could free up some space this offseason to bring back Bates or Pratt on a front-loaded contract for a year or two.
RE: How do extensions work? - Housh - 02-01-2023
(02-01-2023, 01:19 PM)CincyWestside Wrote: So as the whole Bengals fandom knows by this point, Burrow and Higgins need to be extended this offseason.
I was wondering how extensions work exactly. Don't they kick in after their current contracts?
If that is the case, then couldn't we "extend" our 2020 draft class picks but still live with their rookie contracts for another year? That could free up some space this offseason to bring back Bates or Pratt on a front-loaded contract for a year or two.
To your second paragraph that is what the Dolphins did. They signed Tyreke Hill to an extension after they traded for him which gave them one year of Hill at his current contract. Then next year his Dolphins money starts coming in.
The idea i think is to get Burrow to help out in some way. Either he lets us backload his deal to where in years 4 and 5 he’s making something insane like 65 million per OR he does the unthinkable(in my opinion) and just doesn’t take what he’s worth.
Honestly I’m in the boat of thanking Burrow for getting his ass beat behind our line by just giving him 30% of the cap. His contract wouldn’t have a set number, whatever the cap is you get 30% of it. Period.
He’s only gonna get better
RE: How do extensions work? - Hammerstripes - 02-01-2023
(02-01-2023, 01:19 PM)CincyWestside Wrote: So as the whole Bengals fandom knows by this point, Burrow and Higgins need to be extended this offseason.
I was wondering how extensions work exactly. Don't they kick in after their current contracts?
If that is the case, then couldn't we "extend" our 2020 draft class picks but still live with their rookie contracts for another year? That could free up some space this offseason to bring back Bates or Pratt on a front-loaded contract for a year or two.
It depends as you can either extend or replace. But either way you have to do it the right way.
As for Bates and Pratt. I wouldn't do anything with either of them, instead I would use that $45 million in cap space to front load Tee Hggins contract so he won't count as much against he cap in future years and maybe do the same with Logan Wilson.
I think the ship has sailed with Bates. He had several chances to do a deal and just won't. Pratt plays a low impact position, and just isn't going to be worth the $15 million per he can probably get somewhere else.
RE: How do extensions work? - Luvnit2 - 02-01-2023
Here is something I posted in another thread. The example I used for extending Tee is an estimate of a minimum of what is needed to extend Tee.
I would cut Boyd, I love him, but he is our 3rd best WR and is proven he is not a #1 or #2 if Chase or Higgins is hurt. Cutting Boyd adds 8.9 million in cap space (1.4 million dead cap).
Take the money and place towards locking up Higgins for next 5 years. Higgins is only a 4 million cap hit for 2023 and then a free agent. Extend Higgins, 5 years for 95 million with 60 million guaranteed. Give him a 50 million dollar bonus (spread out over 5 years or 10 million a year.
Salary - 2023 = 1 million + 10 million bonus = 11 million cap hit
Salary - 2024 = 4 million + 10 million bonus = 14 million cap hit (Higgins has now been paid 35 of the 48 million guaranteed)
Salary - 2025 = 10 million + 10 million bonus = 16 million cap hit (Higgins has now been paid 65 million and reached the 60 million guarantee)
Salary - 2026 - 13 million + 10 million bonus = 23 million cap hit (if cut or traded, 20 million dead cap, but no salary guaranteed)
Salary - 2027 = 17 million + 10 million bonus = 27 million cap hit (if cut or traded, 10 million dead cap, but no salary guaranteed)
In 2023, he would add an addition 7 million of cap space (he is already scheduled for 4 million cap hit) so 11 -4 = 7 million additional
Cutting Boyd would pay for Higgins in 2023 and add 1.9 million in 2023 cap space.
In 2024, cut Mixon - A 2024 cut would add 10.3 million helping to pay for Higgins 14 million cap hit
The Bengals need to find a Boyd and Mixon replacement in 2023 and 2024. Hopefully, player development (Williams) or the draft
The misconception is some fans don't understand how a lot of these long term contracts are written. They key is the upfront bonus teams can pay and then defer the bonus money over the life of the contract. This is why we see cap hits a lot less in the early years and higher in the latter years. The player cares about the guarantee as they means the team cares about the cash outlay and the cap hit (both have minimums to be met to stay in compliance). So it is not an easy to calculate a 5 year 100 million contract extension for 5 years by doing simple math of 100 million divided by 5 years = 20 million dollar cap hit each year.
A great resource is Spotrac. I like it as it has many years of date, shows team by team spend and cap hit (2 different things) and even projects the following year by division with an in depth analytics. For example, the Ravens have 28.8 million in cap space, but they do not have Jackson under contract. The problem the Ravens have is they can't simply extend him to lower their cap hit, they franchise him and they literally have to restructure contracts or cut someone as tag for QB's is 32.4 million in 2023 I believe.
Sorry, for the long post, I love discussing the cap.
RE: How do extensions work? - PhilHos - 02-01-2023
(02-01-2023, 01:27 PM)Housh Wrote: Honestly I’m in the boat of thanking Burrow for getting his ass beat behind our line by just giving him 30% of the cap. His contract wouldn’t have a set number, whatever the cap is you get 30% of it.
Would that be better for Joe? Like if he signed a traditional, elite-QB-level contract would it be a higher percentage of the cap? Or what?
RE: How do extensions work? - Housh - 02-01-2023
(02-01-2023, 02:17 PM)PhilHos Wrote: Would that be better for Joe? Like if he signed a traditional, elite-QB-level contract would it be a higher percentage of the cap? Or what?
Well the cap ain’t gonna go down and if the cap is 224$ that(30%) would get him 67 mil per. Since that is insane I’ll go down to 25% which is 56 million per. Mahommes cap hit is like 46M so Burrow getting 56 per would make him highest paid QB and would account for the new cap. It would also account for future cap raises.
Now that’s just me cause i love Joe Burrow a little more than a normal fan should. I don’t think Miley would ink that deal but i would. You not gonna sacrifice your knee and get your ass beat 3 straight years and i don’t compensate you
RE: How do extensions work? - Bengalbug - 02-01-2023
I’m in this camp, and not sure if it’s possible.
Give him the average of the top 5 qb salaries each year and guarantee it for 5-6 years. This allows him to continue to ride the wave of increasing contracts, but allows the bengals a slight discount in knowing he is taking a discount.
RE: How do extensions work? - casear2727 - 02-01-2023
(02-01-2023, 01:27 PM)Housh Wrote: To your second paragraph that is what the Dolphins did. They signed Tyreke Hill to an extension after they traded for him which gave them one year of Hill at his current contract. Then next year his Dolphins money starts coming in.
The idea i think is to get Burrow to help out in some way. Either he lets us backload his deal to where in years 4 and 5 he’s making something insane like 65 million per OR he does the unthinkable(in my opinion) and just doesn’t take what he’s worth.
Honestly I’m in the boat of thanking Burrow for getting his ass beat behind our line by just giving him 30% of the cap. His contract wouldn’t have a set number, whatever the cap is you get 30% of it. Period.
He’s only gonna get better
(02-01-2023, 02:17 PM)PhilHos Wrote: Would that be better for Joe? Like if he signed a traditional, elite-QB-level contract would it be a higher percentage of the cap? Or what?
(02-01-2023, 02:30 PM)Housh Wrote: Well the cap ain’t gonna go down and if the cap is 224$ that(30%) would get him 67 mil per. Since that is insane I’ll go down to 25% which is 56 million per. Mahommes cap hit is like 46M so Burrow getting 56 per would make him highest paid QB and would account for the new cap. It would also account for future cap raises.
Now that’s just me cause i love Joe Burrow a little more than a normal fan should. I don’t think Miley would ink that deal but i would. You not gonna sacrifice your knee and get your ass beat 3 straight years and i don’t compensate you
(02-01-2023, 02:30 PM)Bengalbug Wrote: I’m in this camp, and not sure if it’s possible.
Give him the average of the top 5 qb salaries each year and guarantee it for 5-6 years. This allows him to continue to ride the wave of increasing contracts, but allows the bengals a slight discount in knowing he is taking a discount.
Percentage of the cap would be very difficult. Mike Florio started this reasoning but the one major flaw is that guaranteeing a percentage of the cap each year of the contract could require 100% up front into escrow and since no one knows the cap number years in advance it would be difficult, not to mention way too expensive for the Bengals.
Also this does NOT help the team in any way.
One of the reasons we extend Burrow as soon as possible is to sign him before even higher deals are done, as they rise every year.
If we sign Burrow to deal that is 20% of the cap the 1st year, that percentage decreases each following year as the cap always increases allowing for more dollars to other players.
RE: How do extensions work? - ochocincos - 02-01-2023
(02-01-2023, 02:30 PM)Bengalbug Wrote: I’m in this camp, and not sure if it’s possible.
Give him the average of the top 5 qb salaries each year and guarantee it for 5-6 years. This allows him to continue to ride the wave of increasing contracts, but allows the bengals a slight discount in knowing he is taking a discount.
Joe Burrow could probably get money to be the highest-paid QB in the league based on AAV.
The Bengals don't have the pure cash to give him a lot of guaranteed money, so they'll have to (try to) offset that by front-loading or balancing his cap hit so he isn't in a potential situation toward the end of his contract where he could get let go and miss out on the rest of his contract.
To the OP, the nice thing about extensions is you can be flexible with how everything impacts the current contract.
You can give some of the money into the remaining year(s) of the current contract so that it lessens the overall cap hit down the road. However, that increases the cap hit in the short-term.
RE: How do extensions work? - casear2727 - 02-01-2023
(02-01-2023, 01:19 PM)CincyWestside Wrote: So as the whole Bengals fandom knows by this point, Burrow and Higgins need to be extended this offseason.
I was wondering how extensions work exactly. Don't they kick in after their current contracts?
If that is the case, then couldn't we "extend" our 2020 draft class picks but still live with their rookie contracts for another year? That could free up some space this offseason to bring back Bates or Pratt on a front-loaded contract for a year or two.
To actually answer your question, yes extensions begin after the current contract, but bonus proration can begin immediately.
Extensions for players on rookie deals can be done after the 3rd season.
Burrow's contract could look like this:
500M over 10 years with $50M signing bonus in 2023 prorated over 5 years, $60M roster bonus in 2028, $100M roster bonus in 2032
2023 Rookie Base $1M, Rookie Bonus YR 4 $5.9M, Extension Bonus (50M) YR 1 $10M = CAP HIT $17.9M
2024 5th YR Option $30M, Extension Bonus YR2 $10M = CAP HIT $40M
2025 Extension Base Y1 $12M, Extension Bonus YR3 $10M = CAP HIT $22M
2026 Extension Base Y2 $17M, Extension Bonus YR4 $10M = CAP HIT $27M
2027 Extension Base Y3 $22M, Extension Bonus YR5 $10M = CAP HIT $32M
$60M Roster Bonus converted to Signing Bonus in 2028 and prorated over 3 years.
2028 Extension Base Y4 $24M, Extension Bonus YR1 $20M = CAP HIT $44M
2029 Extension Base Y5 $25M, Extension Bonus YR2 $20M = CAP HIT $45M
2030 Extension Base Y6 $30M, Extension Bonus YR5 $20M = CAP HIT $50M
$100M Roster Bonus converted to Signing Bonus in 2031 and prorated over 4 years.
2031 Extension Base Y4 $35M, Extension Bonus YR1 $25M = CAP HIT $60M
2032 Extension Base Y5 $40M, Extension Bonus YR2 $25M = CAP HIT $65M
2033 Extension Base Y6 $40M, Extension Bonus YR5 $25M = CAP HIT $65M
2034 Extension Base Y6 $45M, Extension Bonus YR5 $25M = CAP HIT $70M
2024 would be the only tough year and I'm not sure of the rules of converting 5th year option salary to a bonus for proration purposes.
RE: How do extensions work? - Sled21 - 02-01-2023
I realize they extending Tee means we don't have to get into a bidding war, but they don't absolutely have to extend him yet since they are extending Joe. The could let Tee play on another year of his rookie deal.
RE: How do extensions work? - casear2727 - 02-01-2023
(02-01-2023, 03:23 PM)ochocincos Wrote: Joe Burrow could probably get money to be the highest-paid QB in the league based on AAV.
The Bengals don't have the pure cash to give him a lot of guaranteed money, so they'll have to (try to) offset that by front-loading or balancing his cap hit so he isn't in a potential situation toward the end of his contract where he could get let go and miss out on the rest of his contract.
To the OP, the nice thing about extensions is you can be flexible with how everything impacts the current contract.
You can give some of the money into the remaining year(s) of the current contract so that it lessens the overall cap hit down the road. However, that increases the cap hit in the short-term.
A better way for the team would be setting roster bonuses in the future that are not required to be escrowed, when the time comes for the roster bonus it can be converted to a signing bonus, making it guaranteed and prorated. This is the Mahomes structure.
RE: How do extensions work? - casear2727 - 02-01-2023
(02-01-2023, 03:45 PM)Sled21 Wrote: I realize they extending Tee means we don't have to get into a bidding war, but they don't absolutely have to extend him yet since they are extending Joe. The could let Tee play on another year of his rookie deal.
The issue with waiting is that it will undoubtedly be way more expensive as other teams could make offers driving up the price. Teams cannot approach Tee while under contract now. He will play on his 4th year rookie deal regardless.
RE: How do extensions work? - WeezyBengal - 02-01-2023
(02-01-2023, 03:45 PM)Sled21 Wrote: I realize they extending Tee means we don't have to get into a bidding war, but they don't absolutely have to extend him yet since they are extending Joe. The could let Tee play on another year of his rookie deal.
They have control of Tee for at least 3 more years. Next year under contract and then two years on the franchise tag if they choose to do that.
Tee isn't going anywhere any time soon if the Bengals don't want him to.
RE: How do extensions work? - Nately120 - 02-01-2023
(02-01-2023, 03:45 PM)Sled21 Wrote: I realize they extending Tee means we don't have to get into a bidding war, but they don't absolutely have to extend him yet since they are extending Joe. The could let Tee play on another year of his rookie deal.
It's going to be hard to keep Tee here since we're going to be bidding to keep him as our WR2 when other teams are going to be bidding to make him a WR1. Just a hunch.
(02-01-2023, 03:51 PM)WeezyBengal Wrote: They have control of Tee for at least 3 more years. Next year under contract and then two years on the franchise tag if they choose to do that.
Tee isn't going anywhere any time soon if the Bengals don't want him to.
I'm no NFL salary guru, but wouldn't a franchise tag entitle him to make something like top 3 WR money? Using the franchise tag on a WR2 seems like it would be cost prohibitive. The franchise tag for a WR this year was just north of $18 million.
RE: How do extensions work? - WeezyBengal - 02-01-2023
(02-01-2023, 02:12 PM)Luvnit2 Wrote: Here is something I posted in another thread. The example I used for extending Tee is an estimate of a minimum of what is needed to extend Tee.
I would cut Boyd, I love him, but he is our 3rd best WR and is proven he is not a #1 or #2 if Chase or Higgins is hurt. Cutting Boyd adds 8.9 million in cap space (1.4 million dead cap).
Take the money and place towards locking up Higgins for next 5 years. Higgins is only a 4 million cap hit for 2023 and then a free agent. Extend Higgins, 5 years for 95 million with 60 million guaranteed. Give him a 50 million dollar bonus (spread out over 5 years or 10 million a year.
Salary - 2023 = 1 million + 10 million bonus = 11 million cap hit
Salary - 2024 = 4 million + 10 million bonus = 14 million cap hit (Higgins has now been paid 35 of the 48 million guaranteed)
Salary - 2025 = 10 million + 10 million bonus = 16 million cap hit (Higgins has now been paid 65 million and reached the 60 million guarantee)
Salary - 2026 - 13 million + 10 million bonus = 23 million cap hit (if cut or traded, 20 million dead cap, but no salary guaranteed)
Salary - 2027 = 17 million + 10 million bonus = 27 million cap hit (if cut or traded, 10 million dead cap, but no salary guaranteed)
In 2023, he would add an addition 7 million of cap space (he is already scheduled for 4 million cap hit) so 11 -4 = 7 million additional
Cutting Boyd would pay for Higgins in 2023 and add 1.9 million in 2023 cap space.
In 2024, cut Mixon - A 2024 cut would add 10.3 million helping to pay for Higgins 14 million cap hit
The Bengals need to find a Boyd and Mixon replacement in 2023 and 2024. Hopefully, player development (Williams) or the draft
The misconception is some fans don't understand how a lot of these long term contracts are written. They key is the upfront bonus teams can pay and then defer the bonus money over the life of the contract. This is why we see cap hits a lot less in the early years and higher in the latter years. The player cares about the guarantee as they means the team cares about the cash outlay and the cap hit (both have minimums to be met to stay in compliance). So it is not an easy to calculate a 5 year 100 million contract extension for 5 years by doing simple math of 100 million divided by 5 years = 20 million dollar cap hit each year.
A great resource is Spotrac. I like it as it has many years of date, shows team by team spend and cap hit (2 different things) and even projects the following year by division with an in depth analytics. For example, the Ravens have 28.8 million in cap space, but they do not have Jackson under contract. The problem the Ravens have is they can't simply extend him to lower their cap hit, they franchise him and they literally have to restructure contracts or cut someone as tag for QB's is 32.4 million in 2023 I believe.
Sorry, for the long post, I love discussing the cap.
I think thats a fair contract for Tee and I can get on board with that, but what's that mean for Burrow, Chase, and the rest of the team? Chase is going to want 5 years 120 million then if Tee gets that deal. You are going to lock up 200 million dollars into WR? I just don't see it.
RE: How do extensions work? - WeezyBengal - 02-01-2023
(02-01-2023, 03:53 PM)Nately120 Wrote: It's going to be hard to keep Tee here since we're going to be bidding to keep him as our WR2 when other teams are going to be bidding to make him a WR1. Just a hunch.
I'm no NFL salary guru, but wouldn't a franchise tag entitle him to make something like top 3 WR money? Using the franchise tag on a WR2 seems like it would be cost prohibitive. The franchise tag for a WR this year was just north of $18 million.
You are correct.
I am just stating that they will have control over him.
And I hate to say it, but guys like Chistian Kirk are making 18 million a year...so it'd probably be pretty safe to assume that Tee is going to want at least that.
I am against bringing back Tee, for the record. I think his production needs to be replaced via the draft, which is VERY doable, especially this day and age. The Bengals have showed time and time again that they can draft WR.
RE: How do extensions work? - casear2727 - 02-01-2023
(02-01-2023, 03:51 PM)WeezyBengal Wrote: They have control of Tee for at least 3 more years. Next year under contract and then two years on the franchise tag if they choose to do that.
Tee isn't going anywhere any time soon if the Bengals don't want him to.
We would never sign any non-QB player to a second tag though.
RE: How do extensions work? - Nately120 - 02-01-2023
(02-01-2023, 03:58 PM)WeezyBengal Wrote: You are correct.
I am just stating that they will have control over him.
And I hate to say it, but guys like Chistian Kirk are making 18 million a year...so it'd probably be pretty safe to assume that Tee is going to want at least that.
On the plus side, we should be able to get our pick of FA WR2's since Burrow will be the type of QB who makes his WR2's get WR1 money eventually.
(02-01-2023, 03:58 PM)WeezyBengal Wrote: You are correct.
Also, can I get this framed?
RE: How do extensions work? - casear2727 - 02-01-2023
(02-01-2023, 02:12 PM)Luvnit2 Wrote: Here is something I posted in another thread. The example I used for extending Tee is an estimate of a minimum of what is needed to extend Tee.
I would cut Boyd, I love him, but he is our 3rd best WR and is proven he is not a #1 or #2 if Chase or Higgins is hurt. Cutting Boyd adds 8.9 million in cap space (1.4 million dead cap).
Take the money and place towards locking up Higgins for next 5 years. Higgins is only a 4 million cap hit for 2023 and then a free agent. Extend Higgins, 5 years for 95 million with 60 million guaranteed. Give him a 50 million dollar bonus (spread out over 5 years or 10 million a year.
Salary - 2023 = 1 million + 10 million bonus = 11 million cap hit
Salary - 2024 = 4 million + 10 million bonus = 14 million cap hit (Higgins has now been paid 35 of the 48 million guaranteed)
Salary - 2025 = 10 million + 10 million bonus = 16 million cap hit (Higgins has now been paid 65 million and reached the 60 million guarantee)
Salary - 2026 - 13 million + 10 million bonus = 23 million cap hit (if cut or traded, 20 million dead cap, but no salary guaranteed)
Salary - 2027 = 17 million + 10 million bonus = 27 million cap hit (if cut or traded, 10 million dead cap, but no salary guaranteed)
In 2023, he would add an addition 7 million of cap space (he is already scheduled for 4 million cap hit) so 11 -4 = 7 million additional
Cutting Boyd would pay for Higgins in 2023 and add 1.9 million in 2023 cap space.
In 2024, cut Mixon - A 2024 cut would add 10.3 million helping to pay for Higgins 14 million cap hit
The Bengals need to find a Boyd and Mixon replacement in 2023 and 2024. Hopefully, player development (Williams) or the draft
The misconception is some fans don't understand how a lot of these long term contracts are written. They key is the upfront bonus teams can pay and then defer the bonus money over the life of the contract. This is why we see cap hits a lot less in the early years and higher in the latter years. The player cares about the guarantee as they means the team cares about the cash outlay and the cap hit (both have minimums to be met to stay in compliance). So it is not an easy to calculate a 5 year 100 million contract extension for 5 years by doing simple math of 100 million divided by 5 years = 20 million dollar cap hit each year.
A great resource is Spotrac. I like it as it has many years of date, shows team by team spend and cap hit (2 different things) and even projects the following year by division with an in depth analytics. For example, the Ravens have 28.8 million in cap space, but they do not have Jackson under contract. The problem the Ravens have is they can't simply extend him to lower their cap hit, they franchise him and they literally have to restructure contracts or cut someone as tag for QB's is 32.4 million in 2023 I believe.
Sorry, for the long post, I love discussing the cap.
I get what you are saying but dont understand a few items...
You said Tee is a 4M cap hit in 2023 which is correct: 3M salary and 1M signing bonus payment, but you have him as $1M and $10M bonus payment in 2023?
You said extend him for 5 years and you only listed 4 extension years.
2025 would be a $20M cap hit right?