Free Agency 2022 Almost here

[*TheLeonardLeap*]

(03-08-2022, 11:42 AM)SunsetBengal Wrote: What is the consequence for teams that convert salary into signing bonus for the purpose of circumventing salary cap restrictions?

Whatever you convert is divided equally among the remaining years on the contract. So you'll eventually have to pay it, but by then the cap will have risen enough that it isn't really a problem.

Just for example say a guy signed a 5yr/$60m deal with $10m/yr base salary each year and a $10m signing bonus. $12m cap hit each year. 

In year 2 of that deal they convert $8m of the $10m base salary to a signing bonus. That $8m is then spread equally over the remaining 4 years of the deal so rather than a 12/12/12/12 cap hit contract, it is now 6/14/14/14 cap hits. You've cleared up $6m this year by increasing it by $2m more each of the next 3 years.

Then say in year 3 of the deal, they convert $9m of the $10m base salary to a signing bonus. That $9m is then spread equally over the remaining 3 years of the deal so rather than a 14/14/14 cap hit, it is now 8/17/17 cat hits. You've cleared up $6m again by increasing the final two years by another $3m each.

So yes you have a $17m cap hit in year 4 of a $12m/yr deal, but it's been 3 years so the idea is the cap has risen enough that it's not as problematic as it might seem now considering the cap will be north of $250m in 2024, and you were able to spend an extra $6m/yr in both year 2 and 3 of the deal to add extra talent to your team.