As the Redskins have signed free agent after free agent over the past few days, the questions have kept popping up. How are they pulling this off with their supposed cap problems? And did they overpay for what they got?
The answer to the first one is easy. The Redskins’ cap guru, Eric Schaffer, is simply the best in the business. The organization doesn’t just throw around money; Schaffer crafts out each deal dollar by dollar, year by year to ensure that it fits within the team’s projected cap situation. The way Snyder runs the team generates the cash flow—cash beats cap—but it’s Schaffer who puts it all together.
Without going into details, (I’ve been told that the eyes of most of my readers here glaze over at such information) through the creative manipulation of the cap Schaffer and his team, helped by Snyder’s cash, can fit a six-year, $30 million contract with $10 million guaranteed into cap space of under $2 million in the first year.
And what about the other $28 million? Aren’t they just mortgaging the future, putting it on a big credit card that will come due at some point in the future?
Not really. To continue the credit card analogy, there a plenty of people out there who run up large credit card debts that manage them just fine. The bill for the balance never “comes due” as long as the money is managed properly with an eye towards the future. The debt can be refinanced and restructured as needed. You can keep on making purchases on the card as long as you stay under the limit and keep an eye towards the future. And you figure that as the years go by, you should be making more money, making the debt smaller relative to your income
The salary cap never “comes due”. It’s an ongoing thing. You can push money into future years indefinitely. As long as you don’t push too much into one season, you can keep doing it. Deals can be restructured and money pushed back. And the cap goes up from year to year, devaluing the dollars that you are pushing back.
To be sure, others use such maneuvers, but few do it as frequently and with such careful regard for the implications down the road as Schaffer does. Words like genius and mastermind get thrown around too often, but they apply to Schaffer. Should the team collect another Lombardi trophy in the next few years, Schaffer’s name should be engraved on it.
Perhaps one day the Petes and Lenny’s of the world will learn to praise the Skins’ cap management instead of predicting disaster year after year and then making snide comments about cheating when their forecasts bear no relationship to reality. I guess they’d rather continue to be wrong.
That’s how they paid. Now, did they overpay?
There is nary a Pro Bowl appearance among Adam Archuleta, Andre Carter, Brandon Lloyd and Antwaan Randle El. No league leadership in interceptions, receptions, or sacks among them. There are some highlight-reel moments starring some of these guys, no doubt. But their respective resumes, while better than pedestrian, are hardly the gold standard.
No gold changed hands, but a Brinks truck with some $40 million of guaranteed cash in it backed up to the facility at Redskins Park and dumped it on these four players (actually, Lloyd has not yet signed his deal, but he will get something in the neighborhood of $10 million guaranteed when he does). Did the Redskins pay filet mignon money for ground chuck?
First of all, in the year 2006, that is not filet mignon money. That went to center LeCharles Bentley, who the Browns are paying $36 million over six years with $12 million guaranteed, guard Steve Hutchison who will be paid $49 million over 7 years by either the Vikings or Seahawks, and running back Edgerrin James, who gets over $11 million guaranteed out of a four year, $30 million deal.
One thing that a lot of folks—media and fans alike—don’t seem to grasp is the fact that there is a lot more money to be spent this year than last. You hear a lot that each team’s cap went up $7.5 million due to the CBA extension. What you don’t hear much is that the cap was already slated to go up by $10 million even before the new labor agreement. Multiply that $17.5 million increase from 2005 to 2006 times the 32 NFL teams and you have over half a billion—that’s billion with a “b”—new cap dollars in play. It’s simple economics; when the money supply goes up, so do prices.
Still, it appears that the Redskins were happy to pay these guys more than anyone else was willing to. So, by that definition, they did overpay.
But if you get the player you want, it is really overpaying? Is it better to settle for someone who might save you a million or two but doesn’t quite fit your needs? A $2 million difference in guaranteed money on a six-year deal is $333,333 a season, or just less than the two-year veteran minimum salary. It adds up, no doubt, but it shouldn’t be enough to make you settle for second best.
Time will tell. Ultimately, the only thing that matters, the only way to judge whether or not the Redskins forked over too much money for a player, is results on the field. If the Redskins win and the new players fill their expected roles, it will have been worth every dollar and then some. If the team is not successful, it will be as though they had put a match to a dump truck full of $100 bills.