Rookie Contract and Reneg Discussion

[Flaxwless]

Had this in my head for awhile now and don't know why I bring it up now, but thought it was worth discussing.

Situation: Draft a rookie and sign him to a 2 year and after their rookie season you could reneg him for + 350 up to 5 years.

Issue: Does the rookie get the rookie bonuses for ONLY the original 2 years he was issued or do rookie bonuses apply for the ALL the reneg years up to a max of 5 years?

In addition to these base salaries, rookies will earn bonuses based on their performance each year of their original rookie contract. These bonuses will be based on their year end ranking among players of the same position. Players drafted after round 1 will receive a lower bonus for equal performance. That is, second round players receive a bonus 75% of that of a 1st round pick, 3rd round receive 25%, and 4th round receive 25%. Performance bonuses are earned on top of the standard 10% raise, not in place of it.
The minimum raise is 10% of the previous years salary. Any incentive bonus earned is above and beyond the standard minimum raise.
Further, each rookie will have a maximum salary that his contract can hit with incentive bonuses. The maximum salaries will vary on position and round drafted. When calculating for the maximum salary, the player will first be assessed his 10% annual contract increase, and then any applicable signing bonus will be applied up to the maximum salary payable according to the players position and the draft round and pick the player was drafted in. Once an incentive clause bumps the contract at or above the maximum salary, incentive bonuses will no longer apply, although the 10% annual contract will still apply on any remaining years of the contract.

- So the rookie rules state the bonus is applied to the "original rookie contract" until they meet MAX salary.

7I. Renegotiation
Players with more than one year remaining on their contract can have their contracts renegotiated by the team holding their rights. When a contract is renegotiated, the current years salary gets a 10% or 300cb raise, whichever is greater, and the contract can be extended up to the standard maximum of five years.
A player with less than one year remaining on his contract can only have his contract renegotiated if he is traded to another team. Once traded, the contract can be renegotiated with a raise of 5% or 150cb to the current year salary, whichever is greater. The contract can be extended up to the standard maximum of five years.

- The issue I believe is if we determine if "renegotiation" is an extension of the ORIGINAL rookie contract or a brand new deal.

So what do you guys think? I just want to make sure everyone is on the same page as allowing reneg to cancel bonus is a major loophole around rookie contracts.

MY OPINION: I think reneged years should count towards the original rookie contract and the bonus would be applied for up to 5 years or until the player reaches MAX salary.

It is against the spirit of the rookie bonus, IMO as the rookie bonus has a MAX salary that is still under market value. Also, the rookie bonus scale was formulated in Frenzy where there are no renegs.

[Burt the Butcher]

Bobby and I had this discussion the other day..seems to be a loophole if renegs do not carry over Bonuses with them....a way to keep a player undervalued..

I think I agree with Frank on this one...the Cap on salary to halt bonuses is reasonable, so it won't be like you'll keep getting hit with bonuses for 10 years on a player...

[Liquid Swords]

I agree with Frank as well

[pacificscrub]

As long as we have the 5 year cap, I'm fine with that. I just wouldn't think it fair to have "rookie" bonuses being paid in years 6, 7, etc.

[Bounty Hunter]

I realize i haven't been around long enough to see the full ramification of this, however I think this could be a strategy type thing. If you sign a rookie to a 5 year contract and he doesn't qualify for the rookie bonus then you come out ahead (cheap player for 5 years). On the other hand you sign a player to a shorter contract (say 2-3 yrs) and he doesn't qualify for the rookie bonus and you REN his contract he could cost you more.

As long as the player is subject to bonus for the entire length of the original contract I don't see a problem. Once you REN the player is longer subject to the bonus.

If I'm missing something someone please point it out.

[Burt the Butcher]

That is what we are discussing Bobby - should a reneg be considered an extension of original contract, or a brand new one? Since the wording is, the contract can be 'extended' I think the intent of the rule was if the player was renegotiated, the rookie bonus should still apply until the reach the max level.

[Flaxwless]

Originally Posted by Bounty Hunter

I realize i haven't been around long enough to see the full ramification of this, however I think this could be a strategy type thing. If you sign a rookie to a 5 year contract and he doesn't qualify for the rookie bonus then you come out ahead (cheap player for 5 years). On the other hand you sign a player to a shorter contract (say 2-3 yrs) and he doesn't qualify for the rookie bonus and you REN his contract he could cost you more.

As long as the player is subject to bonus for the entire length of the original contract I don't see a problem. Once you REN the player is longer subject to the bonus.

If I'm missing something someone please point it out.

I don't see much strategy in what you are suggesting.

If you sign a rookie for 5 years and he doesn't qualify for a bonus that means he sucks since bonus are paid if they are starters (Top 12 QB, Top 24 RB, Top 36 WR, and Top 12 TE). So you're stuck with sucky player who isn't even worth his rookie contract... you're likely OVERPAYING for a scrub.

On the other hand again if you sign a player with a 2-3 year deal, he doesn't qualify for the rookie bonus (again he's not starter material), and you reneg his contract you're an idiot.

Now the flip side is you draft a RB with the 1.1, sign him to a 2 year deal, and in his rookie season he is the #1 RB. He's a stud so you want to reneg him now to a full 5 years but only the first 2 get rookie bonuses. Let's see what happens.

Rookie year: 600 cbs/2 years, #1 RB overall due 1k bonus
- You reneg him before the next year roll over. So 1st year goes to 600+350 = 950/5 yrs
2nd year salary: 950+1000 = 1950*1.10 = 2145
- 2nd season his finishes #1 overall again = 1000 bonus
3rd year salary: 2145+1000= 3145*1.10=3459
4th year salary: 3805
5th year salary: 4185

Compare to if he is never reneged:
Rookie: 600
- Finishes 1st
2nd: 600+1000= 1600*1.1= 1760
- Finishes 1st again
3rd: 1760 + 1000 = 2760*1.1 = 3036
- Finishes 1st again
4th: 3200 max for RB
5th: 3200*1.1= 3520

So apparently it looks like in the case of RBs you would actually spend more money if you assigned a shorter deal and reneged. You guys could look into it further since I was looking at the most expensive rookie possible (#1 drafted overall and finished #1 during all his years).

[Burt the Butcher]

Thanks for the stats Frank...that puts things into perspective...

Lets get more input from everyone and see where this goes..we may want to put it up to a vote to clarify things...

[Bounty Hunter]

In a real world situation it will probably be real close to a draw. I did a quick look at C Johnson drafted at 1.08. He finished #11 in 08 and #1 in 09. If he finishes #1 in 2010 and had an original contract for 3 years there woud be a savings of 264cb in 2011 (assuming I did the math correct).

So if someone wanted to do this to save cap space they would have to get lucky and have a lot of things fall in place.

I still like the idea of giving people this option (sign a rookie for 3 years and subject to 3 years of bonus). Although I will probably sign all/most of my picks for 5 years.

[Flaxwless]

Originally Posted by Bounty Hunter

In a real world situation it will probably be real close to a draw. I did a quick look at C Johnson drafted at 1.08. He finished #11 in 08 and #1 in 09. If he finishes #1 in 2010 and had an original contract for 3 years there woud be a savings of 264cb in 2011 (assuming I did the math correct).

So if someone wanted to do this to save cap space they would have to get lucky and have a lot of things fall in place.

I still like the idea of giving people this option (sign a rookie for 3 years and subject to 3 years of bonus). Although I will probably sign all/most of my picks for 5 years.

Agreed. I think since a quick look at the numbers suggests that it's not as much of advantage as I initially thought. With that in mind I think the real issue is what makes it easier to keep track of IMO.

As someone who used to maintain the Roster Apps, it would be a real pain having to track which rookies were reneged or not and who gets bonuses applied to them. For simplicity sake I think renegs should still get the bonuses up to 5 years or rookie MAX to make life easier for those keeping this league running.

[Bounty Hunter]

I'm all for anything that makes it easier on those that volunteer their time to keep this league going.