Salary cap updates
The Burress situation
Generally when a player is signed to a long term contract, he is given an up front signing bonus in order to spread the affect of the salary over several years. However, there is an obstacle when the player is cut, traded or otherwise leaves the team, because the remaining non-amortized portion of the signing bonus is accelerated into the current year and creates a one year salary cap hit on the team. There are nuances to the size of the salary cap hit related to precisely when the player separates from the team, but leaving that aside, there is a salary cap hit in that first year. On the surface, this would seem to be a problem with Plaxico Burress. The Giants signed him before the 2008 season to a contract extension that was said to be worth $35 mil over 5 years. Consequently, we might assume that if the Giants were to cut Burress, they would save the salary portion of his contract for 2009, but would be charged the remaining 4 years worth of the up front bonus (80% of it for those of you who are mathematically challenged) and it would cramp greatly their ability to sign FA's this year.
Not to worry - GM Reese and the Giants built some protection into this contract and while it was for $35 mil, very little of the money was up front guaranteed; most of it was in roster bonuses, performance incentives and behavior clauses. For example, if Burress was suspended twice by the team for conduct detrimental to the team, he forfeited some of his future incentive money. This was a great move by Reese - providing money to the player if he performed and giving protection to the team if he didn't. Unfortunately for the team and for the player, the Giants will be able to employ these clauses for their protection and Reese comes off as being positively prescient in putting them in.
For a full analysis of the contract, you can take a look at Peter King's SI article of December 1, 2008, but it is hard to find the part about Burress buried in that article, so I've summarized the highlights below:
The Giants can cut or trade Burress after the season and simply eliminate $23 million of the $27-million-in-new-money deal he signed with the Giants.
As a roster bonus on Dec 1, 2008, Burress was due $1 million from the original and only guaranteed money in the deal, the third installment of a $4.325-million signing bonus when he originally signed. The non-guaranteed money in the Burress deal is as follows:
• Non-guaranteed base salaries: $11.5 million ($1 million in 2009, $3.5 million in 2010, $3.5 million in 2011, $3.5 million in 2012).
• Non-guaranteed one-time bonus to be paid early in the '09 off-season: $2 million.
• Non-guaranteed roster bonuses: $3.5 million ($500,000 in '09, $1 million in 2010, $1 million in 2011, $1 million in 2012).
• Non-guaranteed escalators, payable only on high performance: $5 million ($1.25 million in '09, '10, '11, '12.) He has not reached his escalators yet that would kick in for 2009.
• Non-guaranteed workout bonuses: $1.3 million ($325,000 in '09, '10, '11, '12).
The above non-guaranteed money does not get paid if Burress is cut, so I think he is gone.
Other salary cap moves
This week, the Giants announced the completely unsurprising, almost expected cuts of: Sam Madison, Reuben Droughns and Sammy Knight. This saves the Giants an additional $4.25M off their salary cap for 2009. The Giants are probably going to sign a long term deal with Eli before the next season to avoid him becoming FA in 2010, the year they move into their new stadium. There was really no reason for the Giants to cut these players now, since they are not over the salary cap and they could have held onto them until right before training camp to see how the team shapes up and if they might need one of these veterans. Therefore, becasue the Giants cut them now, I think it signals that the Giants might be somewhat aggressive in the FA market signing period that begins February 27th. The wanted to clear the space now so they could be prepared to strike when the time begins. Frankly, I am somewhat surprised that the Giants also did not cut RW McQ. He has a fairly high salary cap number considering that he is no higher than the 5th CB on the depth chart and, depending what the Giants do with James Butler, the 4th S.
Earlier posts based on information gained from various sources, it appeared that the Giants were about $10m under the projected 2009 salary cap. But that was before the Giants adjusted Darcy Johnson's contract which increased the cap by about $7.25M, and was before the cuts the Giants announced this week, listed above, which saved them about 4.25M. This brings the salary cap room to about $21M. Furthermore, if the Giants cut Burress, they will recapture his salary cap number for 2009, which was estimated to be about $3.25M If my calculations are correct, the Giants will have about $21M in salary cap space.
Amani Toomer, Brandon Jacobs, Derrick Ward and James Butler are the main FAs. David Carr was also a FA but, interestingly, he resigned with the Giants.