Mike Chappell of the Indystar pointed out to me earlier today that the NFLPA’s website lists Ryan Lilja’s base salaries for the next few years at $620,000, $630,000, $765,000 and $775,000.

That’s not really interesting until you note that the contract he signed last year had base salaries of $2.35M, $3.055M, $3.76M, and $4.21M.

A quicker look also discovered that Adam Vinatieri’s salary is down to $1.49M from what was originally scheduled to be $2M.  If the actual move is what I expect, the savings will be approx. $250K in 2009 (and will increase his 2010 cap hit by that amount, which will be guaranteed).

What at first seemed likely that happened with Lilja is that the team wanted to convert the $1mil roster bonus he was due to receiver into a signing bonus, saving the team $750K.  But changing the base salaries wouldn’t have been necessary for that as his remaining salaries would have fit under the 30% rule.  Rather, what seems likely is that the team guaranteed a portion of his base salary for 2009 and converted it to a signing bonus (under the definition sof the CBA).  This signing bonus however, is not covered within the 30% rule.  As such, a reduction of base salary in 2009 would result in a violation of the 30% rule as an increase to $3.055M in 2010 salary would far exceed 30% of $620K in 2009.  As such, all future base salaries had to be lowered accordingly.

Now, I think it’s HIGHLY unlikely that Lilja would simply reduce his base salaries voluntarily in future yeras without additional compensation.  To that end, there’s likely an option bonus for the amout of salary reduction given in each year.  That way, he’s essentially out no money because if they exercise the option to keep him, then he gets the money and if they don’t, he doesn’t.  It’s no different than being cut in terms of how much money he would get.

My Take:

Taking the reduction in salary for 2009-2011 and making it an option bonus for those years would circumvent the 30% rule for those years (I believe the CBA requires the prorated amounts of an option bonus counts as it’s prorated, rather than all at once like a roster bonus or not at all like a signing bonus) .  The only issue is in 2012, since it is the final capped year, the discrepancy doesn’t result in a savings as the full amount of the decrease ($3.435M) would hit in that year.

Perhaps that amount was moved forward and spread out earlier.  Perhaps he’s just not going to receive it and he truly took a paycut.  Regardless, I’m not going to know the specifics until I can get ahold of his agent or Polian (I think I’ll go with the agent first).

Either way, two things can be taken from this.

First, the Colts are in bad enough cap shape that for the first time in recent history that they’ve had to push money that otherwise wouldn’t have been guaranteed, into the future.  This isn’t a simple accounting restructuring like with Manning and Harrison in the past.  This looks like the team is actually pushing money into the future that they had not planned on doing.

Secondly (and perhaps more optimistically), it looks like the team is comfortable enough with where Lilja’s at that they would guarantee a portion of his base salary for 2009.  Had they not been comfortable, I would think that they would be hard-pressed to guaranteed the money that they wouldn’t have to pay at the end of training camp should he not be fully recovered from his knee problems.

Either way, things are moving the in the front office, and once I get more details, I’ll be sure to post them.

Finally, I’ve gotten a hold of them.  There’s a $13.5mil signing bonus and workout bonuses of $250K per year.  The deal will pay out in hard cash $29mil over the first three years, yet is friendly enough that if Hayden is cut after the second year or beyond, the team will save money against the cap, rather than having the dead cap exceed what otherwise would have been his cap hit.

You can find the details here.

Earlier, the AP published a report that Dan Muir and Lance Ball were given tenders as restricted free agents (RFA’s).

While correct in reporting the those players were tendered, the AP mistakenly called them RFA’s rather than exclusive-rights free agents (ERFA’s), their agent Tony Paige confirmed Thursday night in a phone call.

The distinction is considerable.  As ERFA’s, the players are set to make the veteran minimum for their positions ($460K for Muir, $310K for Ball) and are unable to negotiate with any other teams.  It is essentially a “take this deal or nothing at all” tender.  Had they been restricted free agents, the minimum tender they could have been given is $1.01mil and they still would have retained negotiating rights with other teams.

Muir is set to become an RFA in 2010, while Ball will again be an ERFA.

Hayden’s base salaries are out.

2009 - 1,730,000
2010 - 2,665,000
2011 - 6,105,000
2012 - 6,375,000
2013 - 7,125,000

Total - $24mil

Looking at the numbers though, his contract is not going to be a cut and dry simple contract.  Years 1 and 2 violate the 30% rule with respect to years 3-5, suggesting there are other bonuses in years 1-2 to compensate.  Also, the values sum to $24mil, while the original numbers reported ($43mil total, $22.5mil guaranteed) suggest that only $20.5mil is unguaranteed base salary.  The logical conclusion is that either the $22.5mil guaranteed is an exaggeration by the agent -OR- part of that base salary is guaranteed…or both.

The issue there is that being the last year, any guaranteed future base salary is calculated differently, with guaranteed base salary (unless the full amount is guaranteed) in 2010-2012 is counted fully in the capped year (2009) and half of all guaranteed base salary (unless the full amount is guaranteed) from 2013 and on being counted in 2009.  As such, it pushes that amount forward, which is something I’d think Polian would be hesitant to do.

I’m guessing there are roster bonuses for 2009 and 2010 that technically aren’t guaranteed, so that they don’t count as ’signing bonuses’ under the CBA and thus count towards the 30% rule, but at this point, it would only be guesses.  On a long-shot I’ve put in a call to Hayden’s agent, but as expected, have heard nothing.

Once I can find out more, I’ll be sure to post about it.

 Earlier this week, Bill Polian cited some of the difficulties in re-signing Kelvin Hayden.  Primarily, Polian stated that Hayden’s agent was being “unreasonable”.

Adam Schefter is reporting that Kelvin Hayden and the Colts have agreed to terms on a contract.  The value of the contract is reportedly  $43mil over five years with $22.5mil guaranteed.

If that’s reasonable, I’d hate to see what numbers the agent was being unreasonable with.

Early numbers aren’t out yet, and it’s not known at this point what the base salaries are, or how ‘guaranteed’ the guaranteed amounts are (agents LOVE to exaggerate the guaranteed amounts by including not-yet-guaranteed roster bonuses, etc.).

If the entire $22.5mil is included as a signing bonus, then there will be a yearly proration of $4.5mil.  If that’s the case and the contract follows the 30% rule, then the minimum 2009 base salary for year 1 for the remaining $20.5mil is $2.67mil.  In sum, that would make an early guess at the 2009 cap hit $7.17mil.  It’s quite certain however that as more information comes out as to the structure of the contract, that number will change.

However, at this point with my limited information, my preliminary guess would be that the 2009 cap hit would be around $7mil.

Okay,  I’ve managed to get my preliminary 2009 figures updated.  You’ll find them on the salary cap page.  Here are the notable/recent changes:

Freddie Keiaho

Freddie is listed on the NFLPA’s website as under contract for the 2009 season, though ColtsCap.net has learned that the 2009 contract year is a voidable year, making him a restricted free agent for 2009.  While the Colts will certainly be offering him a tender, he currently is not included.

Current Standing With the Cap

Currently, the Colts (according to my figures) are $2,533,376 OVER the projected 2009 salary cap of $123mil.  The team must be in compliance with the salary cap by the start of the new year.  Already included in this figure is the $2.85mil the team rolled over from 2008 through the manipulation of Likely-to-be-Earned bonuses.

Adjustments Still to be Made

Fret not, there are still ways for the team to get under the 2009 cap.  First off, I’m told the team is either in the process of or has already complete converting Dallas Clark’s $8.2mil roster bonus to a proratable signing bonus, which will save the team $6.56mil.  Further, should the team want more room, cutting Harrison will save an estimated $6mil against the 2009 cap as well.  The net savings from these two maneuvers would save the team approximately $12.56mil, which shifts their outlookfrom $12.5mil over the cap to nearly $10mil under the cap.

Waiting on Sanders

Earlier this offseason I noted that Polian had been on record as saying that he didn’t think the language of Bob Sanders’ contract would permit his $5mil roster bonus to be converted and prorated, similar to the process happening to Clark’s contract.  According to Mike Chappell of the Indy Star however, Polian still holds out the possibility that such a process may yet be possible.  Should it be allowed, the Colts would save an additional $3.75mil against the salary cap; space previously unaccounted for and space in dire need.

Remaining Needs

While the prospect of having $10mil in cap space sounds appealing, there are still funds that need to be accounted for.  I estimate that our rookie pool for 2009 will be in the range of $4.1mil, and given the accounting rules for the rule of 51, after subtracting the minimum salaries we would need to be able to account for approximately $2mil under the cap for rookie bonuses.  This cuts our cap space down to approximately $8mil or more.  Typically, we also carry $2-3mil in cap space during the season to use to pay for players replacing those who inevitable will end up on Injured Reserve.  This further cuts our cap space down to $5-6mil in free space without signing anyone else besides the rookies.

As mentioned earlier, Freddie Keiaho will be a Restricted Free Agent.  Trying to predict his tender is difficult, but I would estimate that he will be tendered between requiring 3rd round compensation and first round compensation, resulting in a 2009 cap charge between $1.01mil and $2.198mil.  This yet further reduces the available cap space down to $3-5mil to sign other players.

Should the Colts be able to convert Sanders’ bonus, our available cap space to spend rises to $6.75 - $8.75mil, which is considerably more space.  It opens up the possibility of re-signing a key player, such as Hayden or Saturday, or it opens up the possibility of not having to cut Marvin.

Hayden and the Franchise Tag

Mike Chappell today reported that Polian and Hayden’s agent are currently in negotiation, but at this point Polian’s “not optimistic”.  In the article, Polian mentioned that if no agreement was reached, he would likely use the franchise tag on Hayden.  The CB franchise tag for 2009 is $9.957mil.

The concerning aspect of using the franchise tag is NOT giving Hayden $9.957 for a single year, though I think you’d be hard pressed to say Hayden is one of the top 5 CB’s in the league and deserves to be paid as one.  If you’re using it as a method to reach a long-term contract with a player you place a great value on, then that’s fine.  If Hayden signs a long-term contract mid-summer, then there’s no harm; by the time the money is needed to be available to sign rookies in late July, the large number would be off the books and (hopefully) replaced by a more manageable number.

But what if Hayden signs it?

If he signs it and then doesn’t negotiate the contract, the full amount is on the books for 2009.  You can’t cut him; once the franchise tender is signed by the player, the amount becomes fully guaranteed unless the player negotiates another agreement.  What if you enter July with a $9.957mil CB on the books?  What if the team can’t convert Sanders’ bonus?  If the team enters the off-season $10mil under the cap, but then adds a GUARANTEED $9.957mil for Hayden, where will the $2mil for rookies come from?  Where will the $2-3mil for IR replacements come from?  Harrison would have already been cut, so the space starts to come from veterans who now are getting cut.

It quickly becomes a steep price to pay for a single defender.

With Hayden, the ball is completely in his court.  As a team with little space, we’re trying to sign him early to keep him off the free agent market because once he hits that, if there’s a team that wants him, we’re going to get out bid.  For Hayden however, there’s every incentive to wait and see what he gets, while if he signs now, he’s risking short changing himself with no real additional benefit to sign early.  If the reality of using the franchise tag on Hayden is something I’m aware of, then I can assure you that it’s something Hayden’s agent is aware of too.  Typically, you see the tag get leveraged against a plyer to sign a long-term deal, but here Hayden’s agent would be wise to dare the team to use it.  The use of it creates a guaranteed $9.957mil payout to his client AND the ability to feel out contracts for 2010 (assuming the non-exclusive tag is used).  If the tag is not used, Hayden walks into a free agency period with teams dripping with cap space and wanting to spend.   His client can’t lose, but the team can in a big way.

Using the franchise tag on Hayden is a big gamble either way.  At best, it costs the team all it’s available cap space for free agents at the beginning of the free agency period, including it’s own like Jeff Saturday (whose departure seems certain at this point).  At worst, it will cripple the team, forcing them to cut veterans just to be able to sign their rookies and Injured Reserve replacements.

If the team has to use the franchise tag, nothing good will come out of it for anyone but Hayden, and you can’t blame him for that.