Earlier last week, Mike Chappell of the IndyStar and Paul Kuharsky of ESPN reported that the Colts signed free agent Adam Seward.  At the time, financial details were unavailable.

ColtsCap has since learned that the reported one-year deal is for the veteran minimum ($620K) of a player with 4-6 credited seasons (Seward has four).  A one year deal for a veteran with four or more seasons at the applicable minimum salary potentially qualifies the player for what is called the “Minimum Salary Benefit”.  This benefit is a reduction of the salary cap accounting for a veteran player who signs a contract that meets certain requirements:

• The contract is for one year in duration;
• The contract is at the minimum applicable salary; and
• The contract contains no more than $50K in bonuses.

Should a contract meet the requirements for the benefit, that player’s cap hit for the year will be that of a veteran with two credited seasons ($460K in 2009), plus any bonus money he received.

Given the team’s history with these types of contracts, I think it’s likely that Seward received the full bonus amount of $50K on top of his $620K base salary.  If true, his 2009 cap hit would be $510K.  As this bumps out a player with a 2009 cap value of $385K under the Rule of 51, the team’s net cap space is only decreased by this signing by a mere $125K.

The team has a long history of using these types of contracts.  Both Aaron Moorehead and Rob Morris had multiple contracts of this type.  More recently, this is the same type of contract Dominic Rhodes signed with the team last year (and I expect him to sign again this year, FWIW). It’s an excellent mechanism to bring back veterans who want to play, and to be able to do so for the same cost as many third year players on their rookie contracts.

This benefit was agreed upon primarily to help older players avoid being phased out simply because the required minimum base salaries for them were much greater than those younger players.  These additional required costs associated with signing older players were eliminating the opportunities for those players, rather than their abilities.  This benefit evens the negotiating field in that if a player is willing to accept a contract under this benefit, then with the financial differences essentially a wash, the teams can make decisions on talent, rather than cost.

Rotoworld is reporting that the Colts have resigned Lance Ball and Buster Davis to the 2009 roster.  Both players were Exclusive-Rights free agents.

The expected salaries for both players are $310K for Ball and $385K for Davis.  Both should be for a single year in duration.

With off-season activities getting set to commence and both players needing to do all they can to make the final 2009 roster, it’s no surprise that their signing occured at this time.

Colts.com is reporting that OT Dan Federkeil has been resigned.  Terms of the signing were not disclosed.

I’ll disclose them; 1 year, $535K.

Federkeil was an Exclusive-Rights Free Agent (ERFA).  An ERFA is an NFL veteran with less than three accrued seasons.  A Restricted Free Agent is an NFL veteran with three accrued seasons.

What’s interesting however, is that Federkeil is a three year veteran, being active in 2006, 2007, and 2008.  His minimum salary for 2009 of $535K is that of a veteran with three credited seasons as well.

The distinction that is made is that between credited seasons and accrued seasons.  An accrued season is a season “during which [a player] was on, or should have been on, full pay status for a total of six or more regular season games”.  A credited season is a season in which the player “was on, or should have been on, full pay status for a total of three or more regular season games”.

Therefore, in 2006 when Federkeil was activated for the last five games of the season, he was advancing himself a year ahead in terms of credited seasons for purposes of the minimum salary applicable to him, however he was getting himself no closer to the threshold for free agency, which is determined by accrued seasons, not credited seasons.  It’s also why a veteran going into his fourth credited year was still considered an ERFA rather than a Restricted Free Agent.

Earlier in the week, we reported that there was a sudden and considerable drop in Ryan Lilja’s base salary for reasons then unknown.  We speculated that the common act of guaranteeing a portion of his base salary (which enables it to be prorated like a signing bonus) is likely what transpired, with the future years reduced (and other accounting measures taken) to be in compliance with the 30% rule.

Today, Mike Chappell reported for the IndyStar that the restructuring is simply a clear cutting of his base salary with no guaranteed money, but that “[Lilja] could earn some of that back if he makes a full recovery and regains his starting spot“.

To me, it sounds like the differences in base salaries were simply made into an incentive bonus for those years contingent upon some level of performance in 2009.  As he didn’t take part in a single snap in 2008 due to his injuries, the bonus would be a NLTBE bonus and not included in the team’s salary cap for 2009.

However, any performance at all would seem to trigger the bonus (if the bonus has the expected low threshold, such as starting 1 game).  Normally, meeting this incentive would be accounted for by a charge against the 2010 cap so that the 2009 cap remains unaffected.  However, being the last capped year, the rule is different.  In the last capped year, if an NLTBE bonus is earned, that amount is IMMEDIATELY included in the cap for the current year, in which case his cap hit for 2009 immediately jumps to include the bonus, which would seem to be the original amount the base salary was reduced by.  This would then make his 2009 cap hit identical to his original cap hit prior to restructuring.  To that end, there’s really no ’savings’ for the team because at any moment, they could have to add the original amount back in, unless he goes on IR.  Sure, the money is off the books now, but until you know he won’t trigger the incentive to be met, you always need to keep a placeholder on those funds just in case he does.  This suggests to me that this move wasn’t a permanent cost-reducing move for 2009, but rather the team protecting itself in the event Lilja can’t play in 2009.

The question then shifts as to the reasons why each side would agree to the deal and specifically Lilja.  If Lilja isn’t healthy yet and he gets put on IR for 2009, he’ll only earn the reduced base salary rather than the full amount.

Here’s the real benefit to both sides of this renegotiation.

For the Team:  If Lilja can’t perform in 2009 and gets put on IR, he’ll assumingly not trigger the bonus and will only earn the reduced base salary for 2009.  The team saves that much money over having to pay his original base salary.

For Lilja:  Lilja makes some money because if he’d have been cut at the beginning of the league year, he wouldn’t have made a thing (who would sign him in this shape?).  He may make less this year than originally planned, but it 1) keeps him on a payroll for more money this year (as opposed to no one signing him and making nothing), 2) it gives him the $1M roster bonus he’s due and 3) it gives him the chance to earn more in the future, should he eventually recover.

The real result of this renegotiation is that Lilja gets everything he would have originally earned should he be healthy.  Should he not be healthy, Lilja ensures that he gets paid something and retains the possibility for a future payday with the Colts.  The team meanwhile ensures that if he’s not healthy, they’re not on the books for $4M sitting on IR (which is what they’d have to do if they wanted to keep him past this year in case he does recover).

In other words, if Lilja recovers, he gets his normal contract.  If he doesn’t, the team gets a much cheaper one-year placeholder on his contract.

The real problem here is that both sides are even talking about this.  How much confidence that Lilja will return healthy does it give you when BOTH sides appear to be sufficiently concerned about it so that they specifically negotiate a contract for provisions on Lilja’s health?

If Lilja felt good about his recovery, why would he risk losing pay?

The flip side is that the team felt good enough about his long-term prognosis that thy went ahead and exercised a $1M roster bonus to make sure they retained his rights, as well as absorbed the possible IR hit should he not recover for 2009, rather than cutting him outright at the start of the year.

My interpretation with these events is that neither side knows what is going on with Lilja and both sides are hedging their bets for both results.  That said, Lilja’s future with the Colts (and maybe the NFL) is up in the air at this point, with both the team and the player making maneuvers that bring into question their confidence in his recovery.  This is surely not the news the team and fans were hoping for.

Earlier in the week, like I so often do, I speculated on what Saturday’s contract construction would look like based on the minimal information available to me at the time.  It turns out I wasn’t that far off.

ColtsCap has received confirmation (as best we can) from Mike Chappell of the IndyStar that the hard numbers of Saturday’s contract include a $7.45M signing bonus, rather than the estimated $7.35M signing bonus.  The distinction will add an additional $33,333 to each year. Therefore, his offical contract construction is:

2009:  $1.5M + $2,483,333 = $3,983,333
2010: $1.95M + $2,483,333 = $4,433,333
2011: $2.4M + $2,483,333 =  $4,883,333

You’ll note that the cap hit for the first year is a shade under $4M, which not-so-coincidentally is the additional amount the NFL raised the cap for teams just before free agency.

Well, so much for my $800K under the cap statement.

Earlier this year, ColtsCap learned that there was a $3M escalator in Marlin Jackson’s contract with no further details available.  To that extent, we were right, there was a $3M escalator in his contract.  At the time, the specifics of the escalator were unknown.  However, we’ve recently learned that while there was a $3M escalator, because of the specifics of the escalator (presumably arising out of playing time) and the fact that Jackson missed considerable time last year with a knee injury, the actual escalation is a mere $1M rather than the aforementioned $3M.

The resulting $2M discrepancy creates $2M in cap space that was previously unaccounted for by me.  So that puts the team closer to $2.8M in cap space, with the details from Lilja’s apparent restructuring still unavailable to be added in.

Once I can finalize Lilja’s numbers, I’ll be sure to update the salary cap page.

I’ve suggested elsewhere that both Manning and Mathis would be prime candidates to restructure, given their relatively flat salary curve allowing a larger amount of 2009 base salary to be guaranteed and prorated.  However, depending on the possible savings with Ryan Lilja, such a move may not be necessary.

Today, the NFLPA’s database update included Jeff Saturday, giving me my first glimpse at his 2009-2011 figures.

The listed base salaries are $1.5M, 1.95M, and $2.4M.  Given that this matches the maximum growth under the 30% rule, my assumption is that these figures encompass all 30% figures, meaning that the only other amounts that could be added (if my assumption is true) are signing bonus(es).  Given that John Clayton earlier reported the total value of the three-year deal to be $13.2M and that the given base salaries sum to $5.85M, the conclusion is that I estimate the signing bonus to be in the neighborhood of $7.35M.  Therefore, based on my assumptions, Saturday’s contract construction should look like this:

2009:  $1.5M + $2.45M = $3.95M
2010: $1.95M + $2.45M = $4.4M
2011: $2.4M + $2.45M =  $4.85M

Should Saturday be cut after 2010, the cap hit for 2011 would be $2.45M in dead money, resulting in a 2011 savings of $2.4M (assuming a new CBA is signed and the rules remain the same).  In that case, Saturday will have received $10.8M over two years of service, but his contract (being spread over three years) will average a mere $3.6M per year.

Should he play the full three years, his contract will average out to $4.4M per year.

Once I can confirm these figures, I’ll be sure to let people know.

Counting his $3.95M cap hit into my figures, I currently have the team right at $800K UNDER the salary cap, with the savings from the apparent Lilja restructuring still to be factored in.  For all you hoping for big free agent signings, at this point it looks like it would take either a massive paycut or a massive accounting error on my part (a much more likely option) for that to be a realistic possibility.