Financial Details on Seward
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.
March 23rd, 2009 at 4:40 pm
[…] 2009 in Free Agency This from Indy Football Report’s friends at http://www.coltscap.net on the recent signing of linebacker Adam Seward . . […]
March 24th, 2009 at 10:14 am
Sounds like a win-win. Just hope he brings something to the table for the Colts.
March 25th, 2009 at 11:13 am
Brett, it would be really great if you could add an explanation section to your site as to clarify/specify the need for using a specific “rule” when calculating that particular player’s cap value. Basically, what actions are being represented through the use of such terms as signing bonus 1, signing bonus 2, roster bonus 1, roster bonus 2, roster bonus 3, roster bonus 4, workout bonus, incentive bonus, LTBE’s. and “other” ect. For example, it would be nice to know what the “other” was/is representing in Robert Mathis’s current contract or that his (roster bonus 4) was/is a reflexion of the x number of dollars he received in 2008 ect.
Also, it would be VERY HELPFUL if each player carried a CUT VALUE for us to see. That way, we could easily determine how much money any given player would cost/create the team in cap space if he were to be traded or let go. It would also let us know just how much of the player’s salary has already been paid, and therefore, what type of value he would represent with regards to his pay vs his play.
One last note. If you could find the time one of these days to write an article explaining the different ways in which teams are able to manipulate the cap, such as by moving money forward using loop holes like the UTBE clause, that would be awesome. For example, How were the Colts able to advance forward 8 million dollars of unused cap space from the 2007 season into their 2008 season simply by re-signing Tyjuan Hagler. Minimum salaries starting with ERFA’s and up would be nice as well.
I know that you are very busy man and that you are already doing a great deal of work just to provide us with all the information that you currently do. I just thought these might be a couple of useful ideas/suggestions to consider at some point, if and when you find the time.
Thanks again for the terrific siteJas