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Good Cap Management Article By Lenny P. (Pro - Eagles)

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  • Good Cap Management Article By Lenny P. (Pro - Eagles)

    Teams using cap room for early extensions

    --------------------------------------------------------------------------------
    By Len Pasquarelli
    ESPN.com

    Give just about any salary cap manager in the NFL an extra $100 of wiggle room and the money usually burns a hole in his pocket. Give him a nearly 20-percent increase in the spending limit, as the league did for this season, courtesy of the extension to the collective bargaining agreement, and he'll be using C-notes to light his cigars.
    OK, so maybe that's not quite the case.

    But since the CBA extension kicked in, setting the 2006 salary cap at a record high $102 million, some teams have come out smokin' in pursuit of long-term deals with younger veterans they consider "nucleus" or "core" players. The huge salary cap increase, the second-largest in league history on a percentage basis, coupled with improved cap management in general around the NFL, has resulted in some notable contracts that otherwise might have not been consummated.

    Exhibit A: San Diego Chargers center Nick Hardwick, only two seasons into the three-year contract he signed as a third-round draft choice in 2004, last week signed a new, six-year contract through 2011.

    Given that Hardwick started 27 games in his first two years, and already has established himself in the view of some scouts as a top 10 snapper, the deal wasn't unusual. But the timing certainly was. Hardwick was due a 2006 base salary of $425,000, the minimum for a third-year veteran. Had the Chargers not touched the contract, Harwick would have been eligible for restricted free agency next spring, but San Diego almost certainly could have curtailed any potential suitors by making him the mid-level qualifying offer, which likely will be set at about $1.7 million. So, for a total outlay of a little over $2.1 million, the Chargers could have secured Hardwick for two more seasons.

    Instead, in those two seasons, San Diego will pay the former Ohio State star $6.25 million in bonuses and salaries. Of course, under the old contract, and with just a qualifying offer to keep Hardwick around for the 2007 season, he might have departed as an unrestricted free agent in the spring of 2008. The new contract, which is worth $17 million in so-called "new money," and includes roster bonuses totaling $5 million this year ($2.8 million) and next spring ($2.2 million), keeps Hardwick around through 2011.

    And that, said agent Craig Domann, who provided the impetus for the extension, is the point.

    "From the team's standpoint, if it has a good player, and he continues to be an ascending player, the longer the club waits to sign him (to an extension), the more expensive he becomes," said Domann, who became proactive last December pitching a long-term deal to Chargers officials and who finally got their attention this spring. "From the player's standpoint, if I've got a good young veteran who has outplayed his contract, it's smart to make a move. Once a player establishes himself, and a team is convinced that he is a good player, it's more prudent to do (an extension) early, rather than wait. Because if you wait, and a guy gets closer to free agency, he's less likely to extend. And then you lose the player and end up spending even more money to replace him."

    When a team is sold on a player, and has sufficient cap room, why risk losing him? As Domann noted, for such players, it is usually a case of paying now or paying considerably more later, as he nears free agency and his price tag spirals upward exponentially.

    Before the Hardwick extension, it's believed the Chargers ranked last in the league in aggregate salary cap money invested in its offensive line. But general manager A.J. Smith has done an excellent job the last few years infusing good young players, such as guard Kris Dielman and tackle Shane Olivea, into the line, and those guys will have to be paid, too.

    Hardwick was the first one to the pay window and his deal is a win-win for both parties.

    Hardwick, 24, gains a degree of financial security he probably would not have achieved for another couple years. The Chargers, who had a boatload of cap room, get an ascending player -- Hardwick was the third alternate at center in the AFC Pro Bowl voting in 2005 -- and at a palatable price.

    For this season, Hardwick's salary cap charge is $3.486 million. But after this season, his cap charge does not rise above $3 million until 2011, the final year of the contract, when it peaks at $3.675 million. At that point, Hardwick will be only 30 years old, and should still have at least one more big contract in his career.


    The Chargers signed C Nick Hardwick to a contract extension through 2011.
    Under team president Joe Banner, the Philadelphia Eagles have been doing business like this, extending the deals of young "core" players, for years. And it is a major element of the Eagles' success.

    It all starts with good scouting, of course, and under the stewardship of general manager Tom Heckert, the Philadelphia personnel department is among the NFL's elite. So is the coaching staff that Andy Reid has assembled, and so players typically are developed without being rushed into the lineup. But the Eagles have taken things a step beyond, and are remarkably adept at identifying key players very early into their careers, and at signing them to extensions, sometimes several years before their original contracts expire.

    Rarely have such "early" deals backfired on Banner and the Eagles.

    Philadelphia struck again last week in signing third-year guard Shawn Andrews, the team's first-round choice in the 2004 draft, to an extension through the 2015 season. There certainly was no urgency to do so. Even though Andrews voided the final season of his original six-year deal he signed as a rookie, he was still under contract through 2008. But the Eagles, who always seem to have $10 million-$12 million of available cap space, had money to spend, as usual. And despite his past weight problems, the Eagles regard Andrews as a cornerstone for their line in the long-term and a future Pro Bowl performer who eventually might move outside to tackle.

    As part of the extension, the Eagles rewarded Andrews with a $5 million signing bonus and a $5 million roster bonus, meaning he'll earn $10 million more than the $600,000 in base salary that he was scheduled to bank this season. And the Eagles will carry a salary cap charge for Andrews of $7.779 million.

    But consider this: That is the highest salary cap charge for any season of the contract. In 2007, the charge drops to $4.71 million, and then after that, it dips under $4 million until 2013. And the cap charge doesn't rise to over $5 million until the penultimate year of the contract, in 2014. By then, of course, the odds are that the two sides will have reworked the contract. But for a long time, the Eagles will enjoy short salary cap charges for a young player they regard highly.

    The Eagles will pay Andrews base salaries of $2 million or less until 2011 and of less than $3 million until the 2013 season.

    How much the practice of signing core players to long-term extensions early in their careers escalates remains to be seen. The Chicago Bears, for instance, steadfastly have declined to extend the contract of Pro Bowl cornerback Nathan Vasher, who claims to be only the 131st-highest paid player at his position for the upcoming season. Like Hardwick, Vasher is two years into his contract. But he signed a four-year contract, not a three-year deal, as did Hardwick. And with two seasons remaining, at total base salaries of just about $900,000, the Bears don't have much motivation yet to address his financial grievances.

    Still, it's anticipated that "early" extensions will become more commonplace around the league as the salary cap ceiling, which will go to $109 million in 2007, gets fatter. And the long-term ramifications of these long-term extensions could be interesting. With more players locked into such contracts, free agent classes will continue to shrink in quantity and quality every spring. There could be fewer attractive players in the market because teams might have secured their futures before they even approach free agent status.

    "We have several young, ascending players, and we're trying to do the same thing for many of them," said Domann, who with longtime partner Drew Pittman and recently added associate Leo Goeas quietly has created one of the NFL's top representation firms. "We've been really proactive in approaching teams about such deals. Why should my guys have to wait four or five years to get their money? When you consider all the variables and the risks -- the potential for injury, coaching changes, all those things -- it's not good business to just sit back and wait."

    Len Pasquarelli is a senior NFL writer for ESPN.com. To check out Len's chat archive, click here .

  • #2
    Banner, that rascal..........

    But actually the Eagles have been doing this same type of thing for years.......part of that original "plan".

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    • #3
      I very key point was touched on by agent Domaan. He said it was a good deal for his client because of injuries....as we all discussed before, but he also mentioned COACHING CHANGES." That is an interesting point that we seem to overlook. Coaching changes are just about expected in this league, so agents also recognize that such changes can hurt their client.

      Coaches change player. Coaches change systems. Coaching chnge normally means bad teams. All of this can either hurt a player on his current team which could mean less playing time....whcih could mean crappola when they become a free agent.

      Remember how Young turned down going to the Jets, because he said he felt he had one the best coaches in Juan? Just think, he could have gone to the Jets and been cut this summer by a new staff who have a different philosphy in what they want from their linemen. The Iggles love BIG and strong linemen (Andrews and Jean-Gilles). Some teams prefer athletic and quicker guards for pulling. Young could have gone to the Jets and been stuck on a bench and learning nothing from a lesser O-line coach. That could have been what his agent was telling him. He may have felt that PHilly will teach him the best and have him ready by the end of his contract.....better than anyone else.

      I DO NOT see the Iggles changing coaches for a long time.....and I believe agents recognize that too.
      Pedro

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