HK Draft Info "Heads Up"

Discussion in 'Hard Knocks' started by uagrad90, Oct 14, 2014.

  1. uagrad90

    uagrad90 Walk On

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    OK I wanted to give everyone a little heads up on some information I learned yesterday while running some CFM financial tests. Since we are in week 1 of FA and the draft is right around the corner and many teams are close on funds I wanted to give you a heads up of whats looming.

    I ran 5 or 6 online CFM tests yesterday (and I changed none of the financial stuff) and in doing so I learned that after the draft we will be hit with draftee signing bonuses. My first thought was what about draftee reserves. Well I checked those each time and started my simming. During each test I entered the off-season in the positive in funds, with 1 season having 9M in funds. I simmed up to the draft and stopped and in each case I was positive in funds and my cap was in great shape, once over 50m. After every draft but 1 I went into the negative on funds. Why you ask, well what I learned was that the bonuses that are paid to the draftees comes out of your funds and the amount varies depending on how many picks you have, how many picks you have in the 1st 3 rounds and how high you are picking. I doubled check by adding up the bonuses and the salaries and looking at my rookie reserve and my funds.

    One case I had 2 1st round picks and the other 6 rounds I had a top 10 pick. The signing bonuses in this case cost me 19M which took me from 9M positive to 10M in the hole. One test I had top 15 picks and just the standard 7 picks and it cost me 12M. I had one test were I had 5 picks and I had no 2rd rounder, this only cost me 6M.

    So what does all this mean. When you do FA you need to look at your picks and figure to set aside at-least 12M unless you are picking in the back half or do not have all 7 picks. Also knowing how HK and some like to wheel and deal on picks, you better look closely at your funds before trying to get multiple picks in the 1st 2 rounds, I would assume 6M per extra pick if you do.

    This has been your HK public service announcement :)

    Hard Knocks
     
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  2. controllerabuser

    controllerabuser Purple People Eaters

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    Thanks Guy for clearing that up.
     
  3. Danthraxxx

    Danthraxxx Walk On

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    Well that is spectacular news
     
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  4. G_T_G

    G_T_G BEAR DOWN

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    Didn't know I'd have to be doing all this extra math this year. Thanks EA!
     
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  5. uagrad90

    uagrad90 Walk On

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    Look at it as Continuing Learning Points in the field of Math.
     
  6. BobJr

    BobJr To each their own

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    They always told you that you would need it in every facet of life....
     
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  7. HAL9100

    HAL9100 TSO's Resident Antagonist

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    Didn't Madden used to set aside draft expenses from your budget? Or is that a Coach Mode thing instead of Owner Mode?
     
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  8. Danthraxxx

    Danthraxxx Walk On

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    It is listed in the TEAM SALARIES page , but I don't think in years prior the rookie reserve funds came out of your funds ? I may be wrong , but I feel like that changed and might be causing some issue.
     
  9. uagrad90

    uagrad90 Walk On

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    Yea there was rookie reserves before but I don't remember were the bonuses came from. Last year really wasn't an issue. Only reason I saw it this year was because I was purposely looking at the financials and noticed a went negative when i was positive and I wanted to see why. And that's when I saw it.
     
  10. NeuroticTruth

    NeuroticTruth dont know , dont care

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    I think the bonuses always came out of your funds. I think the reserves are already taken out of your cap room.
     
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  11. HAL9100

    HAL9100 TSO's Resident Antagonist

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    Was the bonus always paid immediately? Maybe that's the difference? Looking at Blake Bortles IRL contract, that's basically a $10 mil difference right there. However, that's also something that would balance itself out over the course of his 4 year contract.

    Edit: And on that note, could you trade these rookies immediately without a penalty since the bonuses are already paid in full?
     
  12. uagrad90

    uagrad90 Walk On

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    Yea that I'm not sure. It may have but its magnified right now I guess with funds so tight.
     
  13. Kidofcrash23

    Kidofcrash23 Walk On

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    Just an FYI, thought i'd chime in since i've done so many tests.
    rookie reserves is a Salary cap thing, it is to make sure your rookie salary and annual prorated bonus can fit under the salary cap after all the free agent signings. The funds management and salary cap management are two separate things that need to be managed independently almost.

    The rookie bonuses on the entire contract value are taken out of funds immediately as if it were either a re-signed free agent of yours or if you sign a guy in free agency.

    I've tested multiple times. The 1st pick typically has a bonus close to $20 million. A 5th pick is probably at $15 million in bonuses, a top 15 can be ~$10million, The last pick of the draft is about $6 million. This is assumed 7 draft picks, the more you have, the more the bonus. The less you have, the less the bonus, naturally.

    If the solution is to trade high priced players for picks to "save" money and you have low amount of funds heading into the offseason, it is not a good solution. Unless you trade your 1/2nd round picks for later round picks.
     
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  14. NeuroticTruth

    NeuroticTruth dont know , dont care

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    I had this conversation last night with BobJr. I think bonuses in general are done differently this year. When I signed Cameron Jordan to his 5 year deal, it paid his entire bonus of his contract up front. While that is "guaranteed" money, in my mind it doesnt all get paid up front. Hence why in negotiations it was laid out as 2M per year in bonuses, yet it took away his entire bonus from my funds up front. I asked the same question as you did last night HAL9100. In theory now I should be able to cut him without paying a dime, but it still shows a penalty of his bonus if I try to cut him.

    Personally, I think something is a little flukey there this year.
     
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  15. G_T_G

    G_T_G BEAR DOWN

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    Starting to feel like I need to hire an accountant to run my madden team.
     
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  16. Kidofcrash23

    Kidofcrash23 Walk On

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    I can say with almost all certainty that the mechanic is the same in last years game and this years game. The bonus was taken out upfront at the time of signing. The bonus is prorated for salary cap purposes. I saw the same problems last year with the raiders, but this year the logic is harder to make money so it impacts more teams.
     
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  17. NeuroticTruth

    NeuroticTruth dont know , dont care

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    This literally makes zero sense to me, although it may be more of an NFL rule issue than anything if thats true. If I'm paying all of your bonus up front, I dont see why / how it affects anything else down the road.

    I dont have the game to test it, but I just dont feel like you paid the full bonus up front last year; although I may be (and probably am) wrong.
     
  18. thirdalarm

    thirdalarm Walk On

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    In all the practice CFM that I have experimented with this is true. Its is a double fund penalty of sort, But the penalty seems to go down every year that passes on the contract. But its a bit of a cluster.
     
  19. HAL9100

    HAL9100 TSO's Resident Antagonist

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    So after looking it up, the way it works in the NFL is that bonuses are paid up front immediately but their application to the salary cap is prorated over the length of the contract. So if a player is cut or traded, the bonus money "remaining" is applied as a penalty to the salary cap but they aren't paid again through your available funds.

    So I would say it sounds like this is working accurately. I don't remember it working this way in Madden 25 but I didn't play that much of it last year either.
     
  20. Kidofcrash23

    Kidofcrash23 Walk On

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    Here is an an example of how contracts count towards the cap using a real NFL player, in this case david akers.

    Salary and signing bonus (guaranteed $) are two separate things. So in this example, akers signed a 3 year deal worth $9 million in total value. His signing bonus was $1.7 million and his salary was $1.3 million, $3 million, and $ 3 million for years 1, 2, and 3. He ended up getting released after year 2. So how it counted was the following:

    year 1 $1.3 salary counted towards the cap and $566k counted towards the cap in bonuses ($1.7 million divided by 3 years)
    year 2 $3 million counted towards the cap and $566k counted towards cap.
    year 3 - released, niners did not pay $3 million in remaining salary and $566k counted towards cap because bonus amortized over the life of the contract.

    So simply, salary are paid during the year and counts toward the cap for that single year. Bonuses although received all upfront are amortized over the life of the contract and account each year for the life of the contract. Now madden is a video game, there is really no flexibility because i assume it would be difficult to implement renegotiation, voids, offsets, and other complicated contract things.

    So it is working properly and last years game worked the same way, it is just harder to earn money if you lose or have a bad market.

    http://espn.go.com/blog/nflnation/post/_/id/73449/how-do-contracts-work-glad-you-asked
     
  21. NeuroticTruth

    NeuroticTruth dont know , dont care

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    I understand how salary vs bonuses work, thats not what I'm arguing here. I'm also not sure why you keep referencing it vs it being harder to earn money, they're two separate issues.

    I guess what I'm questioning is why if you pay the bonuses up front do you still take a cap penalty hit when you try to release the player? It never worked that way before.
     
  22. HAL9100

    HAL9100 TSO's Resident Antagonist

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    How the bonus money applies to the salary cap is different than how the players receive the money. So while the player gets the money immediately, the NFL views it as money spread evenly across the length of the contract. I assume that this prevents teams from abusing the salary cap by paying an entire contract in one year and getting the player essentially free from the cap in future years.
     
  23. Kidofcrash23

    Kidofcrash23 Walk On

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    To answer your question, yes, you do take the cap penalty for the bonus if you release a player during the term of the contract. In the example i linked, it is detailing that. The hit you take in terms of cap penalty will be the annual amortized amount of the bonus times the remaining years left. So using david akers example, he completed two years of work for the niners, he was released after year 2 and had 1 year remaining. So the salary does not count as a cap penalty, only the remaining amortized amount of the bonus of $566k. The game accounts essentially the same way

    Yes, it did work that way and it worked that way last year in madden. Perhaps it did not work for you because maybe you were releasing players with no bonus money at all.

    If you didn't trade or sell m25, pull it up, release a guy with a bonus and see how it works. I am guessing it will be pretty similar to what is detailed in the link.
     
  24. NeuroticTruth

    NeuroticTruth dont know , dont care

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    Again, I'm sure its more of an NFL rules issue. I understand it being prorated to the remaining years of the contract for cap purposes, but I should be able to release a player without a penalty if the entire bonus is paid up front. Imo, the "prorated" cap hit should be treated as salary than in future years. Seems silly to give a guy $10M up front, and then have to take a $10M cap hit to release him (essentially costing you $20M).
     
  25. HAL9100

    HAL9100 TSO's Resident Antagonist

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    It doesn't cost you $20 mil. Is that full $10 mil being applied the cap in season 1? No. You're paying the player $10 mil out of your available money but only $2.5 mil is being applied to the cap. So that leaves you $7.5 mil free on the cap that would otherwise be taken up.

    I think in Madden 13 uagrad90 gave MJD $120 mil over 6 years with a $60 mil bonus. So if it was all applied to the cap immediately instead of prorated over the 6 seasons, that would've made MJD cost $70 mil in year 1, but only $10 mil in years 2-6. So with the way this works, MJD gets his money but the NFL says were not going to force you to try and fit $70 under the $130 mil salary cap so just make it $20 mil every year. However, if you ever trade or cut him, then we'll apply what's remaining to your salary cap immediately.
     

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