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Monday, January 07, 2013

Contract situations

With the Steelers roughly 13 or so million dollars over next year's salary cap of $120 or so million, they will have some juggling to do to get under the cap and still be able to resign potential free agents, offer tenders to their restricted and exclusive rights free agents and sign their rookie class.

Here are the top 10 salaries headed into next year:

                                Cap Number
Ben Roethlisberger   $19.6  
LaMarr Woodley     $13.2
Lawrence Timmons  $11.16
Troy Polamalu          $10.1
James Harrison         $10.03
Ike Taylor                $9.45
Heath Miller             $7.95
Willie Colon             $7.65
Antonio Brown        $6.2
Ryan Clark              $4.75

As you can see, the top of the pay scale tips heavily toward the defense - particularly in favor of the linebackers. That group of 10 players also accounts for roughly $100 million of the team's salary cap for 2013, leaving just $20 million to fill out the rest of the roster.

Now, there is some wiggle room there, such as turning base salary into signing bonus - something the Steelers have done quite a bit of in the past. The only problem with that is you have to be sure the player is going to be part of your plans in future seasons because it increases their cap hit down the road.

For example, a simple restructure for Roethlisberger would make sense, since you could turn his base salary into bonus money and save $7.1 million.

For a player such as Harrison, however, the savings would only be $2.8 million. And with Harrison at 35, that's probably not the way to go.

Just doing a simple restructure on all of their top 10 contracts - at least the ones they would be able to do so with - and the Steelers could create nearly $36 million in cap space.

But, that includes restructuring Harrison, Polamalu and Taylor - Clark can't be done since he is only signed through next season.

Take those three out of the equation, and you're looking at $27.2 million in savings, plenty enough wiggle room to do everything they need in the offseason without releasing any veterans.


Anonymous said...

Why not just cut Ike or have him take a pay cut. $9.5 mill is huge cap hit for guy that has never even sniffed a pro bowl. He's an average CB at best who is 30+. Seriously, is he really worth $9.5 mill? Use the cash to re-sign K Lewis. This team needs stop overpaying aging vets.

Dale Lolley said...

Did you see the pass defense down the stretch without Ike? Gave up their first 300-yard game in three seasons. Yeah, that's a great idea.

I like Keenan Lewis, but not at the expense of Ike. They are not going to cut Ike.

Dale Lolley said...

I might add that cutting him outright wouldn't save much, $2.5 million.

Lance said...

Some fans love the game and the Steelers, but just do not know football. Folks that want Ike gone, clearly do not know the football or the position.

DAVE said...

Can we just have Eddie Lacy? Please?

Anonymous said...

A key factor is that the salary cap is projected to explode upwards in 2014 when the new broadcast deal kicks in. That allows the team to cut players after June 1st this off season, allowing the bulk of the cap hit to defer to '14. My top candidate for that honor goes to Willie Colon. Sure, he would be expensive because we have already restructured him once (a consequence of making that mistake once) but he spends too much time on the sideline - time to cut bait and move on.

bytor said...

Ike, Heath, Antonio and Ryan are the only ones on that list who "earned" their cap number this past year. I realize Ben's value to the team and his status in the league but almost $20million? No wonder we are in this situation.

Anonymous said...

Unfortunately anon, it is not expected to explode with the infusion of new TV money. For whatever reason, the cap is expected to remain somewhat flat thru 2015. Tho no one can really explain why, and I haven't the burning desire to comb thru the CBA to figure it out for myself. All I know is the 2 proposals floated by the League prior to finally being ratified by the Union projected a rolled back flat cap for the first 2 years of the new CBA of around ~$120M (which is what happened), before jumping to ~$140M in 2013 (which nobody now is expecting to happen). And this was before the TV deals (which kick in in 2014). Nobody can explain what happened between those League proposals and what the Players eventually settled on. Or why the new TV money won't jumpstart the cap in 2014. Hard to believe that instead of meeting somewhere in the middle, the Players signed off on something far less than what the League had been proposing for the several months prior.

And with the way Colbert has managed the cap, seems he was banking on cap growth that never materialized. And as a result, capwise the Steelers have effectively rolled back the clock to the days of 3 Rivers. When the complaint was they couldn't remain competitive in their antiquated stadium and couldn't attract FAs let alone keep their own. Competively, those Steelers were slaves to their own circumstances. As they are now. Tho that previous era got themselves out by building Heinz Field (while doing a pretty good job of backfilling lost talent thru the draft). Now? All they can hope to do is tread water (while borrowing from future caps) until the cap takes off.

Dale Lolley said...

My theory on the cap is that the owners and union agreed to keep it level until the out of control rookie salaries ran their course. It's been a couple of seasons now since they've had the rookie cap. In another year or two, all of the original ridiculous rookie salaries will have played out.

As for the Steelers' cap situation, they're not exactly in a Three Rivers era situation. Art Rooney is now able to write those big bonus checks each spring to turn salary into bonus. He'll probably be writing about $20 million in those this year to get this team under with some flexibility. Not sure they could have done that in the Three Rivers days

Anonymous said...

Yeah, dunno bout that. That negotiation was too contentious for the Union to decide to eat $20-$30m a year until a dozen or so rookie deals from past years clear the books. Less than doubtful.

Not sure bout your other thought either. Maybe, but that was before Rooney borrowed against his equity to buy out his bros to get the required % of ownership. Went from ~10% debt to ~25% (that's roughly another $140-150m in additional debt)contemporaneous with that buyout. Doubt that was a cowinkidink. Bad timing, but there it is. One of 3 teams with neg operating income last year according to Forbes, so obviously cash flow ain't great right now. Any of that huge bonus money would seem to have to funnel from the ownership groups outside holdings. Dunno, maybe his new partners can/are helping out with their deep pockets, but there'd have to be some form of quid pro quo, and not philanthropy.

Even still, they're hard up against it and will be doing well to get under and keep a few of their own. Under 3 Rivers, the cap wasn't the problem, so much as cash flow. But the results of those problems, then and now, are the same.

marc said...

please don't try to infer you have some type of extensive knowledge of the steelers/rooney's internal financial workings based on the limited information made available.

Anonymous said...

Not 'inferring' anything. Just opening it up for discussion. Rooney's depth went up the exact amount at the exact time he had to buy out the necessary portion from his brothers. That 'implies' Rooney borrowed against his existing equity to make that transaction. And last year they had a negative operating income. Both directly connected to cash flow, something Lolley suggests is in abundance in the Heinz Field Era. The point I'm trying to make is they are going to lose some players they would otherwise prefer to keep if their circumstances were different. Same as it was before Heinz Field.

One thing I can infer, however, is that you don't really know the meaning of the word.

marc said...

if you had a clue you would understand the finances of a private company that is family owned are often commingled with other companies/enterprises they also own. having a negative cash flow means absolutely nothing in terms of the financial capabilities of the rooneys or organization to make necessary bonus payments.

once again, please stop trying to pretend you have any idea what they can afford based on such little information available.

Jennifer said...

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