FanPost

Cap Dollars and Sense : Restructuring J-Jo

Since I've still got cap on the brain tonight I figure I might as well do one more of these.

While it is unlikely, what if the Texans went to Joseph with the same intention they gave Andre about restructuring his deal. Lets forget trying to guess if he'd be willing, and worry more about the question of whether it would actually save the Texans any money.

Last year, Joseph signed a 5 year, 48.75 million dollar deal, with 12.5 in signing bonus form, and an additional 23.5 guaranteed according to the following scale.

Year 1 (2011) - 5.5M Base, 2.5M Signing Bonus = 8M Cap Hit

Year 2 (2012) - 7.25M Base, 2.5M Signing Bonus = 9.75M Cap Hit

Year 3 (2013) - 7.5M Base, 2.5M Signing Bonus = 10M Cap Hit

Year 4 (2014) - 7.5M Base, 2.5M Signing Bonus = 10M Cap Hit

Year 5 (2015) - 8.5M Base, 2.5M Signing Bonus = 11M Cap Hit

Year 1 was 2011, so lets focus on Year 2. For the simplest definition, lets assume we are doing an Andre-like restructure. The base salary, minus veteran minimum salary, would be turned into a signing bonus and pro-rated over the remaining 4 years. The only real info I could find shows the 2012 veteran minimum with a player of Joseph's experience is $700,000. We will use that figure but I will admit it could be on the low side. Since we know the base salary, we can calculate the new signing bonus.

7.25M - 700K = 6.55M

Because we are not adding any extra years to Joseph's contract, the signing bonus will be spread out over the remaining 4 years at an equal value.

6.55M / 4 = 1.64M (Rounded)

A key to keep in mind during a restructure/extension is you must continue to pay the previous signing bonus at the same prorated amount. This would explain why we only did the math of the base salary. You need to keep this in mind when doing the final cap hit calculation, since we now have all the numbers.

Year 2 (2012) - 700K Base Salary + 1.64M Signing Bonus + 2.5 Original Signing Bonus = 4.84M

9.75 Original Cap Hit - 4.84M New Cap HIt = 4.91M Cap Saving

The math actually shows a near $5 million dollar savings in 2012, which could be useful money. You do have to remember that you would be adding 1.64M to the 2013/2015 cap numbers, although looking at the amount of guaranteed money and the potential cap hit in 2015 compared to Joseph's age, I wouldn't be suprised to see the Texans cut him that far into the future.

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