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Re: Financial (Salary Cap) Issues Caused by Trades

By jgcruz
5/21/2018 1:29 pm
This rule applies every time you trade a player that is paid a bonus stretching out over 1 or more future seasons: When you trade that player, the total amount of his bonuses after the current season (less the amount of the player's salary next season) is subtracted from next season's salary cap space.

For example, let's look at Houston's SS Keith Deason (its 2nd rd pick). Deason is signed for 4 years. In years 2 - 4, he is due to be paid a total of about $4.6 million in bonus money. If he is traded (or cut) this season, his ENTIRE bonus over the life of his contract after this season, i.e., about $4.6 million, less his $2.2 million salary for next season, will be subtracted from Houston's salary cap space for next season. Therefore, the net effect on Houston's salary cap space for next season for either trading or cutting Deason this season is a reduction in cap space of $2.4M ($4.6-$2.2=$2.4).

So, if in any one season you trade or cut a lot of players who have a high amount of future bonuses structured into their contracts, you are likely eating away at the following season's salary cap. One way to offset this is to trade for players who have relatively low salaries (and/or no bonuses) which you have to pay in the following season.

Trading players with high future bonuses for draft choices might also work to a degree, but only if you have a high enough future salary cap to sign the drafted players. Of course, you can trade next season's draft choices for future years' draft. But remember, anytime you're forced to make a roster move or trade a draft choice due to salary cap issues, someone can take advantage of you.

Last edited at 5/21/2018 1:35 pm