Explaining the Kerney, Grant, Terrill, & Babs Restructuring

Many of us out in Seahawk land tonight are just tickled neon green that Lofa has been signed to a long term deal. It has also been noted by the front office that several players had to restructure to help get the deal done.

I thought I would help explain. First off let me say that I am only taking educated guesses here. I have no idea what the team and player worked out, and probably never will, but by looking at the contract info we do have, I feel pretty confident making assumptions.

To continue.....

To begin let me explain there are two types of bonuses. A roster bonus and a signing bonus. For our purposes all you have to understand is that a roster bonus counts all in one year and a signing bonus, while paid upfront, is prorated over a maximum of five years against the cap. I know this can be confusing, but hopefully that gives you a good enough idea to follow along.

First lets look at Deon Grant. Surprisingly I have talked about Deon restructuring before.

Deon had a 5 mil roster bonus due this year. By converting this to a signing bonus, he still gets the money up front, but the team lowers their cap obligation from 7.647 down to 3.647, saving 4 million.

Patrick Kerney also had a 5 mil roster bonus due. He also has a 3 mil roster bonus next year. If we assume he just restructured this years bonus into a signing bonus, then that would lower the cap obligation from 7.417 mil, down to 3.417 million. Again 4 mil in savings.

In both these cases, the Hawks are now counting these bonuses as 1 million/year over the last 5 yrs of these deals.

With Babs, I am guessing that the 1.5 mil bonus he was scheduled to receive was a roster bonus as well. I already had it labeled as a signing bonus. This could account for why my figure was off a little from John Clayton's. The bonus is 1.5 mil, and if was changed from a roster bonus to a signing bonus, and thus prorated, it saves 1.2 million, counting only 300k/year over the next 5 yrs.

As you can see, it helps that these are fairly new contracts because they have the 5 yrs left. 5 yrs is the max length to prorate a bonus. However, these players become a little tougher to cut early because this is how the bonus comes back and causes dead money.

Terrill is a little odd. He has no bonus and is only scheduled to make 900K. He is scheduled to make 1.15 each of the next two years. It is possible they gave him some money up front and lowered his base salary to the vet minimum. It would only save a couple 100k, but maybe they felt they needed to. This is the one out of the four they may have been creative with. ]

Either way, all these guys have earned and are getting their money, but to go through the hassle of handling all this so Lofa could get what he deserves still shows a lot.