Running Back Money

I mentioned that I was preparing this earlier in the week. Many of you know I am in a graduate business program. Here is a look at the running back picture from a fiscal point of view.

Remember, to fans it is just cap space and signing bonuses, but to Paul Allen, this money really comes out of his very large bank account. I am sure he is in no danger of going broke, but still, a man like that doesn't get to where he is by wasting resources.

If you would like to see how and where the money is going.......

First take a look at this chart, and I will do my best to explain it...


What you can see here is the actual amounts of money being paid out to running backs over a 5 year period. The money being paid is what the team actually has to dispense if the player is on the team is on the top line of each back breakdown. This is coupled with their bonus amounts and the year paid in the first column.

The first thing you can see is that over the next 5 years, the Hawks are now committed to 8.74 million in salary less with the new backs than if they stuck with Shaun. this is somewhat offset by the bonuses just paid, however you will see, the team will probably get these savings back. This by itself is interesting, but really would only matter on a balance sheet. All of us know that Shaun wasn't going to make it all the way to 2012. So lets look at this year by year.

The first thing I have done is highlight what I am calling the break even year of the deal in yellow. In these years the Hawks can release the player at any time and not only eliminate the base salaries, but also save money against the salary cap. That is usually when a team will consider releasing someone. As you can see within 2 years Jones could be gone and in 3 years it makes the most sense for TJ.

Another reason that it is likely they will last this long, is that the Hawks actually are spending more actual cash in the next two years than they would have with Shaun. This is because the signing bonuses are paid all up front. In TJ's case, they pay him half this year and half next year. So, in essence, the Hawks are willing to pay 3.7 million over the next two years, to save close to 9 million if all the deals go their length.

On top of this, the team saves cap space. So one could say they are paying the bonuses to by back 1.75 million of cap space this year. That is assuming a June 1st cut. This means that cap room will take a hit next year, as the new backs cost 2 million more than the cap savings.

Stallz suggested this earlier....with the cap space the Hawks have left, and the fact that it would only be 125K hit, they may choose to release him out right and push the money to next year. If that is the case, they would pay the extra 3.7 million to create 7.8 million next year. This is clearly the best value, as long as the production on the field is equal.

Finally, lets look at the new running backs under the scenario that they get cut early. The Hawks can actually shave another 9 million in salary, and 5.4 mil in cap space by releasing Jones and Duckett once they clear the break even point. This counters the money the spent up front in bonuses and hands the team back that original 9 million they saved on the base salaries.

Shaun's contract, if he would have made it to the end, would have counted 33.2 million till 2012 (ouch!). By cutting new backs after the contracts "break even", Paul Allen saves 18 million in salary. He had to pay 8 million in signing bonuses though. The saving realized work out to 10 million in real hard cash. That ain't chump change. If the backs are on the roster past the break even year, then I am sure the Hawks will forgo the savings because obviously the players are preforming.

Also, the Hawks will realize significant cap savings, in 4 out of 5 of the years, no matter when or how Shaun is released. Which is good for the football side of the equation.

Finally, consider that the Hawks have been able to add TWO backs and still realize these savings and it looks pretty impressive. The NFL has changed, two back systems are in vogue. Jim Mora was one of the first to employ an effective multi back system several years ago and lead the league in rushing. That could be what the Hawks are thinking. Clearly, the idea here was two backs for less than the price of one.

Now lets juts hope that the production on the field is greater than what Hawk fans have seen the last few years. That would be the real gain.