Giants borrow $7.5 million from future cap

[MightyGiants]

https://x.com/FieldYates/status/1770815341867790822?s=20

[Jclayton92]

Gotta expect the Thomas restructure to be around the corner.

[Jolly Blue Giant]

A necessary evil in order to sign our draftees and have some cap room leftover to pick up FAs during the season as injuries pile up. Or maybe they are eye-balling a FA they wish to sign before the draft 

[londonblue]

I think your phrasing is the wrong way to look at Mighty.

The Dex and AT contracts were always structured in a way that effectively planned for this. The above expected cap increase has only made it more obvious as even the increased future cap hits are still in line with the new market. Dex's contract is also clearly set up to renegotiate and extend prior to 2026 season.

Thomas's contract is also an easy adjust now but with his renegotiation window a year later before 2027 season. His intermittent injuries make him a slightly higher risk restructure and based on today's information he projects to be a bit less likely to get extended in 2027.

Why now is my Q? If we are just doing VSB stuff we could have done something smaller on a different contract and waited until draft time to rework Dex (see if Waller retires). Does it suggest we still have one FA signing for real $ in us?

[MightyGiants]

I think your phrasing is the wrong way to look at Mighty.

The Dex and AT contracts were always structured in a way that effectively planned for this. The above expected cap increase has only made it more obvious as even the increased future cap hits are still in line with the new market. Dex's contract is also clearly set up to renegotiate and extend prior to 2026 season.

Thomas's contract is also an easy adjust now but with his renegotiation window a year later before 2027 season. His intermittent injuries make him a slightly higher risk restructure and based on today's information he projects to be a bit less likely to get extended in 2027.

Why now is my Q? If we are just doing VSB stuff we could have done something smaller on a different contract and waited until draft time to rework Dex (see if Waller retires). Does it suggest we still have one FA signing for real $ in us?

Neal,

I am sorry, but I have to strongly disagree with you on this issue.   If anything, I would argue claims that restructures are "freeing up cap space" are misleading claims.   

The purpose of any restructure (and despite the persistent and prevalent myth, those restructures are independent of the actual player and contract picked to rework) is to borrow money from future cap years to use now.

Why now is my Q?

It's hard to say; perhaps the Giants are planning (as you suggest) on adding another veteran at above a vet minimum contract.  Schoen has a history of waiting until the last moment to free up space when needed.  My guesses he does that so he can plead cap poverty when he negotiates.

[uconnjack8]

I like the title and see it the same way Rich. I will say I am happy it was done with a player that I think will still be playing at a high level when his cap hot goes up from this.

[MightyGiants]

I like the title and see it the same way Rich. I will say I am happy it was done with a player that I think will still be playing at a high level when his cap hot goes up from this.

While there is a convenience factor involved with tying the borrowing from a player likely to stick around (if you cut them you don't have to make other moves to cover the needed borrowing), in the end, the only thing that really matters is how much is borrowed not who was used to borrow the money.

[londonblue]

Mighty:

No money moves in these restructures. Nor does cap move from one year to another. They do NOT "borrow from" future cap. They delay the cap accounting of guaranteed expenditure into future years consuming more of the future cap then to use less of our current cap now. It is not a semantic difference as it impacts how you structure contracts.

It also does not create issues unless it is done excessively and even then every year the worst abuser, New Orleans, get themselves under the cap. It is only ever even a theoretical issue if you are projected to be very cap constrained in the future. This is not a problem we currently have.

The AT and Dex contracts were structured specifically with restructures in mind. Schoen's preference for bigger contracts to be generally flat after year one is to allow him to do these restructures without creating excessive dead cap time bombs. It also avoids having to insert artificial balloon years or void years. He had to use these a bit with inherited contracts as he cleaned up the cap over the last two years but he is on record as not liking it.

The Lawrence and Thomas contracts are also structured to be renegotiated before they expire. That should be your expectation in 2026 and 2027 respectively. It will not be reactive to the cap situation when it happens (player health and form permitting), though it should help the cap, it will be part of a projected five year plan.

We had less cap this year in theory because of the Jones restructure post signing last year but it did not matter as Schoen built the wriggle room into Dex, AT to offset. So it will be next year with the possible Jones out and one or more of Burns, Runyan, Singletary being reworkable. The inflating cap also helps but the possibility of another Covid style shock keeps Schoen more toward the cautious end of GM practice on this which is good IMO.

If we find ourselves struggling for cap in eg 2026 it will be because Schoen has thrown around more Jones/Burns pay days next year not AT or Dex restructures this year. We get far more het up about these things than we should tbh.

Apologies for me going full accounting nerd here but a lot of the way this is spoken about by media and fans is unhelpful.

Neil

[MightyGiants]

Mighty:

No money moves in these restructures. Nor does cap move from one year to another. They do NOT "borrow from" future cap. They delay the cap accounting of guaranteed expenditure into future years consuming more of the future cap then to use less of our current cap now. It is not a semantic difference as it impacts how you structure contracts.

It also does not create issues unless it is done excessively and even then every year the worst abuser, New Orleans, get themselves under the cap. It is only ever even a theoretical issue if you are projected to be very cap constrained in the future. This is not a problem we currently have.

The AT and Dex contracts were structured specifically with restructures in mind. Schoen's preference for bigger contracts to be generally flat after year one is to allow him to do these restructures without creating excessive dead cap time bombs. It also avoids having to insert artificial balloon years or void years. He had to use these a bit with inherited contracts as he cleaned up the cap over the last two years but he is on record as not liking it.

The Lawrence and Thomas contracts are also structured to be renegotiated before they expire. That should be your expectation in 2026 and 2027 respectively. It will not be reactive to the cap situation when it happens (player health and form permitting), though it should help the cap, it will be part of a projected five year plan.

We had less cap this year in theory because of the Jones restructure post signing last year but it did not matter as Schoen built the wriggle room into Dex, AT to offset. So it will be next year with the possible Jones out and one or more of Burns, Runyan, Singletary being reworkable. The inflating cap also helps but the possibility of another Covid style shock keeps Schoen more toward the cautious end of GM practice on this which is good IMO.

If we find ourselves struggling for cap in eg 2026 it will be because Schoen has thrown around more Jones/Burns pay days next year not AT or Dex restructures this year. We get far more het up about these things than we should tbh.

Apologies for me going full accounting nerd here but a lot of the way this is spoken about by media and fans is unhelpful.

Neil

Neal,

I have been studying the salary cap since 2007.  I have a strong math background as an engineer (I was even tapped for my High School math team).   So, this is an area that I am very comfortable working in.

A flat structure for the salary cap hits is ideal when it comes to structuring a player's salary cap hits over the life of a contract.   A close second would be salary cap hits that go up proportionate to the anticipated increase in the salary cap (which can't be predicted with any sort of precision).

The salary cap may seem like an illusion, but that is really only short-term. Long-term, it is very much real. Just look at the beating the Cowboys, Dolphins, and Bills are taking in free agency. 

Extra fake years added on to a contract to spread out the cap hit (purely from a mathematical/cap perspective) is no different than reworking any player's contract.  It is all about borrowing money from future cap to pay the salary cap for the current season.

Even before they reworked DJ's contract, it was already structured to borrow future cap dollars, as the cap hit in year one was significantly less than the following seasons.

The Saints just kicked the cap can down the road as they are over $60 million over an anticipated $260 million 2025 NFL cap and that's not even counting the contracts of this year's (and next year's) draft picks.

Now, there is a concept called "cash over cap," where if a team has enough bonuses, the owner is paying a salary in excess (and sometimes well in excess) of the actual salary cap.  Not every owner is willing to go down that road.

So the reality is that whenever a contract is reworked, a team is essentially taking money from future cap years to increase what they can spend in the current year.   The only time cap space is truly freed up is when a player is cut (teams save whatever non-guaranteed money is owed them) or if a player agrees to take a pay cut.  Every other means, from back-loaded contracts to converting bonuses to adding dummy years, all serve the same purpose, which is to borrow from the cap space available in the future.

With the exception of the Covid years, the cap has consistently gone up so to a degree teams can keep kicking the can down the road (at least to a degree) but the reality is there are limits and teams eventually find themselves in cap hell.

The things that help a team cap-wise are QBs (or other high-priced positions) on rookie contracts.  It's also another reason against drafting a RB (or other lesser paid position) high in round one as their rookie contracts can be as high or higher than the contracts for veterans so you lose a big benefit.

Sometimes teams will "pre-spend" anticipating operating with a QB on a rookie contract.  In the case of the Giants, they really can't because they had Jones this year and will count $22 million on the books in 2025 (assuming he doesn't get hurt and fail the physical) for 2026 (Jones has injury guarantees for 2026).

Right now, the Giants have 3 of the most expensive positions under veteran contracts in QB, LT, and Edge.  Dex isn't that far behind, as DT salaries have been skyrocketing.

If the Giants don't find a replacement for Jone in 2025, this team will be cap-tight starting next season.  The Giants have the 25th most cap space for 2025 and it gets worse in 2026.

Edit to add:  One of the reasons that Schoen was able to get such a high pick for Leonard Williams was he was willing to swallow $10 million of cap last year (previous money spent matters because teams can carry cap surplus forward).  I suspect the Seahawks would have not made that trade if they knew the salary cap was going to increase os much this season.  With the big increase Schoen's trade looks even better.