Tsk, Tsk, Tsk...

[Diesel]

For years the standard operating procedure for NBA GM's when signing players to long-term deals has been to almost automatically give an annual raise, often the maximum permissible by the collective bargaining agreement. Hence, when a team re-signs one of its own free agents (with one or two largely insignificant exceptions) to a long-term contract, the raise is 10.5 percent annually of the first year’s salary in the deal; for free agents signed from other teams the maximum, annual raise is 8 percent of the first year’s salary in the deal. It is built into the NBA culture. Owners like to defer payment until the future, and players like to get raises. So it is that the rookie contract structure for first round draft picks is built around significant annual raises.

For example, if a team signs its own player, say the Bulls re-signing Luol Deng, to a 5-year deal starting at $10 million per year, it can give a $1,050,000 raise every year of the deal. After five years, with four years of maximum raises, instead of being a $50 million deal, it is a $60,500,000 deal. The last year of the contract has a salary of $14,200,000.

For a free agent signed away from another team, say the Hawks (who are under the cap) attempting to sign the restricted free agent Deng this summer, they could offer a first year salary of $10 million which would allow for raises of $800,000 every year in a long-term deal. After five years, instead of being a $50 million contract, it is a $58 million contract. The last year of the deal has a salary of $13,200,000.

I think the time has come for NBA teams to discontinue this practice of giving maximum annual raises as a matter or course. In this article I address this prevalent practice of giving annual raises in NBA contracts. In my view this practice is often counterproductive strategically. Instead, savvy teams should, and I believe will, begin to turn to the practice of frontloading.

Don’t get me wrong: there are times when issuing these maximum annual raises make sense, such as when a team only has so much cap space to utilize so it is limited in how much the first year salary can be, and it needs to make the most attractive offer possible. Or when a team has a superstar like LeBron James or Dwight Howard or Kevin Garnett, and you pay the maximum permitted by law no questions asked.

Likewise, there are times strategically when structuring salaries with maximum annual raises makes sense for teams: in particular, when a team is already well below the cap and wishes to remain there so it can sign a free agent or trade for an expensive veteran with a large contract, like Charlotte did with Jason Richardson this past off-season. In that case paying the least amount now and deferring salary creates more available cap space to play with. But most teams are not in this highly desirable situation, and by always giving maximum annual raises in contracts, they make it much more difficult to ever get there without shedding valuable players.

Likewise, pushing more salary off into the future can help teams avoid the dreaded luxury tax or at least push it off into the future.

But these instances only apply to a minority of teams in the NBA today.

Yet scroll through the team salary lists on the Internet, and almost every team in the league has player after player with annual increases built into their contracts when such increases were not necessary to get the deal done and when such contract structures served no strategic purpose. There were alternatives that could have satisfied the player and put the team in a much better position with regard to the salary cap.

These teams need to frontload.

The principle behind frontloading is simple. Unless teams are absolutely forced to give annual raises, in most strategic situations it would be more prudent for teams to pay more early in the contract and to stop giving raises that clobber a team’s salary cap position by the last two or three years of the deal. If you look at the example above, you can see how much larger the salary cap hit is in the 5th year of the deal if maximum raises are given.

In fact, when a team is signing its own player – if it is not a max contract superstar -- or if it has cap room, I think a compelling argument can be made that a smart team will actually reverse the process and give the largest salary in the first year and then have annual maximum decreases in the salary. According to the NBA collective bargaining agreement, a contract can be decreased by as much as it can be increased annually. So when a team re-signs its own player, it can lower the annual salary by as much as 10.5 percent based off the first year of the salary. When a team signs a player from another team, it can lower the annual salary by as much as 8 percent off the first year on the contract. That is what I mean by frontloading.

I know, you are probably asking, “Hey, why would any player accept an annual pay cut?” The reason is that they are not taking a pay cut because they are going to make the same amount of money, only they will get paid much more of it at the beginning of the contract. Any person in business or economics will tell you that is a winning proposition.

So, in the example I gave above, imagine if the Bulls said to Luol Deng, “We agree to give you a five-year $60,000,000 deal, only we want to restructure it so you get much more of the money at the front end.” So the new contract would pay Deng $15,000,000 the first year and have annual $1,575,000 decreases in the salary. In the fifth year of the deal, the Bulls would pay Deng $8,700,000. The difference in the cap hit in the fifth year between this approach and the classic maximum-raise approach is a whopping $5,500,000.

The player clearly wins. Deng can take that extra money he gets early in the contract, invest it, and the total amount he will make from the deal after five years will be much more than in the standard deal. In fact, teams will be able to negotiate down the first-year salary because getting the money at the front of the deal is such an advantage. This is standard practice in business.

There are also very distinct benefits for the teams. First, teams will be able keep their long-term position vis-a-vis the salary cap much healthier. In the near term the team pays more and may have to pay the luxury tax in some cases, but a few years down the road the team will have far more cap space to use for free agents. It is worth noting that Chicago is pioneering the movement to frontload long-term deals, doing so with the recent Ben Wallace, Kirk Hinrich, and Andres Nocioni contracts. The Bulls pay more now, but they are still not paying a luxury tax, and they are going to have greater flexibility and a lower cap figure in 2010 and beyond. I assume they will do the same thing with Deng and Ben Gordon if they are able to resign them. Come 2012, save five million here and three million there a bunch of times and pretty soon you are talking real cap space, enough to afford a significant free agent. And that might be enough to win a team a title, or at least make it much better.

With frontloading, the era of NBA teams having many mediocre or worse players with massive long-term contracts grown mountainous due to huge annual raises making them all but untradeable except as salary dumps: Ratliff, LaFrentz, Szczerbiak, Miles, Walker, seemingly half the Knicks, the list goes on and on – will slowly fade into the past. That is as it should be: the NBA will pay as much or more in salary only it will now go to players who deserve it.

Second, teams will find it easier to get players to accept a provision that gives the team an option to drop the final year of the contract. It is not going to always be possible to get players to agree to let teams have an option to end the contract with a season to go, but players will be more willing to accept this with frontloaded deals because they will have gotten the lion’s share of their money before then. If a team exercises its option, the player has gotten most of the money and is then free to sign with another team. The only catch for the team is that a team option cannot be put into the contract unless the salary in the final season is the same or greater than the salary in the preceding year.

If teams are able to get a contract to include the team’s option to a final year in a five or six year contract, it can then dump players who have become unproductive without having to work a contract buy-out and have the contract count against their salary cap for the final year of the contract. It also makes it less expensive to work out a buy-out in the year or two before the option if the player has really hit the skids. And the cherry on the sundae is that they get the player off their team. These guys sometimes become locker room cancers.

In certain scenarios, where the frontloading is especially attractive and the player has few alternatives, teams may even be able to get the player to agree to have the final two years non-guaranteed. It will probably require a team to overpay a player beyond merely frontloading in order to get the right to have the last two years of a five or six year deal non-guaranteed. In this case, unlike a team option, the salary can continue to be decreased. This is a dream scenario for a team because it makes it possible to dump players or trade them easily since other teams can dump them. Or, if they are playing well, keep them through the contract and get them cheap at the back-end.

Players have resisted non-guaranteed years in contracts, for self-evident reasons, but with frontloading and a slight bump in initial salary, it can get back on the table. The only player I can locate with such an arrangement presently is Antoine Walker, who was forced to accept it because of medical problems that emerged after he signed his six-year deal with Miami in 2005. Walker wisely preferred to let the last two seasons of the deal be non-guaranteed rather than jeopardize the first four years of a deal that made him among the most overpaid players in the NBA. With frontloading, Walker’s exception could be more prevalent.

Third, frontloading long-term contracts makes it much easier to move players later in their contracts. Their salaries are simply much lower which makes them easier to trade. If a player is a young and emerging all-star, like, say Luol Deng, toward the end of a front-loaded contract at age 25 or 26 he might be relatively cheap at $9 million or $10 million per year, and many more teams could compete for him if the Bulls decided for whatever reason to put him on the market. With a traditional maximum raise contract, Deng’s salary would be $14 million by the last year and the market would be thinner, and his trade value would be less.

There is one downside, a mighty one at that, for a team that frontloads its long-term contracts in the manner I suggest. The team has to pay more salary in the near-term, and for many teams to do this might put them over the luxury tax threshold. Then they will have to pay, in effect, double when they take on additional salary to frontload contracts. This is the main drawback to the plan as far as I can see. Frontloading is the strategic choice of teams with especially wealthy owners, or visionary owners with patience and a commitment to win over the long haul. That does not include all 30 teams.

There are really three schools of owners, and each of them would have a different stance toward frontloading. Owners like Robert Sarver in Phoenix, who traded away two number one picks to get Seattle to take a good player like Kurt Thomas with a measly one year left on his deal, would never go for something like this. At the other end of the spectrum, the billionaire owners like Paul Allen and Mark Cuban should almost always frontload contracts when it is an option. Cuban may live to regret not frontloading his deals for Josh Howard and Jason Terry. Their contracts were made for frontloading. When Brandon Roy and LaMarcus Aldridge come up for extensions, Allen will be wise to frontload, except in the unlikely event they become max contract players. (Then he will probably be wondering if he has enough fingers for championship rings.) Guys like Allen and Cuban can afford to be patient. In the long run they will laugh last.

For most other owners who are in the middle, I think frontloading is a no-brainer if there are no luxury cap implications. The only reason not to frontload is if a team is already under the cap, as I noted at the outset, and frontloading would undermine its ability to sign free agents or trade for expensive players, like Charlotte did with Jason Richardson. But once a team is at or near the salary cap, frontload away!

I would argue that teams not owned by billionaires might consider the value of frontloading contracts even if there are luxury taxes to be paid. I know, that is easy for me to say; it is not my money. But it is true that, on balance, NBA teams make far more money if they go deep into the playoffs than if they go deep into the lottery. Ticket prices increase, merchandise sales go up, and local TV and radio contracts are bid much higher. Done right, frontloading is a strategy that can get a team to the top and keep it there quite a bit longer once it has gotten there. And it is worth repeating that frontloading can help teams avoid, or at least lessen, the terrible position of having several costly overpaid players on their roster who are all but untradeable.

I know this is all very abstract at present. In the second part of this article, I will discuss how frontloading contracts could benefit one specific team, the Boston Celtics , the team I follow and write about for RealGM. In part two, this theoretical discussion will be made concrete. I want to be clear about one point: frontloading contracts is a strategic device. It is not to be applied willy-nilly to all contracts. There are going to be times a team will offer contracts with maximum annual raises. Each particular team will have a different strategic situation, and the usefulness of frontloading will vary. My discussion of the Celtics will demonstrate that. But the general usefulness of frontloading applies for every team in the league. It is an idea whose time has come.

*I want to thank Larry Coon and his superb FAQ and FGump of RealGM for helping me understand how the CBA affects frontloading. Click here

read this too.

[exodus]

Why don't you point our where the words "signing bonus" show up in that article?

[exodus]

Why is JJ's salary in 09/10 greater than it will be next season?

[Diesel]

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Dude. There's a cap hit that applies to a decresing salary. A frontloaded contract Benefits the team.

Maybe you're a board full of ass tasters... I don't know. However, there's definitely a communications problem...

Because from the beginning, I have been clear in saying that you cannot erase the benefit that the team gets from frontloading the contract... and you asstasters have said that the contracts have the same cap hit as if it had standard raises. NOW the ass tasters are changing their view... Now it's three types of frontloaded contracts... What's next... a purple gorilla comes along and decides what type of frontloaded contract it is.

Ex. Tell me how my ass tastes!

I would not taunt the board about this issue, D. This is not the first time people have mentioned that there are multiple meanings for the word "frontload."

The board has mentioned multiple definitions for frontload. Yet, when I'm right, everybody acts like I'm making it up? Is there nobody here that will acknowledge that the cap hit from a frontloaded contract is applied to the cap.

Maybe there should be other terminologies used?

Because a true front-loaded contract is as I have said it was all along. It is frontloaded on the cap. If it is not applied to the cap, then what difference does it make. It's not frontloaded. That's just a standard contract with a bonus.

My... Isn't it funny that the CBA actually uses Signing bonus... and not front-loaded (for that purpose). Meaning that if you want to talk about signing bonuses, you shouldn't get them confused with front-loaded contracts.

[AHF]

Since Larry Coon is not a good enough source for this discussion, here is the relevant portion of the CBA:

Article VII, Section 3 (b) (1) - (2):

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(b) Signing Bonuses.

(1) Amounts Treated as Signing Bonuses: For purposes of determining a player’s Salary, the term “signing bonus” shall include:

(i) any amount provided for in a Player Contract that is earned upon the signing of such Contract;

(ii) any Option Buy-out Amount;

(iii) at the time of a trade of a Player Contract, any amount that, under the terms of the Contract, is earned in the form of a bonus upon the trade of the Contract; and

(iv) payments in excess of $500,000 with respect to foreign players, in accordance with Section 3(e) below.

Section 1 above defines what qualifies as a signing bonus.

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(2) Proration: Any signing bonus contained in a Player Contract shall be allocated over the number of Salary Cap Years (or over the then-current and any remaining Salary Cap Years in the case of a signing bonus described in Section 3(b)(1)(iii) above) covered by such Contract in proportion to the percentage of Base Compensation in each such Salary Cap Year that, at the time of allocation, is protected for lack of skill;

This is exactly what I have been posting from Coon's FAQ for the last week. Signing bonuses are prorated and paid out equally over the guaranteed years (i.e., protected for lack of skill) in a contract. This is the general rule applicable to all signing bonuses.

There are some clarifications for non-guaranteed contracts that are entirely consistent with the statement above.

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provided, however, that if the Player Contract provides for an Early Termination Option (“ETO”), the foregoing allocation shall be performed only over Salary Cap Years that precede the Effective Season of such ETO.

Since the ETO could end the contract, time after the ETO is not guaranteed and thus the bonus is only spread over those years preceding the ETO.

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In the event that, at the time of allocation, none of the Base Compensation provided for by a Player Contract (or none of the then-current or remaining Base Compensation in the case of a signing bonus described in Section 3(b)(1)(iii) above) is protected for lack of skill, then the entire amount of the signing bonus shall be allocated to the first Salary Cap Year of the Contract (or, in the case of a signing bonus described in Section 3(b)(1)(iii) above, the Salary Cap Year during which the player’s Contract is traded).

Again, if none of the years in a contract are protected for lack of skill - i.e., guaranteed - then the signing bonus shall be allocated to the first salary cap year of the contract. I don't think I have ever heard of a contract that isn't guaranteed in the NBA yet that includes a signing bonus but if such a deal is ever consumated, then the entire bonus would be applicable to the first year of the cap.

[exodus]

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Dude. There's a cap hit that applies to a decresing salary. A frontloaded contract Benefits the team.

Maybe you're a board full of ass tasters... I don't know. However, there's definitely a communications problem...

Because from the beginning, I have been clear in saying that you cannot erase the benefit that the team gets from frontloading the contract... and you asstasters have said that the contracts have the same cap hit as if it had standard raises. NOW the ass tasters are changing their view... Now it's three types of frontloaded contracts... What's next... a purple gorilla comes along and decides what type of frontloaded contract it is.

Ex. Tell me how my ass tastes!

I would not taunt the board about this issue, D. This is not the first time people have mentioned that there are multiple meanings for the word "frontload."

The board has mentioned multiple definitions for frontload. Yet, when I'm right, everybody acts like I'm making it up? Is there nobody here that will acknowledge that the cap hit from a frontloaded contract is applied to the cap.

Maybe there should be other terminologies used?

Because a true front-loaded contract is as I have said it was all along. It is frontloaded on the cap. If it is not applied to the cap, then what difference does it make. It's not frontloaded. That's just a standard contract with a bonus.

My... Isn't it funny that the CBA actually uses Signing bonus... and not front-loaded (for that purpose). Meaning that if you want to talk about signing bonuses, you shouldn't get them confused with front-loaded contracts.

Why is JJ's salary going up each year if his deal is like Hinrich's?

[Diesel]

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Why is JJ's salary in 09/10 greater than it will be next season?

Does JJ get a standard 10.5% raise every in his contract?

I wonder why Ex?

He did complete a SNT right?

Why doesn't it reflect in his cap hit?

Was he stupid enough to NOT take standard raises? Are you saying that JJ is stupid?

[AHF]

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Because a true front-loaded contract is as I have said it was all along. It is frontloaded on the cap.

If it is not applied to the cap, then what difference does it make. It's not frontloaded. That's just a standard contract with a bonus.

My... Isn't it funny that the CBA actually uses Signing bonus... and not front-loaded (for that purpose). Meaning that if you want to talk about signing bonuses, you shouldn't get them confused with front-loaded contracts.

Show me where the CBA uses the term frontload at all. It doesn't.

Frontload is a colloquial term for putting money in the front of a contract. In the context of RFA signings where a team is threatening to "frontload" a contract as we did with JJ and as the Sixers are threatening with Josh Smith, the term "frontload" refers to the inclusion of a signing bonus because that substantially increases the actual money paid out to the player in the first year of the contract.

There is no "frontload" in the CBA as far as I know. I really doubt you will see it in the CBA in the context of a contract with declining salary but feel free to look for it.

[exodus]

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Why is JJ's salary in 09/10 greater than it will be next season?

Does JJ get a standard 10.5% raise every in his contract?

I wonder why Ex?

He did complete a SNT right?

Why doesn't it reflect in his cap hit?

Was he stupid enough to NOT take standard raises? Are you saying that JJ is stupid?

His contract is frontloaded so why isn't his salary going down each year like Hinrichs?

[Diesel]

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Frontload is a colloquial term for putting money in the front of a contract.

In the context of RFA signings where a team is threatening to "frontload" a contract as we did with JJ and as the Sixers are threatening with Josh Smith, the term "frontload" refers to the inclusion of a signing bonus because that substantially increases the actual money paid out to the player in the first year of the contract.

Again, if the money has no effect on the cap, its' not front-loaded. Only what will have a cap effect really matters.

You guys believe right now money matters from the owners perspective? That's terrible logic. If the owners are going to pay Smoove 73 Million dollars, does it matter what they pay him out of pocket up front?? NO. The only thing that matters is the cap hit.

[RMJ]

Joe is getting paid close to what he should be making. If he made 20 million his first year

that means he's left with 50mil over 4yrs which is a little over 12 mil/yr. When you add in the annual raises it's pretty close

[exodus]

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Joe is getting paid close to what he should be making. If he made 20 million his first year

that means he's left with 50mil over 4yrs which is a little over 12 mil/yr. When you add in the annual raises it's pretty close

You aren't following the argument. Diesel has given examples of frontloaded contracts (like Hinrich and West) with declining salaries and is trying to argue that JJ's deal is the same. It isn't the same because JJ's salary is increasing.

[TheNorthCydeRises]

Scenario: 2 contracts offered to Smith, both contracts are approx 5yr - 74 to 75 million deals

- Philly: frontloaded contract starts at 11 mill the first year + a 9 mill signing bonus, and say it increases approx 12m - 13m - 14m - 15m

- Atlanta: a frontloaded contract starts at 17mill the first year, and say it declines approx 16m - 15m - 14m - 13m

Questions:

1) Which contract would be more attractive to you if you were Josh Smith?

2) If you're Atlanta, would you frontload a deal like that to entice Smith to re-sign?

[mudderfudder77]

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Frontload is a colloquial term for putting money in the front of a contract.

In the context of RFA signings where a team is threatening to "frontload" a contract as we did with JJ and as the Sixers are threatening with Josh Smith, the term "frontload" refers to the inclusion of a signing bonus because that substantially increases the actual money paid out to the player in the first year of the contract.

Again, if the money has no effect on the cap, its' not front-loaded. Only what will have a cap effect really matters.

You guys believe right now money matters from the owners perspective? That's terrible logic. If the owners are going to pay Smoove 73 Million dollars, does it matter what they pay him out of pocket up front?? NO. The only thing that matters is the cap hit.

Diesel, c'mon man - you know better than this. Money now is infinitely more expensive than money 5 years from now. Anytime you can defer making a payment a company will do so (Taking the NBA and the salary cap out of the picture). Hell, I used to work for a company that purposely made late payments on invoices because even with the late charges we came out ahead after calculating the interest accrued on the payment.

It makes a huge difference whether an owner has to pay 25million up front, or whether he can spread 15 million of that over 5 years.

[Diesel]

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Scenario: 2 contracts offered to Smith, both contracts are approx 5yr - 74 to 75 million deals

- Philly: frontloaded contract starts at 11 mill the first year + a 9 mill signing bonus, and say it increases approx 12m - 13m - 14m - 15m

- Atlanta: a frontloaded contract starts at 17mill the first year, and say it declines approx 16m - 15m - 14m - 13m

Questions:

1) Which contract would be more attractive to you if you were Josh Smith?

2) If you're Atlanta, would you frontload a deal like that to entice Smith to re-sign?

1. In Smith eyes, the main thing for him should be the cap hit... At the end of the Atlanta contract.. How is it perceived? Where can Smith's extension start at 18 or at 14? Same question for the Philly contract.?

2. Again. For the Spirit... a 5 yr 74-75 Million dollar deal is going to be the same for the spirit whichever way it's presented.. .However, they should be pleased as punch if Smoove would sign it because in 2013... Smoove's only making 13 Million instead of 17 million. That's 4 more million that they can spend elsewhere.

As long as ASG is not over the luxury cap this year, then frontloading like b... makes a lot of sense. They will have to resign Horf and they will have to resign JJ and they might resign Acie as well.

[Diesel]

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Diesel, c'mon man - you know better than this. Money now is infinitely more expensive than money 5 years from now. Anytime you can defer making a payment a company will do so

(Taking the NBA and the salary cap out of the picture).

Hell, I used to work for a company that purposely made late payments on invoices because even with the late charges we came out ahead after calculating the interest accrued on the payment.

It makes a huge difference whether an owner has to pay 25million up front, or whether he can spread 15 million of that over 5 years.

Mudderfudder. I was going to talk about the fact that you can't take the salary cap out of the discussion for the sake of business... however, I will go a different way with this.

You're still going to have to pay the money. So this is the deal... Pay it. You will have more money later. Pay it now.

Bottom line. I don't know about you, but I have paid up front for service before. When you go to the doctor for a routine visit, he wants your copay. Most of the time, he doesn't say "i'll bill you.". So what do you do... you go to the doctors office with your copay. Because whatever the reason, when you go to the doctor, you need his services.

Well, we need Smoove's services. The good thing about signing him to a bonus is that we can pay him up front and then for the owners they pay him less and less each year (although there's no cap affect).

[AHF]

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Frontload is a colloquial term for putting money in the front of a contract.

In the context of RFA signings where a team is threatening to "frontload" a contract as we did with JJ and as the Sixers are threatening with Josh Smith, the term "frontload" refers to the inclusion of a signing bonus because that substantially increases the actual money paid out to the player in the first year of the contract.

Again, if the money has no effect on the cap, its' not front-loaded. Only what will have a cap effect really matters.

That is not how the term is commonly used.

If that is your definition, then no one should use the word front-load regarding offers to RFAs with raises in their contracts because the inclusion of signing bonuses (which is where the term front-load is most commonly used) is the only means to front-load such a contract.

However, that is exactly how the term is commonly used. See:

http://sports.espn.go.com/nba/news/story?id=2104688

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The Hawks' offer, sources said, is likely to be front-loaded with a payment as high as $20 million in the first year of the deal.

[Guest]

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The sooner you figure out we're not talking about traded players, the better this discussion would be. I have shown you several players that were resigned by their own teams... They were given front-loaded contracts which allowed them the team to benefit (capwise) in the long run. Why are you persistently trying to change the subject to something that's so irrelevant??

Maybe that's what you do.

Change the subject.

Change the subject.

Personal attack.

I haven't personally attacked you at all ( in an effort to make what I'm saying look more important). If i did, this would be a less fun place... because I believe that I can do it much better than you. If you have no facts to back up the BS you are saying then just be quiet.

How do I change the subject when all I am asking you to do is answer a question I have posed to you. You keep changing the subject by not answering a simple question.

Reading through the rest of the post there isn't much that can be added and is nothing new to this discussion that hasn't already been discussed at least twice in some other thread the past week.

Do you still want to rehash your whole argument that we are all simpletons and don't understand that JJ had a caphit of $20 million?

[AtLaS]

Diesel, please just leave it alone. You are wrong. I remember when we gave JJ $20 million in his first year there were multiple explanations saying that he'd receive 20 in his first year, but for cap purposes the bonus would be spread over the life of the contract, increasing every year as if it were a normal contract. That big money in the first year can hurt the other team because they essentially have to come up with another 8-10 million out of pocket all at once, which can be tough to do for some teams.

A declining salary is a completely different type of contract.

[exodus]

These posts are from the summer of '05 after we made our offer to JJ.

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Dolfan I think many people misunderstand that frontloading the deal does not affect our cap. The frontloaded contract is a bonus to the player, and puts a financial squeeze on the team that would attempt to match.

The value of 8 million dollars in 5 years is about 11.5 million. You are in a sense paying them more than what the standard contract is.

Again frontloaded does nothing for our cap situation.

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No it has no cap implications whatsoever.

The remaining years' cap figures will not correspond to 4 yr 50 million figures, they will be standard 5 yr 70 million figures. There can be no impact on cap. Just that we give him a ton of actual cash now and owe him less actual cash later. No cap implications

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Exactly how the deal is done may never be known because it all depends on how large a signing bonus is given. Assuming JJ is getting $20M upfront, the deal would break down two ways:

First, the actual money paid to JJ:

Year 1: $20.0M

Year 2: $11.3M

Year 3: $12.1M

Year 4: $13.0M

Year 5: $13.8M

Second, the actual salary cap hit:

Year 1: $12.4M

Year 2: $13.2M

Year 3: $14.0M

Year 4: $14.9M

Year 5: $15.7M

click