Closing the books on 2011

As we put a wrap on both the 2011 NFL regular season and, well, 2011, there are some year-end accounting issues and other concerns to address. Let’s look at a few of these areas of business:

Extensions

NFL teams have until Saturday at 4 pm

eastern time to submit contract extensions. In such cases, any increase in 2011 compensation is treated as signing bonus and prorated through the life of the contract, with 2011 as one of the prorated years.

For example, were a player to receive a $5 million bonus and an additional four years on his contract, the bonus would be prorated with$1 million applied to 2011.

I was able to secure a few of these end-of-year extensions, including one with the agelessDonald Driver. At this late date, though, it is often difficult to have players sign with their existing teams with Door #2 and free agency awaiting them in March.

My sense is that we may see an end-of-year extension or two, but not many.

Cap Room

The new CBA has, for the first time, provided teams a valuable benefit: the ability to carry over remaining Cap room into the following year.

In the past, teams would have to go through the charade of “dummy incentives” in order to bring forward Cap room into the next year. I used to have to go through this drill, usually negotiating with our third-string quarterback in the final week of the season with a bonus of “$10 million for 7 touchdown passes.”

The $10 million would then count on the existing Cap and, when unearned, be credited to the next year’s Cap (although there was a scary moment where the player with the bonus, Craig Nall, ended up playing most of the final game due to having clinched our playoff spot).

Teams no longer need to go through that charade.

Thus, teams will have adjusted Caps of much more than the projected 2012 Cap number of around $125 million. A team like the Buccaneers, for example, with $25 million remaining in Cap room, may have an adjusted 2012 Cap of $150 million.

The question for the NFLPA is: will teams actually spend all of this Cap room? Keep in mind, there are no team spending minimums until 2013, and teams can “free ride” until next year.

45-man active roster and playtime bonuses

I started instituting 45-man active roster bonuses for Packer players in 2005 to give players more upside while protecting the team’s downside due to injury.

The bonuses—providing per game incentives as long as the player is active—have become a staple in not only Packer contracts, but those of other teams. And on a weekend such as this one ahead, several teams are playing meaningless games and may be resting players who have such bonuses.

Further, playing time incentives are common in many NFL contracts, rewarding players for achieving certain thresholds of participation through the season.

I remember at the end of the 2007 season in Green Bay when we rested several starters in the last regular season game. Then, in the midst of the celebration after winning a playoff game against the Seahawks—in a lovely snowstorm—two players asked me about playtime and roster bonuses for that last game. Players are always thinking about their money and their contract.

As management, it is necessary to make sure coaches are not aware of bonuses and incentives in players’ contracts in order to avoid any appearance of impropriety. It will be interesting to see how teams maneuver around the sticky issue of these roster bonuses and other incentive clauses juxtaposed against coach’s decisions to not play starting players.

Luck-y or not?

Finally, it will be interesting to see what happens with the Colts-Jaguars game this weekend. The Colts can insure the top pick with a loss. Alternatively, the Jaguars can—assuming the Rams lose to the 49ers—go a long way in preventing the Colts from having the top pick with a loss.

And the prize, of course, is Andrew Luck, perhaps a once-in-a-generation player that can change the fortunes of the team with a horseshoe as it mascot.

Having been with the Packers when we drafted Aaron Rodgers while having Brett Favre, I understand the value of protecting the future. In Indianapolis, Peyton Manning is the past and maybe the present; Andrew Luck is the future. The Colts have to take him if they have the chance.

The Colts can secure their future by losing. The Jaguars can potentially improve their future with a loss as well.  Look for a game with a lot of safeties:)

Wishing all of you a safe, happy and healthy New Year!