03-10-2023, 03:08 PM -
QUICKLY HERE....
As First alluded to.... A "restructure" does NOT mean the player is getting less money. A contract would have to be completely rewritten to get the actual money amounts changed. In other words, the structure, the skeleton, of the contract is changed. The way the money is paid is changed. The actual money involved stays the same. (Almost always..).
There are a few different ways "restructures" happen, but usually.... Yearly salaries are reworked and called "bonuses". Bonuses are advantageous to the player AND sometimes to the club (Like Now..). If 'salary' is converted to 'bonus' it becomes "guaranteed", which of course benefits the player. Bonuses are payable immediately upon execution of the contract as long as the terms are met. Once again this benefits the player. HOWEVER.... The "Bonus" amount is prorated over the life of the contract or 5 years whichever is less. So this means (for example) a player who has a 20 Mil salary coming this year could be restructured to a "Bonus" and the 20 Mil would be spread out over five years. This would effectively reduce the cap hit this year to 4 Mil and thereby 'save' the team 16 Mil against the cap (for this year..). Of course.... If there is only 3 years remaining on the contract, the bonus would be spread over those 3 years instead of 5 years.
So.... It saves the team money against the cap right now, BUT it makes the amount guaranteed while spreading it out over a few years. Also... Disadvantage because you're pushing the accounting for the money down the road, it impacts the cap for future years. Teams usually accept that risk because the annual "cap" goes up each year (WELL...almost always..). The COVID years really shut down the teams and consequently the cap regressed some. But the teams plan on it going up....
This is all just my understanding... I could be wrong..!!
As First alluded to.... A "restructure" does NOT mean the player is getting less money. A contract would have to be completely rewritten to get the actual money amounts changed. In other words, the structure, the skeleton, of the contract is changed. The way the money is paid is changed. The actual money involved stays the same. (Almost always..).
There are a few different ways "restructures" happen, but usually.... Yearly salaries are reworked and called "bonuses". Bonuses are advantageous to the player AND sometimes to the club (Like Now..). If 'salary' is converted to 'bonus' it becomes "guaranteed", which of course benefits the player. Bonuses are payable immediately upon execution of the contract as long as the terms are met. Once again this benefits the player. HOWEVER.... The "Bonus" amount is prorated over the life of the contract or 5 years whichever is less. So this means (for example) a player who has a 20 Mil salary coming this year could be restructured to a "Bonus" and the 20 Mil would be spread out over five years. This would effectively reduce the cap hit this year to 4 Mil and thereby 'save' the team 16 Mil against the cap (for this year..). Of course.... If there is only 3 years remaining on the contract, the bonus would be spread over those 3 years instead of 5 years.
So.... It saves the team money against the cap right now, BUT it makes the amount guaranteed while spreading it out over a few years. Also... Disadvantage because you're pushing the accounting for the money down the road, it impacts the cap for future years. Teams usually accept that risk because the annual "cap" goes up each year (WELL...almost always..). The COVID years really shut down the teams and consequently the cap regressed some. But the teams plan on it going up....
This is all just my understanding... I could be wrong..!!