Jets will try to restructure Holmes contract

[McGinley]

Conor Orr ‏@ConorTOrr
RT @AdamSchefter: Jets will try to restructure Santonio's contract, per sources. Scheduled to make $11.25 million in 13, $7.5 gtd.

[sec.101row23]

It is a long read but explains fully what the Jets options are regarding Holmes deal.



Santonio Holmes- Set to count $12.5 million against the cap in 2013, Holmes represents the third largest cap hit on the team. Holmes’ contract is one of those I often talk about that has built in flexibility due to the fact that the Jets used a large guarantee rather than prorated bonus in structuring his deal. While he has almost no trade value the Jets could opt for the prorated bonus method to bring his numbers back in line with where they would have been had they used that structure in 2011. I probably would not opt for that but we’ll discuss it.

In some ways Holmes probably should go in the paycut or release category, but ego is involved with him and even a paycut on paper is going to have to be a reshuffling of money to the backend of his deal. Holmes is set to earn $11.25 million in salary plus a $250,000 workout bonus. Of that money $7.5 million is fully guaranteed and $250K is guaranteed for injury, but being that he is injured the Jets are probably stuck with that payment so its $7.75 million in guarantees. That all sounds bad, but let’s look deeper and see where the Jets have some power.

If released Holmes will count for $11.5 million in dead money. While that is a high figure the Jets will gain $1 million in cap space. That’s a little power, that one would think is offset by the need to cut Holmes a $7.75 million dollar check. Unlike most of their other contracts, though, Holmes’ guarantee was reported to be of the much weaker variety in that the team receives offset credits if he signs with another club. How does that matter? If the Jets cut him the Jets pay him $7.75 million. He is going to sign with another team. For how much? Considering injury, ineffectiveness in 2011, and a bad reputation around the league $4-$5 million a year would be the most I think he would earn. Since he can’t double dip his max earnings are likely $7.75 million this year. The Jets get credits for salary earned so that $1 million in savings can quickly grow to $4 or $5 million and their cash obligation reduce to $3 or $4 million. That’s power. It renders the $11.25 million base salary worthless .

What that means is the best financial future for him is tied to staying with the Jets both in 2013 and an opportunity to earn his $9.5 million in 2014. So in my mind the difference between $7.75 and $11.25 immediately comes off the books. Like I said he is going to want the contract to still say he makes his $45 million so you simply roll that $3.75 million into 2015 as a roster bonus. By doing this we don’t touch his 2014 cap number while lowering his 2013 cap charge to $9 million. Now some may say why not just release him. While I could see that point he still is a talent and the Jets do need something on offense in 2013. While I do not think he fits at all in a WCO system maybe you can get something out of him. I look at that as different as Pace’s situation where you could probably replace him with a warm pulse. The dropoff between Holmes to Clyde Gates is huge, no matter how much Holmes mopes around the field.

Do you want to cut more out of Holmes’ cap? There are two avenues by which we can do that. One of the good things about a player being injured is that you can work with his contract to skirt the salary cap for a season by using in game roster bonuses as a replacement for salary. Holmes was only active for 4 weeks in 2012 so only ¼ of the total roster bonus would count on the 2013 cap if the Jets went that route. This is what they did with LaRon Landry last year to save on cap space.

Now the negative with that move is that I don’t think his side would be as willing to accept a pay reduction since there is danger that the bonus money will not be earned. To make it work you would have to do something that most of the fanbase would be against and that is guarantee an offsetting amount of salary in 2014, a guarantee that would void only upon playing a certain number of games in 2013. How would that work in practice? You would pay him a base salary of $4.3 million in 2013 plus his $250,000 workout bonus. Those salaries are earned regardless of injury. You would convert the remaining $3.2 million into per game roster bonuses worth $200,000 per game in which he is on the gameday active list. Because he was only active 4 games in 2013 only $800,000 of the roster bonuses count towards the Jets 2013 cap with the rest only affecting the cap at the end of the season. This brings his cap charge down to $6.6 million. I could see doing that since the only pain in 2014 is if he doesn’t play 16 games in 2013 because he would be more difficult to cut. The $200,000 per game was just for illustration and you could do any number you want as long as his base salary is at least $840,000 in 2013. I like this idea if he is staying here.

The other option is to go all in on Holmes and decide you definitely want him here in 2014. What you do in that case is take the $7.5 million base, reduce it to $840,000 and convert the remaining $6,660,000 to a signing bonus. That reduces his 2013 cap charge to $4.56 million, but it increases his 2014 cap to $12.97 million and his 2014 dead money to $6.94 million. I don’t like either of those numbers. Even if he plays well it puts you right back to square 1 with his contract. I don’t think he is worth the risk of this move even if it means short term health. Im going to aim for a paycut and a “lets play ball” mentality with the contract.
2013 Savings: $5.9 million in Cap and $3.5 million in Cash
2014 Savings: $0K Cash and Cap

[iahawkeyejet]

Very interesting read. If Holmes is interested in getting one final pay check after his Jets days are over, this could be one way to help repair your image(to the extent it can be repaired). That being said, I am not holding my breath.

[patman]

Originally Posted by sec.101row23

It is a long read but explains fully what the Jets options are regarding Holmes deal.



Santonio Holmes- Set to count $12.5 million against the cap in 2013, Holmes represents the third largest cap hit on the team. Holmes’ contract is one of those I often talk about that has built in flexibility due to the fact that the Jets used a large guarantee rather than prorated bonus in structuring his deal. While he has almost no trade value the Jets could opt for the prorated bonus method to bring his numbers back in line with where they would have been had they used that structure in 2011. I probably would not opt for that but we’ll discuss it.

In some ways Holmes probably should go in the paycut or release category, but ego is involved with him and even a paycut on paper is going to have to be a reshuffling of money to the backend of his deal. Holmes is set to earn $11.25 million in salary plus a $250,000 workout bonus. Of that money $7.5 million is fully guaranteed and $250K is guaranteed for injury, but being that he is injured the Jets are probably stuck with that payment so its $7.75 million in guarantees. That all sounds bad, but let’s look deeper and see where the Jets have some power.

If released Holmes will count for $11.5 million in dead money. While that is a high figure the Jets will gain $1 million in cap space. That’s a little power, that one would think is offset by the need to cut Holmes a $7.75 million dollar check. Unlike most of their other contracts, though, Holmes’ guarantee was reported to be of the much weaker variety in that the team receives offset credits if he signs with another club. How does that matter? If the Jets cut him the Jets pay him $7.75 million. He is going to sign with another team. For how much? Considering injury, ineffectiveness in 2011, and a bad reputation around the league $4-$5 million a year would be the most I think he would earn. Since he can’t double dip his max earnings are likely $7.75 million this year. The Jets get credits for salary earned so that $1 million in savings can quickly grow to $4 or $5 million and their cash obligation reduce to $3 or $4 million. That’s power. It renders the $11.25 million base salary worthless .

What that means is the best financial future for him is tied to staying with the Jets both in 2013 and an opportunity to earn his $9.5 million in 2014. So in my mind the difference between $7.75 and $11.25 immediately comes off the books. Like I said he is going to want the contract to still say he makes his $45 million so you simply roll that $3.75 million into 2015 as a roster bonus. By doing this we don’t touch his 2014 cap number while lowering his 2013 cap charge to $9 million. Now some may say why not just release him. While I could see that point he still is a talent and the Jets do need something on offense in 2013. While I do not think he fits at all in a WCO system maybe you can get something out of him. I look at that as different as Pace’s situation where you could probably replace him with a warm pulse. The dropoff between Holmes to Clyde Gates is huge, no matter how much Holmes mopes around the field.

Do you want to cut more out of Holmes’ cap? There are two avenues by which we can do that. One of the good things about a player being injured is that you can work with his contract to skirt the salary cap for a season by using in game roster bonuses as a replacement for salary. Holmes was only active for 4 weeks in 2012 so only ¼ of the total roster bonus would count on the 2013 cap if the Jets went that route. This is what they did with LaRon Landry last year to save on cap space.

Now the negative with that move is that I don’t think his side would be as willing to accept a pay reduction since there is danger that the bonus money will not be earned. To make it work you would have to do something that most of the fanbase would be against and that is guarantee an offsetting amount of salary in 2014, a guarantee that would void only upon playing a certain number of games in 2013. How would that work in practice? You would pay him a base salary of $4.3 million in 2013 plus his $250,000 workout bonus. Those salaries are earned regardless of injury. You would convert the remaining $3.2 million into per game roster bonuses worth $200,000 per game in which he is on the gameday active list. Because he was only active 4 games in 2013 only $800,000 of the roster bonuses count towards the Jets 2013 cap with the rest only affecting the cap at the end of the season. This brings his cap charge down to $6.6 million. I could see doing that since the only pain in 2014 is if he doesn’t play 16 games in 2013 because he would be more difficult to cut. The $200,000 per game was just for illustration and you could do any number you want as long as his base salary is at least $840,000 in 2013. I like this idea if he is staying here.

The other option is to go all in on Holmes and decide you definitely want him here in 2014. What you do in that case is take the $7.5 million base, reduce it to $840,000 and convert the remaining $6,660,000 to a signing bonus. That reduces his 2013 cap charge to $4.56 million, but it increases his 2014 cap to $12.97 million and his 2014 dead money to $6.94 million. I don’t like either of those numbers. Even if he plays well it puts you right back to square 1 with his contract. I don’t think he is worth the risk of this move even if it means short term health. Im going to aim for a paycut and a “lets play ball” mentality with the contract.
2013 Savings: $5.9 million in Cap and $3.5 million in Cash
2014 Savings: $0K Cash and Cap

First, Holmes is injured and they can not cut him unless they reach and injury settlement with him.

Second, if he is cut the chance of him seeing any money more than 1 or 2 mill from any team in the league is remote, he is a head case that has a Liz Franc injury. And if you think he signs a contract that gives the jets his money, I dont know what to say to that? Don't you think he would structure the contract so that he gets vet min in 2013 and say 1.5 of a 5mill contract guranteed for 2014. This way he keeps the money?

Third, the idea that he would trade guaranteed money for a chance at 2014 dollars to me is absurd. If he recovers and plays in 2013 to his previous level the jets either pay him his existing contract in 2014 or he walks and gets another SB with another team. If the jets don't think he is worth the money in 2014 why would another team? So he is best served by keeping his guarantee. The guy suffered an injury that may end his career, he needs every dollar than he can get, not promises.

[Beerfish]

Do not do ANYTHING that will force us to keep him longer than necessary. I'd rather eat more pain than to have to have this clown on the team any longer than needed.

[DDNYjets]

I'd be shocked if took a pay cut. I really don't want to touch any of these contracts. We can pretty much get out from under all of them after this year.

[Choon328]

Originally Posted by patman

First, Holmes is injured and they can not cut him unless they reach and injury settlement with him.

Second, if he is cut the chance of him seeing any money more than 1 or 2 mill from any team in the league is remote, he is a head case that has a Liz Franc injury. And if you think he signs a contract that gives the jets his money, I dont know what to say to that? Don't you think he would structure the contract so that he gets vet min in 2013 and say 1.5 of a 5mill contract guranteed for 2014. This way he keeps the money?

Third, the idea that he would trade guaranteed money for a chance at 2014 dollars to me is absurd. If he recovers and plays in 2013 to his previous level the jets either pay him his existing contract in 2014 or he walks and gets another SB with another team. If the jets don't think he is worth the money in 2014 why would another team? So he is best served by keeping his guarantee. The guy suffered an injury that may end his career, he needs every dollar than he can get, not promises.

Thowing cold water on any optimistic Jets post once again. Get a life already.

[Ray Ray19]

Originally Posted by Choon328

Thowing cold water on any optimistic Jets post once again. Get a life already.

LOL, was thinking the same thing.

[DDNYjets]

Originally Posted by Ray Ray19

LOL, was thinking the same thing.

Since you are "running out of lives" I guess we can expect more of this piggybacking and passive aggressiveness.

And I am not sure how this is positive for the Jets unless he takes a pay cut.

[C Mart]

@MMehtaNYDN: Source confirms that Jets will try to restructure Santonio Holmes' contract, as @AdamSchefter reported. I'm told he likely won't be cut #nyj

[Ray Ray19]

Originally Posted by DDNYjets

Since you are "running out of lives" I guess we can expect more of this piggybacking and passive aggressiveness.

And I am not sure how this is positive for the Jets unless he takes a pay cut.

Still burned over me exposing your smug hypocrisy, eh?

Get over it, junior, and take note.

I read patman's post, and was going to respond in kind, choon beat me too it, there is nothing wrong here, just more of your shameless campaigning.

Perhaps a PM session with SAR is in order?

[Ray Ray19]

Originally Posted by sec.101row23

It is a long read but explains fully what the Jets options are regarding Holmes deal.



Santonio Holmes- Set to count $12.5 million against the cap in 2013, Holmes represents the third largest cap hit on the team. Holmes’ contract is one of those I often talk about that has built in flexibility due to the fact that the Jets used a large guarantee rather than prorated bonus in structuring his deal. While he has almost no trade value the Jets could opt for the prorated bonus method to bring his numbers back in line with where they would have been had they used that structure in 2011. I probably would not opt for that but we’ll discuss it.

In some ways Holmes probably should go in the paycut or release category, but ego is involved with him and even a paycut on paper is going to have to be a reshuffling of money to the backend of his deal. Holmes is set to earn $11.25 million in salary plus a $250,000 workout bonus. Of that money $7.5 million is fully guaranteed and $250K is guaranteed for injury, but being that he is injured the Jets are probably stuck with that payment so its $7.75 million in guarantees. That all sounds bad, but let’s look deeper and see where the Jets have some power.

If released Holmes will count for $11.5 million in dead money. While that is a high figure the Jets will gain $1 million in cap space. That’s a little power, that one would think is offset by the need to cut Holmes a $7.75 million dollar check. Unlike most of their other contracts, though, Holmes’ guarantee was reported to be of the much weaker variety in that the team receives offset credits if he signs with another club. How does that matter? If the Jets cut him the Jets pay him $7.75 million. He is going to sign with another team. For how much? Considering injury, ineffectiveness in 2011, and a bad reputation around the league $4-$5 million a year would be the most I think he would earn. Since he can’t double dip his max earnings are likely $7.75 million this year. The Jets get credits for salary earned so that $1 million in savings can quickly grow to $4 or $5 million and their cash obligation reduce to $3 or $4 million. That’s power. It renders the $11.25 million base salary worthless .

What that means is the best financial future for him is tied to staying with the Jets both in 2013 and an opportunity to earn his $9.5 million in 2014. So in my mind the difference between $7.75 and $11.25 immediately comes off the books. Like I said he is going to want the contract to still say he makes his $45 million so you simply roll that $3.75 million into 2015 as a roster bonus. By doing this we don’t touch his 2014 cap number while lowering his 2013 cap charge to $9 million. Now some may say why not just release him. While I could see that point he still is a talent and the Jets do need something on offense in 2013. While I do not think he fits at all in a WCO system maybe you can get something out of him. I look at that as different as Pace’s situation where you could probably replace him with a warm pulse. The dropoff between Holmes to Clyde Gates is huge, no matter how much Holmes mopes around the field.

Do you want to cut more out of Holmes’ cap? There are two avenues by which we can do that. One of the good things about a player being injured is that you can work with his contract to skirt the salary cap for a season by using in game roster bonuses as a replacement for salary. Holmes was only active for 4 weeks in 2012 so only ¼ of the total roster bonus would count on the 2013 cap if the Jets went that route. This is what they did with LaRon Landry last year to save on cap space.

Now the negative with that move is that I don’t think his side would be as willing to accept a pay reduction since there is danger that the bonus money will not be earned. To make it work you would have to do something that most of the fanbase would be against and that is guarantee an offsetting amount of salary in 2014, a guarantee that would void only upon playing a certain number of games in 2013. How would that work in practice? You would pay him a base salary of $4.3 million in 2013 plus his $250,000 workout bonus. Those salaries are earned regardless of injury. You would convert the remaining $3.2 million into per game roster bonuses worth $200,000 per game in which he is on the gameday active list. Because he was only active 4 games in 2013 only $800,000 of the roster bonuses count towards the Jets 2013 cap with the rest only affecting the cap at the end of the season. This brings his cap charge down to $6.6 million. I could see doing that since the only pain in 2014 is if he doesn’t play 16 games in 2013 because he would be more difficult to cut. The $200,000 per game was just for illustration and you could do any number you want as long as his base salary is at least $840,000 in 2013. I like this idea if he is staying here.

The other option is to go all in on Holmes and decide you definitely want him here in 2014. What you do in that case is take the $7.5 million base, reduce it to $840,000 and convert the remaining $6,660,000 to a signing bonus. That reduces his 2013 cap charge to $4.56 million, but it increases his 2014 cap to $12.97 million and his 2014 dead money to $6.94 million. I don’t like either of those numbers. Even if he plays well it puts you right back to square 1 with his contract. I don’t think he is worth the risk of this move even if it means short term health. Im going to aim for a paycut and a “lets play ball” mentality with the contract.
2013 Savings: $5.9 million in Cap and $3.5 million in Cash
2014 Savings: $0K Cash and Cap

Jason did a write up on the possibility of the Jets approaching Holmes like the Eagles did with Vick. The Eagles had better numbers to work with than the Jets do, but there are some similarities that creates leverage for the Jets as the Eagles had with Vick.

It's an obvious target, the Jets need to do their due diligence up and down the roster, and it would be foolish for Holmes to play hardball.

[sec.101row23]

Originally Posted by Ray Ray19

Jason did a write up on the possibility of the Jets approaching Holmes like the Eagles did with Vick. The Eagles had better numbers to work with than the Jets do, but there are some similarities that creates leverage for the Jets as the Eagles had with Vick.

It's an obvious target, the Jets need to do their due diligence up and down the roster, and it would be foolish for Holmes to play hardball.

The biggest difference was that Vick didnt have the amount of guaranteed salary that Holmes has. The Vick deal was easy because of that. Only around 4 million of Holmes salary this year isnt guaranteed, so the wiggle room is less and less motivation for Holmes to agree. Holmes could play hardball and just tell the Jets to cut him, and collect the 7 million dollars and go play elsewhere.

[patman]

Originally Posted by Choon328

Thowing cold water on any optimistic Jets post once again. Get a life already.

I don't understand the reason to pretend. The NFL is not "Far Far Away" The poster posted a hypothetical situation and I responded. When Jason posted pretty much the same thing, I said that i thought that Holmes would take a pay cut this year, and I still do. But IMO he will not touch his guarantee portion of his contract. His contract is 11 mill of which 3.5 is not guaranteed, I think he will be ok with cutting this years salary down to 9 if they fully guarantee it. This will save the jets 2.25 mill this year and Holmes is guaranteed 1.25 more than he is now. I think he would further reduce his guarantee by an equal 2014 guarantee.

I am just being pragmatic. It seemed like the scenarios the OP presented and approved of only benefited the jets and Holmes was not even thrown a bone.

[Nike]

The Jets are interested in re-working Santonio Holmes' deal amid a cap crunch, according to a report from ESPN's Adam Schefter.

Holmes is on the books to make $11.25 million next year. Of that, $7.5 million is guaranteed money. He represents one of the last major contracts dealt out during a Mike Tannenbaum era marked with heavy spending.

The consideration comes just a week after the Jets cut roughly $31 million in cap room by parting ways with veterans Bart Scott, Calvin Pace, Eric Smith and Jason Smith.

The move makes sense as the Jets try and put themselves in a position to rebuild under new GM John Idzik. Although Holmes had a dynamic 2010 season, scoring six touchdowns and netting 746 yards in just 12 games, he failed to recapture the same magic after signing a new deal. In the past two seasons, he has just 926 yards and nine touchdowns.

In addition, Holmes is recovering from a Lisfranc injury that caused him to miss 12 games last season. He had a second surgery this month to remove the plate in his foot and, as of early December, said that his doctors expected him to resume jogging in April

[McGinley]

Brian Costello ‏@BrianCoz
A source told me last month that Holmes is unwilling to take a paycut. This could get interesting. #NYJ

[Eckesg1]

Originally Posted by McGinley

Brian Costello ‏@BrianCoz
A source told me last month that Holmes is unwilling to take a paycut. This could get interesting. #NYJ

I don't know if it actually would be a paycut in terms of overall money. We will see how Idzik wants to structure it.

[Eckesg1]

Originally Posted by sec.101row23

The biggest difference was that Vick didnt have the amount of guaranteed salary that Holmes has. The Vick deal was easy because of that. Only around 4 million of Holmes salary this year isnt guaranteed, so the wiggle room is less and less motivation for Holmes to agree. Holmes could play hardball and just tell the Jets to cut him, and collect the 7 million dollars and go play elsewhere.

Coming off an injury? Who would take him? Just like Darrelle Revis, he isn't going to get max value.

[Ray Ray19]

Originally Posted by sec.101row23

The biggest difference was that Vick didnt have the amount of guaranteed salary that Holmes has. The Vick deal was easy because of that. Only around 4 million of Holmes salary this year isnt guaranteed, so the wiggle room is less and less motivation for Holmes to agree. Holmes could play hardball and just tell the Jets to cut him, and collect the 7 million dollars and go play elsewhere.

True, and like I said, the Eagles had more leverage due to less guaranteed money, also as you noted, but Holmes wouldn't really command a big market with his character issues and coming off of a significant injury, so there is also risk on Holmes part to play hardball.

[patman]

Originally Posted by Eckesg1

I don't know if it actually would be a paycut in terms of overall money. We will see how Idzik wants to structure it.

I am sure Holmes will want to work with the jets as long as it does not cost him the money he took as a guarantee in lieu of a SB. The jets committed to him to an extent that IMO no one else would have, and i think he will acknowledge that.