When Bruce Allen was in charge with the Bucs, the team signed players to contracts with big signing bonuses. In fact, that's what most teams do: they prefer to hand out signing bonuses over guaranteed money, and since players prefer immediate cash in hand, they're just fine with that. But since Mark Dominik has taken over as General Manager, the Bucs have strongly steered away from signing players to contracts with big signing bonuses.
This is easy to see. When Jeff Faine was signed in 2008, he was given a six-year, $37.5 million contract with $15 million guaranteed - $12 million of which came in the form of a signing bonus. But under Dominik, the largest signing bonus handed out to a free agent was to the tune of $3 million to Michael Clayton in 2009. According to ESPN, none of the recent re-signings received a signing bonus at all, and neither did Kellen Winslow when he was signed to an extension in the 2009 season. Instead, the Buccaneers guaranteed the first two years in Kellen Winslow's contract. I'll explain why this is significant in a bit, hang with me.
This same philosophy of avoiding signing bonuses applied to the draft, albeit to a lesser extent. The late Gaines Adams was given a $13 million signing bonus in 2007 by Bruce Allen. According to Brian McIntyre of Football Outsiders and Mac's Football Blog (basically Pro Football Talk without the TMZ factor, just the facts), signing bonuses for first-round draft picks in the NFL were rare under the old CBA. Instead, first-round draft picks got the majority of their money through salary advances, second-year option bonuses and easily achievable incentives and roster bonuses. So it's kind of odd that Adams did get such a big signing bonus.
Under Mark Dominik, the Bucs gave Josh Freeman no signing bonus, instead giving him a $5.32 million option bonus and a one-time bonus of $3.15 million. While neither are signing bonuses, the option bonus does count as a signing bonus for salary cap purposes. Gerald McCoy did receive a signing bonus, though, to the tune of $3.6 million - which is only a very small portion of his total contract. He also received an option bonus of $9.975 million. Again I have to thank Brian McIntyre for providing me with these numbers. Players drafted in the second round and later routinely get signing bonuses, and this was no different for the Bucs these past two then.
So, it's clear that the Bucs have tried to avoid signing bonuses. What does this mean in concrete terms?
All of this relates to salary cap management. Signing bonuses can be a GM's best friend or his worst enemy, depending on what he needs to do. While signing bonuses are paid out immediately, they are pro-rated over the length of the contract for salary cap purposes. This allows a team to give a player a $10 million signing bonus in a five-year contract, which then counts for just $2 million against the salary cap in each of those contract years. This provides a team with little salary cap space the means to sign players to big contracts. As stated above, the same goes for option bonuses.
Doing so causes one problem, though, and that's acceleration of bonuses when players are cut. Whenever a player who had pro-rated bonuses in his contract is cut or traded, the remaining bonuses accelerate and apply in either that year or the next year depending on the timing of the cut.
Take Jeff Faine as an example. Had the Bucs decided to cut him after his first two years, they would have had to take a cap hit of $8 million - the remaining portion of the pro-rated bonus, which was $12 million over six years. This forces teams to keep players they sign to long contracts with big signing bonuses even when those players have stopped being valuable. That acceleration of signing bonus money was one of the reasons why the Bucs were in cap trouble by the mid 2000s.
Note that guaranteed salary accelerates just like bonus money does, but guaranteed salaries don't pro-rate.
And this leads me to the key point of this piece:
Shying away from signing bonuses gives the Buccaneers a lot of cap space in future years, and allows them to cut ties with free agency busts early.
Examining a number of contracts in detail should make this point clear, and also show what the Bucs exactly are doing. First, there's Donald Penn's contract. He got a six-year, $48 million contract in 2010, which had the first three years guaranteed, but just a $2 million signing bonus. If the Bucs decide to cut him after 2011, they owe him no more money, and there will be no more cap hits either. This protects the Bucs, but still offers the player money in his first years.
We can see the same thing in the supposedly expensive re-signings this past offseason. Davin Joseph got a seven-year contract, $52 million contract with $19 million guaranteed. But this contract isn't as big of a commitment as it seems. According to ESPN, the Bucs gave Davin Joseph a $9.5 million salary in 2011 and 2012, with both years fully guaranteed. After that, the salary drops off to two years of $6 million, two years of $7 million and one year of $7.5 million. While it seems like the Bucs committed to Davin Joseph with a long-term contract, they can cut him at any point after two years without suffering any salary cap hit.
If we look at Quincy Black's contract, we see the same thing: his first two years are guaranteed, while later years are not. Again, this will allow the Bucs to cut Black with little cap ramifications if he doesn't live up to his contract. Presumably, the same is true for Michael Koenen's contract as well as Jeremy Trueblood's contract. This approach has also allowed the Bucs to frontload contracts, eating up cap space this year to spare future years. The Bucs have a salary cap number of $108 million according to ESPN, which is 88 percent of the current salary cap.
It's interesting to contrast this approach with the Carolina Panthers' approach, which was the exact opposite. They signed defensive end Charles Johnson to a six-year, $76 million contract with a $30 million signing bonus according to ESPN. This means that if Charles Johnson disappoints, and the Panthers want to cut him after three years, they will have to suffer an immediate $15 million cap hit. Similarly, Jon Beason got a $20 million signing bonus. He suffers an injury after two years? Panthers have to take a $12 million cap hit. Similarly, James Anderson got a $7 million signing bonus
The Bucs and the Panthers were in very similar situations to start this free agency period, and both have focused on re-signing their own players, giving those players some very large contracts. But while the Panthers have burdened their salary cap for years to come, making it nearly impossible for them to cut ties with any disappointing signing, the Bucs have given themselves both cap flexibility and roster flexibility.
The Bucs have managed to steer away from signing bonuses, and this puts them in great shape for the future. It means that while the contracts they handed out seem very long, they can cut ties with the players they signed after two years without any ill effects. If the Bucs did indeed overpay for players, they will find out, and they can remedy that problem.
Going with guaranteed salaries over signing bonuses has also allowed the Bucs to frontload the contracts they did sign, which further alleviates any future cap hits on these contracts. Overall, the Bucs have done a good job using contract structures to protect the team from busts, and set the team up for future success.