Salary Cap Update: What’s Going on With VG?
Jason from nyjetscap.com contacted us last night to inform us that the Jets restructured Vernon Gholston’s contract on Monday. In light of the recent announcement that he’s moving to defensive end, we’ve been looking into what this deal might signify in terms of their plans for him going forward.
Before we get started, it’s important to note that Vernon’s people have tended to keep details of this contract close to the vest and it has been tougher than usual to get specifics. However, Jason is working his sources and we will obviously update you if there is anything noteworthy to report. For the purposes of this article, I will have to talk in generalities and speculate about some of the details.
Let’s first of all recap the details of Vernon’s original deal. Although it was widely reported as a $50m contract, this was only after taking into account escalators and incentives which would only have come into play if he became a star player. The actual base value of the contract is $32m of which $21m was reported as being guaranteed. However, within that $21m is a playing time incentive of approximately $4m which he has not reached yet. He would need to play 45% of the snaps in one of his first four seasons to earn this sum. Most of the non-guaranteed money also comprises incentives which he will not have earned. If Gholston fails to reach any more incentives and is off the team after his third or fourth year, he will actually have cost the Jets $17m, which is still a huge sum for an unproductive player, but not as bad as some have reported and certainly not a cap-killer, especially when there is no cap this season. The reason Gholston is not likely to be released is that he hasn’t received all of his guaranteed money yet and the Jets are going to have to pay him at least another $5.9m, so they might as well see whether they can get some production out of him.
The deal was already restructured once, as Gholston was advanced $6.3m of salary last March. This was guaranteed money anyway and was converted to a signing bonus, so it didn’t make much, if any, difference to the Jets cap situation. It’s likely that this was something that was agreed in advance, in order to compensate Gholston for agreeing to a deal with a low first year salary and without a huge upfront signing bonus to enable the Jets to fit his deal in under the rookie allocation. It would appear that this was a mere formality, unrelated to his on-field performance.
Finally, on Monday, the Jets have advanced him salary again, reducing his salary in the final two years of his deal to the veteran’s minimum. Once again, this is guaranteed money, so they are not increasing the amount due to him, but he has apparently received an advance of approximately $2.5m, which will again have to be converted to bonus money.
The salary cap treatment of this money depends on the type of bonus it was converted to. A roster bonus would count against the 2010 cap, which would have no implications because this is an uncapped year. However, a signing/option bonus would be prorated over the remainder of the contract. In restructuring his contract, the Jets have to comply with the 30% rule, so his 2010 salary compensation cannot exceed 130% of his 2009 compensation. Since signing bonuses don’t count – and Jason’s source tells him the amount paid in March was all signing bonus – then the Jets may be limited as to the extent of the $2.5m advance that can be treated as a roster bonus, because his 2009 salary compensation was about $3m, so his 2010 compensation must be less than $4m.
So, without knowing the specific details and being able to quantify exact savings, what does this mean?
1. If he plays well enough to remain on the team next year, his cap number will be lower in a year where there should be a salary cap (if there’s even a season).
2. If he doesn’t play well enough to remain on the team next year, the cap hit when they cut him will be lower.
3. If he shows some promise this season, then he will have a low enough salary going forward that trading him after the season becomes a realistic possibility.
Jason also speculated that the Jets might have renegotiated the $4m playing time incentive mentioned above:
I’d imagine they could make a case to him and his agent that they cant afford to play him and give him the opportunity with a 3.6M tag over their head. If he agrees to waive it in lieu of a higher bonus based on either more playing time or production he could get a chance to see the field more. This could be a reason why the Gholston to DE story broke now and maybe even tips the Jets hand as to the fact that they want to make him into a full rotational guy there to see what he can do. He may have a chance to earn something based on sacks and/or playtime that he did not have in his contract before.
Once again, if we hear anything on that, we will update you.
Two final possibilities must be reconsidered in the light of the contract renegotiation, although both still seem unlikely.
The first is that the Jets may simply cut ties with Gholston. As I’ve mentioned before, releasing Gholston now will only bring forward the date of payment of the guaranteed money owed to him, which would seem counter-intuitive in the current climate. However, could the fact that they have advanced him some money be a sign that they are prepared to advance him the rest of that money in camp if he doesn’t show enough to merit a roster spot? My sense would be no, although it’s not entirely impossible that some of these cost-cutting moves this offseason have been done with a potential Gholston release in mind. Restructuring the deal in this way would not affect that transaction though, so I doubt this would have been the motivation behind it.
Finally, is there any chance at all that the Jets could be trading Gholston now? As a former top ten pick that hasn’t had a lot of chances to play and isn’t 24 until June, he would probably have trade value if it weren’t for the fact that he was owed $6m in terms of guaranteed money. Could the Jets be advancing him money in order to reduce the salary burden on a team that might trade a pick for him in the upcoming draft? This would be akin to what happens in baseball, where a team will agree to pick up part of the salary of a player that it trades away. Our sense is no, at the moment, because if the Jets were looking to do something like that, it would make more sense for them to convert most of his 2010 salary to a roster bonus payable now. They haven’t done that at this stage and while this could be an option that remains open to them, I would consider this unlikely, if for no other reason than that his current value is probably lower than it would be in a year’s time if he can contribute to the rotation.
In conclusion, this renegotiation seems to point to the fact that Gholston is, as we expected, getting one last chance to prove he can play in the NFL. Although the cap savings going forward will be modest, we’ve seen already during this offseason that every dollar counts. I have no idea how successful his full time switch to defensive end (which wouldn’t have been an option in the Mangini defense) will go, but I haven’t given up hope that he can contribute as a rotational lineman. For the Jets, there is no place to hide from the fact that this wasn’t what they thought they were drafting when they gave up the sixth pick in the draft and a multi-million dollar contract, but it’s clear they’re doing their best to keep the damage to a minimum.
Once again, big thanks to Jason and we welcome your queries and corrections in the comments.
31 Responses to Salary Cap Update: What’s Going on With VG?
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Green Goblin says:
Gholston should be a solid DE now that he put on the extra pounds. His natural strength should make him a force to be reckoned with on the line.
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JetOrange says:
Sometimes being a good GM is handling difficult situations. It is easy to get frustrated with Vernon, and just get rid of him. Tannenbalm continues to reduce risk , and maximize opprotunity for the player and the Jets. If Golston becomes marginally effective, its in large part due to the continuous effort of Rex and Tanny.
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joe c from ct says:
Bent is a Beast!! sometimes….
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TJBfan says:
Interesting find and good read. Now the plot thickens…I have a feeling at least one player will be traded tonight
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TimNY says:
Very well done article. I’m pretty optimistic that Vernon can contribute at DE.
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Brendan says:
Hopefully this article has people stop saying the Jets should cut him. He’s rather inexpensive and hopefully makes some plays back with his hand in the dirt.
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RJ says:
What about the possibility that this was done to make room for signing other players, like mangold, revis and the WRs who will command large contracts?
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Ferraro41 says:
Bent…this was an outstanding post…if only we had reporting like this from the Jets beat writers.
As for Gholston, I feel sort of prescient this morning :=) I had a conversation with fellow Jets fans last fall about Gholston, and how the Jets should move him to DE.
Look, we all know now that Gholston is never going to be a pass rushing outside LB. It was a bad miscalculation by Mangini to think he could take a college DE with stiff hips and make him a LB who has to play in space.
Gholston has only ever had success in college A) out of a three point stance, and B) when he can use his strength to push people around. Let the guy bulk up (which it sounds like he already has), and make him a full-time DE.
Even if he is never anything more than a younger version of Marques Douglas, it’s still better than him being a complete and total bust. I mean, unless he develops into a monster DE, he’ll likely always be somewhat of a bust because he was picked # 6 overall, but if they can get something, anything productive out of him, that’s about all they can hope for at this point.
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Denis says:
In light of all our roster moves, new players and super bowl expectations, the thought of not cutting ties with this jerk VG and leaving him on the team, while there is talk of cutting guys like Shaun Ellis makes me want to take a machine gun to Florham Park. I’m kidding about the going postal part, but this kills me. Gholston is a bum and he always will be. With all our moves obviously money is not an object, so in this uncapped year, why not just cut ties and suck it up. We blew the pick. Again, in a season like this, with so many new players and dwindling roster spots available, wasting a roster spot on this BUM while cutting a similarly positioned player like Ellis (cutting Bryan Thomas wouldn’t break my heart) is just not a smart move for the 2010 season. This money with regard to the cap isn’t coming out of our pockets. Again, it’s an uncapped year and this is the time for us to cut ties with wasted players with bloated contracts. Not cut 10 year vets like Ellis. If money weren’t an object is there any universe that exists where a Jets fan would not take Ellis and Thomas over Gholston for this upcoming season anyway?
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Why is VG a jerk? You don’t cut ties because it’s senseless. The team is going to have to pay him his guaranteed money whether he is on the team or not, so why not keep him on the roster and at least get something useful out of him?
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Brendan,
He’s a soft, unmotivated player with no motor. To say the least. I agree that if he’s going to get guaranteed money, why not keep him to at least get some production … However, if his roster spot comes at the expense of Ellis, which is essentially probably going to happen, it’s a bad move. The really my point. -
As i said yesterday….Rex’s DE’s eat blocks for the most part…if they can get to the passer once in a while great.
Gholston’s one talent is he is strong so a bulked up version in 2010 should allow him to hold up some OL while everyone else makes plays
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Ellis isn’t going anywhere. In the article posted yesterday it even said “to be Shaun Ellis’ backup”. And having a guy as a rotational backup isn’t going to effect the status of a starter.
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Sometimes when us fans get into the nonstop talk about cap space, contracts, etc. you’d think it were our money at stake here, when it’s really a billionaire’s money who just opened a new stadium. (That’s not a knock or anything, just stating the obvious). But with that said, with this uncapped season we can shed ourselves of this bum and not have any long term salary cap ramifications. Just have to bite the bullet for the one season. Frankly, I’m amazed at all this optimism I’m seeing on this post with regards to Gholston’s potential as a DE. There is no reason, based on his performance, to expect much of anything from him, whereas we know what guys like Ellis and Thomas can do. I respectfully disagree …
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Brendan,
I hope to God you are right and Ellis is still here … and by the way, that’s my main motivation here, keeping him -
Guaranteed money is guaranteed money. If you cut him this year you’re still paying him that money in subsequent years (until the guaranteed $ is paid). I don’t see the issue with keeping a guy (who is only 5 months older than out baby QB) entering his 3rd year, who is going back to a more natural position (not his exact college job, but at least one where he can feel more comfortable), and letting him backup & keep starters fresh, while filling a spot on special teams.
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Not trying to belabor the point here, but we don’t know who we are drafting this weekend and roster spots are going to be limited. I just don’t want to live in a world where the 2010 season starts and Gholston is on the roster and Ellis isn’t. I’m not saying anything controversial here (other than my loathing in general of Gholston’s performance).
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What I’m saying is Gholston’s standing with the team won’t impact their decision regarding Ellis. Ellis is the team’s top DL, Gholston is in the bottom 3 or so.
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Freeman24 says:
I’m optimistic about V.G. At DE. Why not? he’s strong enough to hold the point of attack (especially if he bulked up), his best move (bull rush) is a lot more effective as a 3-4 End than OLB, he was productive as an End in college. His inflexible hips (as one astute fan pointed out above) are not as much of an issue for an End. His athletic ability rates much higher relative to Ends.
Basically it was Mangini’s fault to take him out of positon just a dumb decision Worse than naming his son Brett.
Now Ryan’s making it right after having him for a year.
Its bit of a reach but I don’t like Mr (having a blemish on his draft record, a half dozen sacks out of VG would be huge for us this year and its easier than rooting for Jason Taylor.
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Bent says:
Denis – I agree with much of what you’re saying. In the unlikely event that Ellis is moved, I can only see that being because they’ve picked up a younger or cheaper replacement of the same standard or better.
There are still salary cap implications in future years if he is cut now (assuming the new CBA imposes a future cap charge on unaccelerated bonus money, as expected). In fact, this move likely means that the cap situation is the same whether he is cut now or next year, so if they’re paying him, they might as well retain him.
Interestingly, when the Jets go to 4-3 Ellis does become a conventional pass rusher, so if that’s who Gholston is backing up, then the days of him rushing the passer are not necessarily over.
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Dylan says:
Great article Bent. This makes all the sense in the world. Basically, the Jets are giving him one more chance to prove himself. If he fails to impress again, they can cut him and they wont owe him as much money. If he impresses, the can keep him for a reasonable price. They will also have more money to resign guys like Revis, Mangold, Cromartie, Holmes, Edwards, etc. Plus if he does impress, he would actually have some trade value. This is all assuming there will be a cap though.
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jp losman says:
i dont know who i like more, Bent or Mr T?
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arvydas says:
vernon will be a beast on the line, let him bull rush dem
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miketaliaferro says:
Bent, again, kudos.
Like many of us who have been around a bit, I’m uncertain whether I’m continually more impressed by your football business acumen or the clear, concise, entertaining writing style that you employ to pass along said acumen. You insist on making the opaque accessible. For that, we thank you.
Well done. We’re lucky to have you on here, both as Jets fans and as TJB faithful.
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Green Goblin,
From your keyboard to God’s eyes…
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Also, one tangential note here about Tanny and his storied MO…
Anyone notice how differently these kernels of information on VG are being found?
Our best and brightest — Bent and Jason — had to dig like ferrets, then extrapolate like crazy to paint a reasonably clear picture of the most mundane of accounting measure movements. All for a rather unpopular player whom the Jets are still obligated to pay. Great reporting was needed on a rather ho-hum story.
There’s been no chatter in the press, no FO announcements about any of these goings on with VG. Very quietly done by the Tanny Man. Very respectful of VG and VG’s team. Almost as if Tanny didn’t want to burn any bridges here. So, he can do it; this approach is clearly within Tanny’s arsenal.
Compare and contrast this with Tanny’s approach in his dealings with TJ/Leon/Coles/Baker/Kendall, etc.
Very public. Very harsh on the player. Almost as if a decision had already been reached, which lead the team to offer something the player HAD to refuse. This can give every appearance that Tanny’s negotiating stance is merely to grease the public skids for shedding a still-popular player.
Could this be the basis of “Tanny’s MO”? The team does plenty in secret that we don’t hear about or hear about long after the fact.
Might it be that ANY public negotiating posture on Tanny’s part is a fait accompli?
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Eddie DiGio says:
Denis
I agree about the Ellis cut…Ive said the same thing on here and was told to drink a tall glass of “shut the F@ck up”…
Cutting Ellis would be the STUPIDEST thing the Jets could do right now…there is NO ONE out there who is even as close to being as good as Ellis is…
KEEP THE BIG KAT FOR ONE MORE SEASON
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mole57 says:
miket,
The difference is that Kendall, Keels, Baker, etc. went to the press to argue their side. Tannenbaum had no choice then. VG’s people didn’t go to the press because, quite frankly, all they would get is scorn. Different scenarios require different responses.
Bent, you have an amazing ability to take these complicated contracts and not only break them down but to write about it in such clear manner that the average sports fan understands. Kudos.