Rule Change: Frontloading
Jul 31, 2023 12:32:21 GMT -5
Post by Brian (Blue Jays GM) on Jul 31, 2023 12:32:21 GMT -5
In thinking about how our rules are playing versus how they were intended, it's become a concern that teams are able to make entire future cap commitments disappear by frontloading them to the current season when covering salary. While we do want to give teams financial flexibility, we also want to keep teams accountable for their future financial commitments when signing free agents.
Beginning with contracts signed in the 2023-24 off-season, teams will only be allowed to frontload up to $10 million of salary coverage per season on an individual contract, and each individual player contract can only be frontloaded once. This includes both future salary covered in trades and future salary retained in buyouts. Contracts signed during the 2023-24 offseason will follow this new rule immediately, and contracts signed prior to the 2023-24 offseason will be grandfathered under the previous rules for 1 year until the start of the 2025 league year. Beginning in 2025, all contracts will follow this new rule.
For example, let's look at a hypothetical scenario of a player signed to a 4 year $30 million contract with Team A. Team A decides to trade the player to Team B in year 1 of the contract, covering $20 million per year for the remaining 3 years of the contract (there are no limits on coverage, only frontloading). Team A can frontload up to $10 million per year for each future year of the contract to a previous year, meaning up to $30 million of cap hits can be frontloaded. If team A frontloads the max $30 million to year 1, they are therefore still responsible for $10 million per year of coverage in years 2-4 of the contract, and team B is responsible for the remaining $10 million per year. Team B is welcome to trade the player to Team C at any point for the duration of the contract, but can not frontload any additional salary coverage since each individual player contract can only be frontloaded once.
As a result of full frontloading being available on existing contracts for 1 more season, we have elected to keep the salary cap flat at $160 million for the 2024 season. Once the frontloading limit is fully in place, we will raise the cap to 165 million for the 2025 season.
Beginning with contracts signed in the 2023-24 off-season, teams will only be allowed to frontload up to $10 million of salary coverage per season on an individual contract, and each individual player contract can only be frontloaded once. This includes both future salary covered in trades and future salary retained in buyouts. Contracts signed during the 2023-24 offseason will follow this new rule immediately, and contracts signed prior to the 2023-24 offseason will be grandfathered under the previous rules for 1 year until the start of the 2025 league year. Beginning in 2025, all contracts will follow this new rule.
For example, let's look at a hypothetical scenario of a player signed to a 4 year $30 million contract with Team A. Team A decides to trade the player to Team B in year 1 of the contract, covering $20 million per year for the remaining 3 years of the contract (there are no limits on coverage, only frontloading). Team A can frontload up to $10 million per year for each future year of the contract to a previous year, meaning up to $30 million of cap hits can be frontloaded. If team A frontloads the max $30 million to year 1, they are therefore still responsible for $10 million per year of coverage in years 2-4 of the contract, and team B is responsible for the remaining $10 million per year. Team B is welcome to trade the player to Team C at any point for the duration of the contract, but can not frontload any additional salary coverage since each individual player contract can only be frontloaded once.
As a result of full frontloading being available on existing contracts for 1 more season, we have elected to keep the salary cap flat at $160 million for the 2024 season. Once the frontloading limit is fully in place, we will raise the cap to 165 million for the 2025 season.