Wednesday, March 16, 2005

Does Red Know Something We Do Not?

From the day that prospective Vikings' owner Reggie Fowler announced his intention to buy the Vikings, something has seemed amiss about the entire affair. Rather, several things have seemed amiss. Not least of which is Fowler's ability to pony up the thirty percent of the purchase price--roughly $200 million--that the NFL requires of managing partners.

On Wednesday, several media outlets--local and national--reported that Fowler has yet to complete the sale of a business interest--a sale that is critical to Fowler's prospects to serve as managing partner of the group that he has gathered to purchase the Vikings. With the media often the last to know of ill-fated purchase offers, does Red know something that we do not? If so, for how long has he known?

Paper Trail

Dating to the trade of Randy Moss to the Oakland Raiders, a trade that post-dates the agreement-in-principal between Red and Reggie to sell/purchase the Vikings, there have been ominous signs that Red is, at a minimum, hedging against a possible NFL rejection of the sale of the Vikings to the Fowler group. And, to relieve us of the need to speculate too much, Red has offered a tidy paper trail.

The trail begins with the Moss deal. I have written at lenght about the merits of, and the personnel involved in this deal, but have said little about the numbers. But the numbers in the deal might prove to be the most interesting element of the trade.

By trading Moss, the Vikings accelerated approximately $10 million of money that would have remained prorated over the remainder of Moss' contract, had Moss remained with the Vikings. That meant that the Vikings took a $10 million hit to their salary cap for 2005. After factoring in the loss of Moss' 2005 salary and the addition of Napoleon Harris' salary, the Vikings lost approximately $4 million in cap space as a result of the trade.

At first blush, one might be tempted to conjecture that the trade was about getting closer to the salary floor. While it pushed the Vikings in that direction, the team was so far under the NFL salary floor even with the trade that the trade barely put a dent in the chasm between the Vikings' 2005 team salary and the NFL salary floor. That fact created even more suspicion that there was much more going on with this trade with respect to finances than met the eye.

And if fans were not yet convinced that Red was at least hedging his bet that he might be stuck with the Vikings in 2005, Red provided additional ammunition when he essentially denounced the trade, even though he clearly had signed off on the deal. The only conclusion remaining was that Red was trying to throw off the scent.

But what would Red gain by the trade of Moss? Not much if the Fowler deal went through or if he retained possession of the Vikings over the long haul, but plenty if the Fowler deal fell through and Red still envisioned selling the team to another suitor, like Glen Taylor, within the next year or two.

Under a scenario in which the Fowler proposal falls through and Red is compelled to negotiate a sale to another group sometime in the next year or two, Moss' contract would prove weightier than necessary for Red. With season tickets already sold out for 2005, Red could weather the fan backlash for moving Moss for mere profit motive for at least one season, perhaps two.

And the profit motive is cognizable. By dumping Moss' contract now, the Vikings take a one-time hit to their salary cap. But in 2006, that one-time hit becomes, in essence, a credit. With Moss' contract no longer counting against their cap, the Vikings will shed approximately $14 million from their cap in 2006. That would make the team just as attractive to a prospective buyer next year, if not more attractive, than is the case today.

Moreover, while moving Moss means a one-time hit to the Vikings 2005 salary cap number, in real terms, it represents a significant savings to whomever owns the team in 2005 and for the life of Moss' contract. Rather than paying Moss' 2005 contract, the Vikings will be paying Napoleon Harris' 2005 contract. That's a significant discount to whomever owns the Vikings come paycheck time. Undoubtedly, that is not lost on Red. And it makes one wonder if Red suspects that he will be the beneficiary of such largesse in 2005.

More Paper, More Trails, Three Hands?

But Red's position has been difficult to gauge. On one hand, he was making a deal that would benefit whomever owned the Vikings in 2005. Given Red's "me-first" qualities, the suspicion was that that beneficiary would be Red.

On the other hand, Red was asking prospective free-agent signees to defer rights to signing bonuses until this summer, at which time, it was presumed, ownership of the Vikings would pass to the Fowler group. And that looked like Red, again in the "me-first" mode, sticking it to the new owner.

But then came the third hand. Under the terms of Jermaine Wiggins' deal with the Vikings, Wiggins will defer part of his signing bonus to June 2006. That means that Red is free of any obligation to pay that portion of the bonus if he does not own the team in June 2006. And that would save Red a bit more money.

Then came word that the Vikings recent signee, Darren Sharper, inked a deal that includes a friend from last season, a roster bonus. The roster bonus, which counts entirely against the 2005 cap and permits the Vikings to inch closer to the salary floor (I think I can, I think I can, I think I can...), relieves the Vikings of having to make additional offers that include additional bonuses. And that all saves Red money should the Fowler deal collapse.

The recent news out of the NFL offices makes the Fowler deal appear as shaky as ever. If the deal does not go through, there is a growing paper trail to suggest that Red all along was hedging his bet in the event that the Fowler bid collapsed. That will raise fan interest over the details of the Moss trade even more, and also will raise concerns about the leadership of this team under current ownership--something that will only elevate increasing fan resentment of Red.

Up Next: More Draft Talk. Plus, is there an undiscovered gem in free agency?

22 comments:

lichty said...

VG:

Although your scenario of bet hedging is plausible (and probably advisable), can there be any question that Red at least thinks that there is a good chance the deal gets done?

What does Red have to gain by instead of pushing up Taylor's bid by negotiating with Fowler and creating a "bidding war", he simply accepts the Fowler offer?

If the Fowler offer falls through, Taylor will be in a much better position than had been in a bidding war with Fowler.

With Fowler out of the picture, and Taylor as the only realistic suitor, REd loses leverage (except for keeping the team - god forbid).

Thus, unless I am missing something, there must have been something there with Fowler offer or Red would have been hurting himself by taking it.

Vikes Geek said...

Lichty,

I think we are in agreement, we are just discussing two different timelines.

Like you, I believe that Red wants to have the deal with Fowler go through and that Red believed, when he agreed to the deal, that Fowler had the means to make the deal happen.

My argument is that, since reaching an agreement in principal with Fowler to sell the team, Red has been given reason to believe that Fowler is not able to put the deal together. As a consequence, Red is hedging.

A more nefarious possibility, however, is that Red and Reggie agreed to the Moss trade with the goal of leaving the Vikings in about the same cap position they are in now when 2006 rolls around. Reggie would then rely on his difficulties getting a stadium deal and Red's bonus burdens to justify spending only to the floor in 2006, while remaining free of at least one onerous contract.

VG

bird said...

Cowart's on board now--VG, this addresses your oft-noted need for a veteran MLB. I think he's probably in the Sharper category, a little past his prime but still a significant upgrade. I know a few years ago, he made a lot of tackles but has since had a few injuries. In any case, if he's healthy he should at least be in position and be able to direct the d. A respectable defense next year--hard to remember the last time you could say that.

Now if they can just overcome the poor coaching.....

Vikes Geek said...

Bird,

I like the Cowart deal (though I have yet to see the terms).

Don't get me started on the coaching staff, I might never stop.

VG

fast cash advance0e said...

Fine blog. I found your site suitable for another
visit! And when I'm able to surf the web, I look for
blogs as great as your work.
Want to see top notch work, peep my cash advance credit card blog site for the bomb work!

day trading course said...

Very interesting blog.

Regards,
Emini Futures Day Trader
day trading course

daytrading system said...

An interesting read...

Regards,

Emini Daytrader
daytrading system
daytrading system

daytrading course said...

An interesting read...

Regards,

Emini Daytrader
daytrading course
daytrading course

electronic day trading said...

An interesting read...

Regards,

Emini Daytrader
electronic day trading
electronic day trading

daytrade said...

Enjoyed reading your blog.

Regards,

Active Daytrader
daytrade
http://www.daytradingcourse.com

day trading education said...

Very interesting blog.

Regards,
Emini Futures Day Trader
day trading education

day trading education said...

An interesting read...

Regards,

Emini Daytrader
day trading education
day trading education

Emini Day Trader said...

Good info. Thanks.

Regards,
Mini-DOW Futures Day Trader
day trade future
http://www.daytradingcourse.com

Emini Day Trader said...

Interesting blog. I can see that you've done a lot of work on it.

Regards,
Emini Futures Day Trader
simplified elliott wave
http://www.daytradingcourse.com

TradingCourses said...

Good info. Thanks.

Regards,
Mini-DOW Futures Day Trader
emini russell
http://www.daytradingcourse.com

Emini Day Trader said...

A good read. Thaks for all the good info.

Regards,
Mini-DOW Futures Day Trader
emini future trading
http://www.daytradingcourse.com

TradingCourses said...

Great blog. Nice job you've done here.

Sincerely,
Daytrader
day trading video
http://www.daytradingcourse.com

Emini Day Trader said...

Nice blog. Keep up the good work.

Regards,
Emini Daytrader
emini trading system
http://www.daytradingcourse.com

TradingCourses said...

Great blog. Nice job you've done here.

Sincerely,
Daytrader
daytrade
http://www.daytradingcourse.com

Emini Day Trader said...

Great blog. Nice job you've done here.

Sincerely,
Daytrader
day trading video
http://www.daytradingcourse.com

TradingCourses said...

Nice blog. Keep up the good work.

Regards,
Emini Daytrader
emini day trading
http://www.daytradingcourse.com

TradingCourses said...

A good read. Thaks for all the good info.

Regards,
Mini-DOW Futures Day Trader
day trading video
http://www.daytradingcourse.com