A William Borgen buyout spans 2 years, has a cost of $300,000 and savings of $600,000. Borgen is 25 years of age at the time of the buyout; therefore, the buyout ratio is 1/3. With $900,000 in salary remaining, the cost is $300,000, and the savings are $600,000. Buyouts span twice the length of the remaining years and because there is 1 year remaining in the contract, the buyout length is 2 years. The buyout cap hit is displayed in the Cap Hit Calculations table below.
|BUYOUT DATE||BASE SALARY REMAINING||S.BONUS REMAINING||YEARS REMAINING||BUYOUT LENGTH||AGE||BUYOUT RATIO||TOTAL COST||TOTAL SAVINGS||ANNUAL COST|
|Jun. 15, 2022||$900,000||$0||1||2||25||1/3||$300,000||$600,000||$150,000|