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Apr 02

Breaking Down the DeSean Jackson Signing and the Future of the Redskins

DeSean Jackson signed a three-year contract worth $24 million with the Washington Redskins today.

 

YearBase
Salary
Prorated
Bonus
Roster
Bonus
Workout
Bonus
Other
Bonus
Cap
Number
Dead
Money
Cap
Savings
2014$1,000,000$1,250,000$1,500,000$500,000$0$4,250,000$16,000,000($11,750,000)
2015$3,750,000$1,250,000$3,750,000$500,000$0$9,250,000$11,750,000($2,500,000)
2016$3,750,000$1,250,000$3,750,000$500,000$0$9,250,000$2,500,000$6,750,000
2017$8,000,000$1,250,000$0$0$0$9,250,000$1,250,000$8,000,000

via Jason—Jackson received a $5 million signing bonus and his 2014 and 2015 base salaries and workout bonuses are guaranteed. In addition, Jackson can earn up to $1.5 million in 2014 and $3.75 million in roster bonuses in 2015 and 2016 that are paid out as long as he is on any of the roster lists besides suspended or non-football injury. The 2017 season is a “dummy year” that is strictly in place to reduce the salary cap charges in the contract. That season automatically voids following the Super Bowl that year. Base salaries of the contract are $1,000,000(2014), $3,750,000(2015), and $3,750,000(2016).

Most media reports have Jackson receiving $16 million in guaranteed money. This $16 million figure comes from his $5 million signing bonus, $5.75 million combined in ’14-’15 base salaries and workout bonuses, $1.5 million 2014 roster bonus and $3.75 million 2015 roster bonus. I am not sure if those roster bonuses are officially full guarantees (as Jason has not yet received the paperwork), but for all intents and purposes they are.

 

What this means for DeSean:

Look at this deal as a two-year contract worth $16 million dollars. Jackson receives his second signing bonus in the past three offseason’s, and is now guaranteed to make $34 million over a span of four-years  ($18 million in 2012 & 2013 with Philadelphia and $16 million in 2014 & 2015 with Washington).

Looking at other wide receivers around the league, there aren’t many who have averaged $8.5 million over a four-year period. The list of guys who have recently accomplished this (or undoubtedly will in the next year or two based on the structure of their contact) includes just six names: Calvin Johnson, Larry Fitzgerald, Andre Johnson, Percy Harvin, Brandon Marshall and Roddy White. There are other young guys–such as AJ Green and Julio Jones–who will likely get there (or beyond), but of course you never know.

So for somebody who’s seemingly overly-consumed by the amount of money he makes, DeSean has done pretty well.

 

What this means for the Redskins:

It means DJax is locked into the Nation’s Capital for both 2014 and 2015, carrying respective cap hits of $4.25 million & $9.25 million. After 2015, the Redskins will have to quickly decide (by the beginning of the 2016 league year) if Jackson is worth a $9.25 million cap hit in a season where he’ll turn 30. If they decide he isn’t they’ll, be forced to eat $2.5 million in dead money.

It also means that Washington’s top three receivers—Jackson, Pierre Garcon and Andre Roberts—will count for $22.7 million against the 2015 cap. While this is quite a large cap number for a team’s receiving core to assume, this shouldn’t have long-term cap implications for the Redskins; all three players can be released with minimal cap damage after 2015.

However, some tough roster decisions may still lie ahead for Washington. The Redskins now have over $117 million in 2015 cap commitments, which of course doesn’t include a salary for Brian Orakpo, who was recently franchised and has not yet been signed to a long-term deal. RG3 should also be in line for a monstrous extension at some point in the near future (he’s eligible after this coming season). This is definitely a situation to pay close attention to in the future…


 

  • mike jones

    so the $16 million fully guaranteed number I kept hearing in the media was nonsense, as I suspected.

    • Ryan Feder

      As explained above by Andrew:
      Guaranteed Money
      Signing Bonus of 5 million plus guarantees in 2014 and 2015 as seen below.
      2014: 1million P5 + 1.5m Roster Bonus + .5m Workout Bonus= 3 million
      2015: 3.75m P5 + 3.75m Roster Bonus + .5m Workout Bonus= 8 million
      Total = 16 Million in Guarantees

      • mike jones

        but those roster and workout bonuses are only due if he is on the team on the execution date for those bonuses…unless I am misunderstanding something significant. if he is cut tomorrow, he only receives the signing bonus. maybe my disagreement is with the term *fully* guarantee that is thrown around so often.

        • Andrew Cohen

          you’d be right 99% of the time, but jason let me know that these roster bonuses are in fact fully guaranteed (an extreme rarity)

          • mike jones

            So I’m trying to think of a reason why you would structure it like this. The only thing I can think of is to keep cash level low this year. Surely Dan Snyder isn’t having cash flow issues. RFK stadium is a money tree I thought because of the parking and concessions. Did Jason say why it was structured like this?

          • Andrew Cohen

            Washington didn’t have the cap space to account for a 2014 hit that big…

          • mike jones

            It looks like they could have scrape under if the 16 million were prorated over 4 years with a guaranteed signing bonus. Just a $750k difference between this years cap and that hypothetical. Which is why I thought that it seemed like a cash maneuver.

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  • Alan Milnes

    @relcec:disqus – did you read the post?

    Question for Jason et al, why does the NFL allow these fake years – if it automatically voids surely it shouldn’t be taken into account for Cap purposes?

    • Ryan Feder

      I had been wondering about how these void years worked also and have done some digging. Essentially from a player-side, it gives them an out (in some K’s) to where if they severely out perform their deal it allows them to try and make more money again in FA. For example if a player enters Free Agency after a somewhat down year and the market dries up, if he regains his form… it prevents him from playing out the last few years of his K at a figure below what he should have been making.

      From a clubs side, I have found there are a number of different types of voids and the standard ones we hear about are usually very much more complicated than a simple, if X happens, it voids. Depending on the type of language used in the K will determine when the cap hit in a void year is taken. If it’s after June 1, it will more than likely be treated similar to a June 1 cut where it just sits as a dead money hit for that year, but in other scenarios it may accelerate into an earlier year.

      Clubs use it to just add an extra place holder-year of prorations. In this case because the Redskins were so tight up against the cap, even saving a small amount such as 416k per year (5m/4yrs instead of 5m/3yrs) gives them a little more breathing room this year.

      To make a long-story short, there is no simple answer to “how voids
      work”. It seems to be very club-specific as to which type of void
      language is used and for different purposes. I will work on trying to
      get a more definitive answer and hopefully put up a piece about it when
      if it provides some more clarity.

      • Alan Milnes

        Thanks very much – I understand why the Redskins would want it and why the Player would agree just wasn’t sure why the NFL would allow it so thanks for this.

    • mike jones

      I read the post, and the chart.
      Those roster and workout bonuses are only due if he is on the team
      on the execution date for those bonuses…unless I am misunderstanding
      something significant. If Jackson is cut tomorrow, he only receives the
      signing bonus. Maybe my disagreement is with the term *fully* guaranteed
      that is thrown around so often.

      • Ryan Feder

        Yes, you are misunderstanding this deal a little bit. Normally, a roster bonus that is NOT guaranteed is only due if he is on the roster at the execution date. In this case, they are fully guaranteed and the use of the roster bonus is there as a time for when that amount of his guaranteed money will be paid. If Jackson is cut tomorrow, because all of the money we have discussed making up the 16m is Fully Guaranteed, he will receive all of it.

        Fully Guaranteed means that by hook or by crook, Desean will be getting paid at minimum 16m dollars as a result of this contract

        What makes it fully Guaranteed is that it is guaranteed for Injury, Skill, and Cap. When there is a guarantee that is not termed ‘full’ it means that particular amount of money is only protected by one, or a combo of two of those designations.

        • mike jones

          so how is the the workout bonus fully guaranteed? it executes when workouts begin no matter if he is on the team or not?
          it seems like we need a different name or designation for the fully guaranteed bonuses that otherwise look exactly like roster and workout bonuses…

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