Panthers Restructure Three Contracts to Gain Cap Space


The Carolina Panthers began the process of attempting to navigate a poor salary cap situation by restructuring the contracts of RB Jonathan Stewart, C Ryan Kalil, and LB Thomas Davis. The Panthers are following a similar model with their players at this stage using the voidable contract year for the sake of short term cap compliance. It’s a similar method used (or maybe abused is the better word) by the Dallas Cowboys, Washington Redskins and, in the past, the Oakland Raiders. The Panthers will need to bank on large salary cap increases in the future to offset the additional dead money or lack of contract leverage they will have with these players.

Stewart was restructured for the second time in two years. He converted $715,000 of base salary to go along with a $6.875 million bonus that was already in his contract. To reduce his cap charge they added a voidable season in 2018 to allow the bonus to prorate over five rather than four years. The team saved just over $900,000 in the restructure.

Restructuring Kalil is also an annual endeavor for the Panthers as he takes a big prorated bonus in lieu of salary for the second time in two years. Kalil already had one voidable season in his contract and now they added a second one to allow for longer proration of salaries. It saves the Panthers just over $3.1 million in 2014, but increases his cap in 2015 to nearly $11.8 million. With over $12 million in dead money in the contract next year the Panthers have basically assured Kalil of a lucrative contract extension in 2015. The Center market had pulled back considerably since the Panthers signed Kalil to the top contract at the position but he will likely set the market again because of the leverage he holds with Carolina.

Davis’ restructure might be the most controversial of the three. Davis has battled injuries in the past and the Panthers added three voidable years to his contract. The team had the right to pay him a $2.5 million bonus to extend his contract this year, which would have been prorated over two seasons, but instead they converted salary into a bonus on top of the option and prorated it over five seasons. He receives a $5 million bonus and that reduced his cap charge by $2.25 million. However his 2015 cap now jumps to just over $10 million with his dead money increasing to $5.57 million.

The Panthers find themselves in a difficult spot because the contracts that were signed by the prior General Manager were very player friendly, but the team also exceeded expectations in 2013, making it more difficult to consider eating a year for cap purposes in 2014.

Carolina arguably has the worst salary cap outlook of any team in the NFL moving forward. The team has around $102 million committed to the 2015 salary cap with just 29 players under contract. Those players do not include QB Cam Newton or DE Greg Hardy, two mega ticket items. Newton will either be playing on the transition tag number or on a contract that pays in the $16-$18 million a year vicinity. Hardy will be one of the highest paid defensive ends in the NFL. So this restructuring of deals is a juggling act the team will likely have to continue to do next season if they keep both players.

If the cap is $130 million this year the Panthers should have $18 million or so in cap to work with.  That is enough to franchise tag Hardy around $13 million and try to work out a contract extension. I have seen the reports about Carolina being nearly $29 million under the salary cap but at this time none of my estimates have the number that high. I’ll see if I can find out if any other changes occurred to the Panthers cap in the last few days to push it that high.




Panthers Save $4.26 Million in Cap Space With Charles Johnson Restructure


It appears as if the Carolina Panthers have restructured the contract of DE Charles Johnson late last week, converting his remaining base salary into a prorated bonus.  Johnsons salary was reduced from $6.75 million to $715,000 for the remainder of the season. Johnson’s new salary cap number is $8,740,000 which amounts to $4.26 million in savings.

The restructure will increase his cap figure in 2014 to $16.42 million and his dead money to $16.26 million. In 2015 his dead money increased from $6 million to $8.84 million while his cap rises to $17.42 million.

If I hear anything else on the contract and why they needed the extra cap space I will pass it along.

View Charles Johnson’s Contract and Salary Cap Page

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Looking Back at the Panthers Restructuring of Contracts


I had a request from Rachael to glance over what the Panthers did to maneuver themselves out of cap trouble and get to $12.8 million under the salary cap and what ramifications those moves will have in the future. Primarily the concern here was the restructuring of a number of deals to be cap compliant. So, based on the information I have, which I hope is accurate, here is an overview of what they did and some thoughts on the moves.

Ryan Kalil– the Panthers opened up $3.6 million in cap by converting $4 million of his base salary into a signing bonus and adding a voidable year onto his contact for proration purposes. The move adds $550,000 to Kalil’s top of the market cap charges in each season and will leave the Panthers with an additional $1.8 million in dead money that will hit the cap either when his contract voids in 2017 or whatever year he is cut. The cost to cut him in 2015, the year in which he turns 30, increases by $2.9 million dollars.

Haruki Nakumura– Was set to earn $1.3 million in salary. His restructured deal  reduced his base to $715,000 and included a $65,000 signing bonus and $35,000 workout bonus. In return for the paycut the Panthers agreed to void Nakumura’s contract following the 2013 season. This saved the team $517,500 in 2013 cap space and will only add $32,500 to next years cap. Barring an extension, Nakumura will count for $365,834 in dead money in 2014. The team should be able to find a low cost veteran safety to replace him next season making this a positive cap move.

Greg Olsen–  The restructuring of Olsen’s deal opened up $2.4 million in cap space. To do so the Panthers converted $3 million of base salary into an option bonus and added two voidable seasons for proration purposes. By using the void seasons the Panthers locked themselves into $1.2 million of dead money unless he is extended before 2016. Olsen’s cap will increase by $600,000 in 2014 and 2015.

Jordan Gross– This was a big, and perhaps questionable, move. Gross was set to count for $11.7 million in cap with a base salary of $8.7 million. Gross accepted a paycut from $8.7 to $5.5 million which would have been a reasonable $3.2 million in savings in 2013. However, Carolina freed up a whopping $6.8 million of cap room by adding four voidable years onto the tail end of Gross’ contract to mitigate the effects of a $4.5 million dollar signing bonus.  Had Carolina not made the move Gross’ dead money in 2014 would have only been $2 million. Instead they will take a $5.6 million dollar charge for a player not on the roster. When you factor in the cost of tackle, even in a depressed market, the Panthers stand to have significant cap charges associated with the position next season.

DeAngelo Williams– Williams did not take a paycut in 2013, but did take one for future years, reducing his 2014 and 2015 base salaries from $5.75 and $6.75 million to $1.85 million a season. They also added a $1 million dollar option to the 2015 season for Williams. To give cap relief this season the Panthers again turned to the void clauses, tacking on two additional void seasons for the purposes of prorating a $4 million dollar signing bonus in lieu of $4 million in base salary in 2013. The void year provision saved the Panthers $3.2 million in cap room this year. His 2014 cap figure dropped by $3.2 million as well, but with dead money charges rising from $6.4 to $9.6 million the Panthers essentially guaranteed Williams a spot on the 2014 team, despite the fact that he fell out of favor with the club in 2012.  He will be cut in 2015 due to the option bonus which will leave them with $5.6 million in dead money.

If we play the old contract out he likely would have counted $8.2 million against the cap this year and then would have been cut in 2014 at a dead charge of $6.4 million, making the total bill for Williams $14.6 million in cap over two years. Under the new structure he will count for $11 million in cap charges over the next two seasons and then $5.6 million in dead money in 2015. That is a total of $16.6 million.  Considering he could have been designated a June 1 cut in 2014 to split the $6.4 million across two seasons I can’t really understand the reasoning behind this move unless they expect a major resurgence from a 30 year old running back.

Jon BeasonWe covered Beason’s restructure earlier today in which he saved the team a little over $3.3 million. Unlike the other contracts no bonus money was put into this contract. This was a pure paycut.

Final Conclusions

All told the Panthers freed up $19.83 million in cap space  in 2013 via the restructure/renegotiation mechanism. The cost of those moves will be felt in the future as the team has now locked into $9.032 million in dead money that did not exist before the season. The dead money impacts future decisions for players like Kalil and Williams and may tie the Panthers into players for a longer time than they would like. The average dead money per team in the NFL this year is around $9 million so the Panthers essentially locked in a whole seasons worth of dead money via the void clause use.

The challenge in proceeding with this type of contractual system is not the short term gains but the long term implications. Despite all the chopping of salary the Panthers cap next year remains right near the limits for the NFL putting them right back to square one and needing to get back in and restructure more deals. The last thing a team wants is to have players going into their 30’s and have a dead money situation where their spots are essentially protected. The NFL is a young players league and the voidable years and high prorated money charges for veterans can provide for a tough cap situation.

The Panthers have a terrific young star playing Quarterback that is going to earn anywhere from $17 to $20 million a year starting in 2015. They have to get everything in order and convince him that they are going to be able to upgrade the talent around him by that time. That may be difficult if this restructuring path becomes the norm for the franchise.

Details on Jon Beason’s Restructure


I received a lot of questions on this yesterday due to conflicting reports. I have the details of this restructure so here are the details for the savings on the contract and how the contract itself works.

Beason was scheduled to count $9.5 million against the salary cap. That total was comprised of a $5.25 million base salary, $4 in million prorated money, and a $250,000 workout bonus. The prorated and workout bonus money were already sunk costs and are maintained on the salary cap under any restructure.

Beason’s base salary was cut from $5.25 million to $1 million, which was fully guaranteed. Beason also received a roster bonus of $500,000 paid almost immediately, essentially making it guaranteed. Beason has $2.25 million in incentives in the contract that he can unlock. $1.75 million of incentives are tied to games in which Beason is on the active 46 man roster. What that means is for every week Beason suits up to play he will earn $109,375. If Beason is selected to the Pro Bowl he will earn another $500,000 incentive.

For salary cap purposes both incentives are valued according to the rules of the CBA, which value the incentives based on the prior years performance. Beason was active for 4 games in 2013 so $437,500 of the $1.75 million dollar roster bonus counts towards the salary cap as of today. The remaining $1,312,500 is treated as if it will not be earned and does not currently count against the cap. Once earned that money will immediately count against the cap, which means the Panthers will want to carry at least $1.3 million in space to account for Beason. Beason did not make the Pro Bowl last season and his $500,000 PB incentive is strictly NLTBE. The accrual of that bonus, if earned, does not occur until after the season ends. If earned the Panthers will have a downward adjustment on their cap limit for next season.

The restructure saved the Panthers $3,312,500 in cap room. The remaining seasons of Beason’s contract remain untouched. His cap figure in 2014 remains $10.75 million so, unless he plays at a very high level, expect his contract to be an open discussion again next offseason. Beason’s dead money figure is $8 million in 2014, an extremely high figure, making it advantageous to both sides to work something out. This contract renegotiation was fair for both sides and should show a willingness to compromise in the future.

Beason had signed a $50 million dollar contract extension in 2011 with $20 million in full guarantees. He has only played in 5 games since signing his contract, rupturing his Achilles in 2011 and suffering through knee and shoulder problems last season. If healthy, Beason took a paycut of $2 million for the season. If not healthy the paycut could be as much as $3.75 million. The Panthers now have around $12.8 million in salary cap space, money that they will most likely earmark for carryover to 2014 to offset some of the larger cap charges next season. Carolina is projected to be right around the 2014 cap limit without the carryover.


Best & Worst Contracts: The Carolina Panthers


A few weeks ago Jason LaCanfora published a list of best and worst contracts in the NFL so I thought it might make a good idea for us to do the same here at OTC, with a team by team approach. I’ll try to be a bit more analytical in terms of why money was paid and how it fits in the market, but the general premise is the same. The one key difference is outside of restructured rookie contracts under the old CBA we will only use veteran contracts as there is a big difference between best draft picks and best contracts.  Please note that there is a difference between a bad player and a bad contract when discussing some of the selections. Clicking on a players name will take you to his salary cap page.

dwan edwardsBest Contract: Dwan Edwards

There are a handful of teams where this is a difficult category and the Panthers are clearly one of those teams. From a cap management perspective the Panthers were run into the ground by former GM Marty Hurney, specifically regarding a number of decisions made post lockout in 2011 and 2012. It has left new GM, Dave Gettleman, in a difficult position. Gettleman comes from a system in New York where cap space is created by identifying poor leverage players for paycuts or turning salary into bonus money for more productive players.

In many ways it is similar to the situation in Dallas, where there are talented pieces to the puzzle with loads of stacked up prorated money and player friendly contracts. Perhaps that talent level has been enough to determine a course of action as Gettleman has gone the salary into bonus route, in many cases adding void years for proration purposes that do nothing but hurt the team in the future. This style of contract in part helped destroy the Oakland Raiders and will likely do the same to the Cowboys. I believe the Panthers have at least 5 players with voidable proration years in their contracts.

That really limits the talent pool to select good contracts from. For example Greg Olsen’s contract was not terrible but the void provisions are just unnecessary for such limited cap savings. So all things told I selected Edwards. He plays a lot of snaps and is a decent player. The contract was designed for an older player with a short term future and not incredibly impactful cap charges in 2014 if, indeed the Panthers do move on. The Panthers originally wanted Edwards on a 1 year contract but the structure of the deal is a fair enough compromise and gives them a relatively low cost option if he remains the starter for the team over the duration of the contract.

jonathan stewartWorst Contract: Jonathan Stewart

For me this was a no brainer. In a league where the NFL has devalued the running back so much the fact that the Panthers were willing to sink over $7 million a season into Stewart, just a year after throwing away over $8 million a year on DeAngelo Williams and a few months after signing Mike Tolbert , was mind boggling. Even if you take Williams and Tolbert’s salaries out of the equation there was almost no justification for the deal.

Leading up to the contract Stewarts had only once carried the ball more than 200 times in a year. Only once had he gained more than 1000 yards. He had never been the dual threat many running backs are at the position. But somehow he ended up in the top 10 in compensation at the position. The deal contained $23 million in vesting guarantees. It completely compromised the entire teams salary structure.

The contract was a mine field.   Stewart received a large signing bonus of $9 million dollars and was scheduled to earn a non-guaranteed option of $9 million in 2014. Those types of prorated charges make it impossible to cut a player and for a running back you cant have those dead money charges looming over your head. It was those large bonus structures that helped change the course of the NFL in the mid 2000’s when running back after running back broke down and compromised a teams salary cap. The Panthers never got the message.

The Panthers did have a small window to release Smith this past season, but they had already sunk so much money into him that instead they restructured his bonus money to help ease the back end salary cap considerations. He received $2.5 million as a signing bonus in 2013 with $6.875 waiting for him in 2014. Because they did not move on $4 million in injury only guarantees in 2014 and 2015 vested, meaning any attempts to cut Stewart in the future would cost the Panthers $4 million in cash and cap. Had they just cut him after the dismal 2012 season their cap hit would have been $7.2 million the remaining proration form the $9 million dollar bonus and he would have been off the books by 2014.

With guarantees and bonus money coming Stewart will likely be a fixture in Carolina until the 2016 season at which point the June 1 designation may come into play to help ease the high dead money costs.  This is one of the worst contracts in the NFL from a team perspective. It is a deal that will eat cap room for years and there is no easy path for escape. Barring a major turnaround the team will need to look into every avenue possible to avoid next years bonus payment from happening. That will be a tall task for the Panthers to accomplish given the circumstances.

Check out Our Other Best & Worst Contract Articles

AFC East: Buffalo BillsMiami DolphinsNew England PatriotsNew York Jets

AFC North: Baltimore RavensCincinnati BengalsCleveland BrownsPittsburgh Steelers

AFC South: Houston TexansIndianapolis ColtsJacksonville JaguarsTennessee Titans

AFC West: Denver BroncosKansas City ChiefsOakland RaidersSan Diego Chargers

NFC East: Dallas CowboysNew York GiantsPhiladelphia EaglesWashington Redskins

NFC North: Chicago BearsDetroit LionsGreen Bay PackersMinnesota Vikings

NFC South: Atlanta Falcons, Carolina Panthers, New Orleans Saints (July 26)


Panthers Restructure Contract of C Ryan Kalil

Pat Yasinskas of ESPN has reported that the Panthers have restructured the contract of Center Ryan Kalil to better navigate the 2013 salary cap. Kalil was set to earn an option bonus this year of $5 million dollars to go along with a base salary of $4.75 million and a $250K workout bonus. If the Panthers failed to exercise the option Kalil’s base salary would have risen from $4.75 to $9.75 million dollars. His cap number, if the option was picked up, was $9.850.

Kalil’s base salary was reduced to $750,000 in the restructure with $5 million being given in the form of a signing bonus, as reported by Yasinskas. Yasinskas noted that his new cap figure would be $6.4 million which represents a savings of $3.45 million for the Panthers. For proration purposes the Panthers have added an extra season onto Kalil’s contract in 2017, which is simply going to be a “dummy season” for salary cap purposes. While I do not have confirmation of the actual mechanism used, Kalil either received a $4 million dollar option or fully guaranteed offseason bonus that will be prorated over the remaining 5 years of his contract.

Per rules in the CBA roster and option bonus money can only be recovered in the year that the bonus is awarded in the event a player holds out or commits a similar type of fine worthy offense. Signing bonus money can be attacked at any time. This is most likely why the two sides would simply not have a $9 million dollar signing bonus in the contract as it protects the player’s money from further attack by the team.

The Panthers salary cap is in terrible shape due to a number of bad contracts signed over the past two years that were very favorable towards the players. This is going to be another one. Based on my estimates Kalil will carry a cap charge of over 11 million in 2015 when he turns 30 years old with a dead money charge of $9 million dollars. For a center to have cap charges in 3 consecutive years of over 9.55 million is almost unheard of in the NFL, meaning that the Panthers will likely be forced to renegotiate again in the future with Kalil regardless of his level of play.

To view the new estimates for Kalil simply follow this link to his cap page.