Eric Wright Signs For Minimum Salary Plus $1

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Yesterday the San Francisco 49’ers signed CB Eric Wright to a one year contract, which was noteworthy because they traded for him a few weeks ago only to nullify the trade based on a failed physical. His contract numbers came in today and I thought that they were a bit interesting.

Wright essentially took the minimum salary for a player with 6 years of service in the NFL, which is $715,000. Normally when one signs for that number their contract qualifies for the Minimum Salary Benefit, which allows you to pay a veteran player the minimum salary but only take on a cap charge of $555,000 in 2013.

Seemingly to avoid Wright’s contract from qualifying for that treatment the 49’ers gave Wright, according to NFLPA records, a salary of $715,001. The one extra dollar disqualifies the contract from being treated as a qualifying contract and thus he will carry a cap charge of $715,001 rather than $555,000.

Other teams have done this in the past. I remember the Jaguars doing it for someone simply because they needed to use cap dollars to comply with the salary cap floor of the old CBA. New England did something similar with WR Anthony Gonzalez last season. Why do such a thing?  The answer likely lies in the potential upside of the player. For an older player on a Qualifying contract, like Calvin Pace of the Jets, there is no upside. The player is at the end of his career and is never going to get a big contract again.

Wright is a different case. He is only 28 years old and just one year removed from signing a five year, $37.5 million dollar contract with $15 million in guarantees. He has the talent to be a long term contributor. Once you sign a qualifying contract the CBA does not allow a team to extend or renegotiate the player’s contract, even after the season ends. While there is an exclusive negotiating window between player and team it is only applicable to a one year extension for the MSB.

In essence if Wright signs for the MSB he is going to hit free agency in 2014 and the 49’ers would need to compete with 31 other teams for his services.  By taking the extra cap charge for just $1 dollar in additional cash payouts the  49’ers maintain an in-season negotiating window plus a February/early March period where they can extend him at any reasonable price the two sides agree upon.

The $715,001 salary represents the second paycut for Wright this season. Wright was originally scheduled to earn a fully guaranteed $7.75 million with the Buccaneers in 2013, but his suspension in 2012 voided the guarantee. He renegotiated his contract to reduce his salary to $1.5 million with a chance to earn an additional $1.5 million in incentives. That potential $3 million dollar contract was what the 49’ers originally traded for. Unless there are hidden costs to this contract that I am unaware of (and I’ll update you if I hear anything on that) he will now earn a maximum of $715,001 for the season, a far cry from the $7.75 million he was supposed to earn this year.

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Explaining the Minimum Salary Benefit

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Imagine for a minute that you are an NFL GM who knows that cap dollars are limited when building a roster. On one hand you can sign a veteran who is likely on the downside of his career, perhaps well on the downside, for around $1 million or instead sign a relatively unproven young player for around $500,000. The young player has more upside and can play special teams but could also be a total flop. In many cases the deciding factor is simply money. The $500,000 gamble on the older player still being capable isn’t really worth the time of the NFL team.

Veterans at the end of their career would likely play for less money just to get a chance to keep playing but the CBA mandates that they make a minimum salary level, ranging in 2013 anywhere from $715,000 to $940,000. Essentially the veteran is hurt by the CBA. To try to level the playing field, the NFL and NFLPA agreed on a clause called the Minimum Salary Benefit (MSB), essentially taking the salary cap consideration out of the equation. What the MSB does is bring the veteran players salary cap charge attributed to his CBA mandated P5 base salary down to that of a player who has been in the NFL for just two seasons with the difference being charged to Player Benefits.

All players with at least 4 credited seasons are eligible for the MSB. However, to qualify for MSB treatment your contract has to meet specific criteria, explained as follows:

  1. The contract must only be 1 year in length
  2. Additional compensation can not exceed $65,000 in 2013 (this number rises by $15,000 every 3 years, with the next increase set for 2015), and that includes bonuses from other teams
  3. P5 guarantees can not exceed the P5 salary of a 2nd year player, which is $555,000 in 2013

Now there are some more technical rules as well in regards to being cut and re-signing with your old team but very rarely (if at all) does that come into play. A player can also sign multiple MSB contracts over the course of his career and even within a season with multiple clubs if he is cut. Most MSB players in 2013 will have a salary cap count of $620,000 as its pretty standard for the players to receive $65,000 in bonus money, but cap hits vary.

So how many teams are using the MSB?  Whil I don’t have an exact count I have a pretty good estimate from my records as to how many MSB players and how much money is being saved in the teams current top 51s. The Giants look to lead the way with 10 players and over $2.5 million in cap savings with the Saints lose behind with 8 players and just over $2 million in savings. Neither should be a surprise as both teams have cap problems but view themselves as win now teams.

Really lack of cap room is a major factor in signing such players. Of the top 8 teams all were teams with cap issues heading into free agency. The Chiefs who I ranked 9th created their own cap issues and need these players to fill out their roster. Of the teams in the top 10 I would say only the Jets and Bears are teams that are likely using the MSB not just for cap relief but because they don’t want to add multi-year contracts to teams in the need of a makeover. The other squads all think they can win now.

On the other side of the spectrum, surprisingly I don’t have any records of the 49ers or Falcons, both win now teams very tight on cap room, using it for any players. Overall I have 104 players qualifying, which is likely a few players off, but I’d say its safe to say the MSB saved around 100 jobs this year. Here is the full listing per my estimates which should be close but by no means will be perfect.

Team

Players

Savings

Giants

10

$2,525,000

Saints

8

$2,005,000

Bears

8

$1,690,000

Lions

6

$1,435,000

Steelers

5

$1,375,000

Panthers

6

$1,275,000

Jets

5

$1,275,000

Redskins

4

$1,240,000

Chiefs

6

$960,000

Vikings

5

$925,000

Buccaneers

4

$890,000

Seahawks

4

$765,000

Patriots

3

$730,000

Cardinals

3

$730,000

Titans

3

$670,000

Chargers

3

$605,000

Bengals

4

$605,000

Ravens

3

$605,000

Raiders

3

$605,000

Cowboys

2

$570,000

Bills

2

$545,000

Browns

2

$545,000

Texans

2

$445,000

Eagles

1

$285,000

Rams

1

$285,000

Colts

1

$160,000

49ers

0

$0

Broncos

0

$0

Packers

0

$0

Dolphins

0

$0

Falcons

0

$0

Jaguars

0

$0

Total

104

23,745,000

Average

3

742,031

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