What Happens When Calvin Johnson Retires

According to an ESPN report by Adam Schefter, Calvin Johnson has informed the Detroit Lions that he plans to retire rather than return for the 2016 season.  The Lions were likely going to have to make a difficult decision anyway on Johnson this year due to a $24 million cap charge but he may have made it easier on them by walking away. So what happens next to the Lions salary cap? I’ll explain the ins and outs of how a retirement works after the jump plus look at a conspriacy theory as to a unique way to use a retirement to leverage a better contract.

In general a retirement works similarly to a cut.  Once a player is placed on the reserve/retired list the NFL treats him as if he was released. For the Lions this means they will absorb either a $12.916 million salary cap charge in 2016 if the retirement is processed before June 1 or a $8.058M charge in 2016 and $4.858M charge in 2017 if processed after June 1. Given his $24 million cap number it would be logical to process it before June 1.

Once retired Johnson is not free to shop his services around the NFL should he decide to return at a later date. As long as he remains on the Lions retired list he will remain the property of the Lions if he decides to return.  Once he officially retires the Lions will also have an option to go after signing bonus money that had been paid to Johnson during the course of his contract.  Johnson received a $16M signing bonus wgen signing this contract and a $4.285M signing bonus later in the contract. It’s possible that the latter bonus may have had protection from recovery in the event of a retirement. These bonuses allow the Lions to recover $3.2M(Edit thanks to Matt for catching me flipping the option and signing proration) from the initial signing bonus and $857,000 in 2016 and 2017 from the smaller bonus if allowed. Johnson’s $20 million option bonus is not subject to forfeiture.

One would imagine given the team’s history dating back to Barry Sanders that the Lions would look to recover the money. If they did they will receive salary cap credits reflecting the refund in the 2017 and 2018 league years. In that sense the retirement gives the Lions much more financial flexibility.

However there should also be a concern for Detroit should Johnson demand to return to the club this year. It’s rare to see a player not only walk away from a $16 million salary let alone possibly having to pay $4.9million to do it. Sometimes retirements or threats of retirements can be used to help in contract decisions. Years ago we saw this with Brett Favre who retired (twice) only to unretire and then find his way to a different team. The Packers traded Favre in 2008 to the Jets following his return and the Jets released him after drafting a QB the following year and spending a good deal of money in free agency realizing a similar move would throw the team into chaos.

If Johnson were to return this summer the Lions would not only have his $12.9 million dead charge on the books but would then reinstate his $16M salary bringing his total cap number to nearly $29 million. Considering the Lions would have prepared all offseason for life without Johnson, this would put them in a position where they would be unable to keep him on the roster and comply with the cap. Johnson would gain a tremendous amount of leverage and they would have no choice but to release him or sign him to a new deal with very favorable terms. So if Johnson was really looking for a clean break from the Lions without having to ask for a trade this would be the way to do it. That would be a pretty impressive move by the player if it ever happened.

  • MattR

    If Johnson’s agent didn’t put language in the contract protecting the $4.285 million bonus from retirement forfeiture when Johnson converted it from base salary to a signing bonus in 2013 to provide the Lions with some cap relief, the NFLPA needs to strip his credentials. And if he let Johnson take a $12.75 million reduction in base salary in 2012 when he signed a contract extension without protecting a large portion of the corresponding $16 million signing bonus, then he needs to at least be sanctioned by them.

    PS. Since the signing bonus was in 2012, the Lions can only recover 1/5 of that, or $3.2 of $16 million.

    • Kevin78

      Agreed. I also don’t think it makes sense for the Lions to go after Johnson’s signing bonus. Johnson can basically force them to cut him by not retiring and refusing to negotiate.

  • Anders

    Is there a reason why the Lions could potential be double hit? Makes zero sense why a team should be punished extra from a player retire, when they are already punish once (the team might have constructed the contract in a way where his dead money would ruin the cap if cut/retire)?

    • eddiea

      When Johnson files fir Ret, the prorated bonuses automatically come due. If he decides he wants cont. playing his $16M salary comes due. So as was stated the Lions are screwed if he does/doesn’t play. It’s just easier if he retires and stays,at least this yr if that’s what he wants to do. It only gives them an extra $3M in actual Cap space though.

  • Werner

    Just to spin the thing forward: Could they put him on (unpaid) PUP, as he had not been in Camp and may not be ready for another 6 weeks to eat away 6 game paydays equal to 5′ and change Cap and Cash saved ?

    • rhoneyman

      why would it be unpaid? even on the pup, he’s still on the team under contract.

      • Werner

        It’s called Game Day Cheques and they only apply to Active Roster (53) and IR. PUP is more of the self inflicted kind of playing disability and allows the team to not pay him. There is a reason why JPP played hide and seek with NYG not to be placed there…

        • rhoneyman

          I’m pretty sure you’re talking about the NFI list, not the PUP. If a player is on the NFI list, it seems the team has the right to not pay the player and to place them on the non-football injury list. I’m don’t know what the timing rules are for the NFI list. But the PUP is for players who are still in recovery from legitimate injuries (i.e., injuries not incurred from activities contractually prohibited).

  • Werner

    In refererence to Antony Smith from the 49ers: If he comes back this year, does he jump back to the current pay in the contract year or does one year out relegate him to Minimum Salary ?

    • eddiea

      He comes back at Original Contract Salary,which doesnt seem fair. But with no bonus proration it’s easier to then cut him if he’s not worth keeping,but does put team in bind b/c they weren’t counting on having to pay him. Which messes up their Cap

  • Werner

    or should the Lions trade Johnson to be save. Worst case, if he truly retires, they return the pick. If he agrees the trade, the 16′ salary is off their books.Either way they’re off the hook, right?

    • McGeorge

      Trade him to whom and for what?
      He’s get a 16MM salary, teams may not want to pay that.

      CJ has them over the barrel. They can delay cutting him, and split the cap hit a little.
      Or just cut him now, so he can find a new team.
      Or he could take a pay cut, but why do that? Why not take a pay cut and play for a strong team, where he may be able to get a SB Ring. New England or Seattle or Carolina could be interested, if the price was right.

      • Werner

        The point was to “disarm” the 29′ Cap Hit threat. Say you deal him and a 2017 7th round pick for a 2016 7th round pick with a Team with abundant Cap Space. Leaves Detroit with 12′ hit and 16′ relief, not better or worse as in retirement case, bonus recovery included. Other Team has no obligation whatsoever prior to the 1st Game Day and reasonable leverage. They can keep him on the Roster until then, maybe even fine him for a holdout and keep him if he shows up in great shape. And Tuesday before 1st Game no other Team can take him on Waiver Wire…
        And all that options for the premium of a 7th Round Pick one year forward.

  • Kevin78

    I don’t see why the Lions would go after Johnson’s signing bonus money. They have to lower his cap hit somehow. He may be doing them a favor, especially since he could not retire and refuse to work with them. This would put them in position of keeping his 24 million cap charge or cutting him without the ability to recoup any bonus.