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Large cap savings could force Boldin out of Baltimore

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After hauling in 22 catches for 380 yards with seven touchdowns this past postseason en route to helping the Baltimore Ravens win Super Bowl 47, one would think Anquan Boldin was a new franchise hero assured of a roster spot for 2013. Well, if you were one of the many who thought that, you may be very wrong.

After being dealt from the Arizona Cardinals to the Ravens in March 2010, Boldin signed a four-year deal that’s set to expire after this upcoming season. In 2013, Boldin is set to earn a non-guaranteed $6 million base salary, with $1,531,250 left from his signing bonus proration. This equals a total 2013 cap hit of $7,531,250. Since that’s the only dead money left to count against the cap, the Ravens would achieve a net cap savings of $6 million by releasing Boldin rather than letting him play out the final year of his deal.

Baltimore is currently right in the middle of the pack in terms of available cap space, they’re an estimated $12,664,866 under the cap (16th most cap space in the NFL). Thus, releasing Boldin would certainly give them a nice chunk of space. Since joining the team in 2010, Boldin has been a solid, but not spectacular, receiver. However, after his memorable postseason, many Ravens fans would be sad to see him go. We’ll see if the parties can reach a solution to keep him in a Ravens uniform.

@AndrewOTC

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Chargers Place Lowest Possible Tender on RFA Danario Alexander

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Word leaked earlier today that the San Diego Chargers placed the lowest possible Restricted Free Agent tender on wide receiver Danario Alexander. This means that if the Chargers refuse to match an offer sheet Alexander signs with another team, they will receive no draft pick compensation. The Chargers have only the right of first refusal based on the tender given to Alexander.

After signing on with the Chargers last October, Alexander was a pleasant surprise for the team as he gained 658 yards on 37 catches with seven touchdowns, in only seven games. As Rotoworld.com notes, this amounts to 66 catches for for 1,170 yards and 13 touchdowns if projected over a full season.

The other day I put a post up detailing how Restricted Free Agency works in the NFL, which can be found here. For those who just want a quick look at what each RFA tender gets for an NFL club, here’s a sample from the article:

1) If the prior club simply wants the right of first refusal to any offer sheet the RFA may sign with another club, the prior club must simply make the RFA a Qualifying Offer for one-year with a Paragraph 5 Salary (the player’s base salary) of $1.323 million.

2) If the prior club wants both the right of first refusal AND draft pick compensation in the round the RFA was originally drafted in, the prior club must make the RFA a Qualifying offer for one-year with a Paragraph 5 salary of $1.323 million OR 110% of the player’s prior year Paragraph 5 Salary, whichever is greater. Basically, if last year the player’s base salary was even a penny more than $623,00, then the prior club is forced to opt for the second option and pay the RFA 110% of his previous season’s base salary.

3) If the prior club wants both the right of first refusal AND draft pick compensation in the 2nd round of the upcoming draft, the prior club must make the RFA a Qualifying offer for one-year with a Paragraph 5 salary of $2.023 million OR 110% of the player’s prior year Paragraph 5 Salary, whichever is greater. For this option, the team will have to pay 110% of the RFA’s prior season base salary if that player’s previous season base salary was more than about $963,333.

4) Finally, If the prior club wants both the right of first refusal AND draft pick compensation in the 1st round of the upcoming draft, the prior club must make the RFA a Qualifying offer for one-year with a Paragraph 5 salary of $2.879 million OR 110% of the player’s prior year Paragraph 5 Salary, whichever is greater. For this option, the team will have to pay 110% of the RFA’s prior season base salary if that player’s previous season base salary was more than about $1,370,952.

As referenced, the Chargers tendered Alexander at the lowest possible level, meaning he has a one-year deal for $1.323 million. With a $540,000 base salary in 2012, his salary would have been $1.323 million at the original draft pick tender (except this doesn’t apply in his case because he wasn’t drafted, otherwise his tender obviously would be at this level), $2.023 million at the 2nd round tender and $2.879 million at the 1st round tender. 110% of Alexander’s 2012 base salary is only $594,000, so the greater amounts at each tender level are those preset by the NFL.

This was probably the right move for the Chargers. Alexander has an extensive injury history and it is extremely unlikely that any team would have been willing to fork over a 1st or 2nd round pick to sign him away at this point in his career, despite his stellar 2012 production. Signing Alexander at the lowest tender saves the Chargers $700,000 on the cap when compared to the second round tender and $1.556 million when compared to the first round tender. Plus, the team does have a right of first refusal to any offer sheet Alexander may sign with another team. However, if Alexander does sign an offer sheet that the Chargers decide not to match, they’ll be kicking themselves as that means there’s a chance they would have lost out on a 2nd round pick just to save $700,000 on their 2013 cap. With $11,716,511 in cap space right now, Chargers fans would surely like to join in kicking the San Diego front office if this potential star were to sign elsewhere. Of course, if Alexander did receive a draft pick tender, he probably wouldn’t receive an offer sheet from anyone (especially for a 1st rounder). It’s still a fun scenario to consider anyway.

@AndrewOTC

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Update on Corey Webster’s Restructure – Giants Tack on Voidable Season

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The other day, I wrote an article on the moves the Giants made with Corey Webster and David Baas (that article can be found by clicking here). For those who don’t want to revisit the whole story, this was the portion written about Webster:

“First, let’s take a look at Webster. 2013 will be the final season of a five-year extension he signed with the Giants in December 2008. His base salary was originally set at $7 million for this season while various other bonuses brought his cap hit to $9.845 million. All Webster agreed to do here was reduce his base salary to $4 million; there’s no real restructure, only a reduction in money for Webster. No additional cap hits come into play for the Giants and as a result, Webster’s 2013 cap hit is now a more reasonable $6.845 million. If for whatever reason the Giants turn around and decide to release Webster, his release would result in a net cap savings of $4.25 million (the only portion of Webster’s contract that’s guaranteed to be on the cap is hit is his $2.595 million in bonuses). Webster didn’t have much negotiating room to do anything other than take this pay cut; he graded out 110th out of 113 qualifiers in ProFootballFocus’ 2012 cornerback rankings. Even with his reduction in salary, Webster still has the 5th highest cap hit on the Giants this year as of now. He would have had the 3rd-highest on the team, behind only Eli Manning and Chris Snee, had he not agreed to this reduction.”

According to a ProFootballTalk post last night, this wasn’t exactly the case with Webster’s deal. Per Mike Florio, Webster’s $7 million base salary and $250,000 workout bonus became a $1.25 million base salary, $2.5 million signing bonus, while the workout bonus remains the same. To help out with the cap this year, the Giants added a voidable season in 2014 to the contract, thus pushing $1.25 of that $2.5 million signing bonus to this voidable year due to the proration. Let’s take a look at what the Giants’ cap hit would look like in both 2013 and 2014 had the deal been as reported earlier, and as it’s being reported now:

Updated cap hits without voidable year:

2013: $6.845 million ($4 million base salary + $2.595 million prorated from various signing bonuses + $250,000 workout bonus)

2014: $0

Updated cap hits with voidable year:

2013: $5,345,000 ($1.25 million base salary +  $2.595 million prorated from various signing bonuses + $1.25 million prorated from new signing bonus + $250,000 workout bonus)

2014 (voidable year): $2,250,000 ($1 million base salary + $1.25 million prorated from new signing bonus)

As Jason wrote the other day here, voidable seasons are often extremely easy to achieve and are done simply to lower cap costs now, which also happens to increase dead money costs down the line. As a result of this restructure, the Giants now save $4.5 mill in cap space for 2013 (they would have saved $3 million in 2013 had the deal been as reported on Thursday). Instead, this voidable year in 2014 creates $1.25 million of dead money on the Giants salary cap in 2014. The 2014 figures would be a great contract for the Giants if, of course, the year wasn’t voidable and Webster was actually going to play for the team on a $2.250 million cap hit. Instead, dead money gets pushed forward a year on the Giants’ cap. As mentioned in Jason’s article I referenced above, adding voidable seasons to create a bit of extra space now while pushing dead money forward in the future just isn’t a sound practice, but Webster’s deal is far from the most egregious example of that.

@AndrewOTC

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The difference between the Giants’ dealings with Webster and Baas

If you’re someone who loves NFL cap stuff enough to be a frequent visitor of OverTheCap, you’ve probably already heard about the Giants’ transactions today with cornerback Corey Webster and center David Baas. Before these deals fade out of your memory I wanted to take some time to break down all the numbers involved with these moves, especially on Bass’ contract.

First, let’s take a look at Webster. 2013 will be the final season of a five-year extension he signed with the Giants in December 2008. His base salary was originally set at $7 million for this season while various other bonuses brought his cap hit to $9.845 million. All Webster agreed to do here was reduce his base salary to $4 million; there’s no real restructure, only a reduction in money for Webster. No additional cap hits come into play for the Giants and as a result, Webster’s 2013 cap hit is now a more reasonable $6.845 million. If for whatever reason the Giants turn around and decide to release Webster, his release would result in a net cap savings of $4.25 million (the only portion of Webster’s contract that’s guaranteed to be on the cap is hit is his $2.595 million in bonuses). Webster didn’t have much negotiating room to do anything other than take this pay cut; he graded out 110th out of 113 qualifiers in ProFootballFocus’ 2012 cornerback rankings. Even with his reduction in salary, Webster still has the 5th highest cap hit on the Giants this year as of now. He would have had the 3rd-highest on the team, behind only Eli Manning and Chris Snee, had he not agreed to this reduction.

As @Jason_OTC pointed out, Webster’s money for 2013 is similar to what Asante Samuel received in Atlanta last year on his new deal, and Nnamdi Asomugha is likely to see something similar regardless of whether he restructures or is released.

Now let’s see what happened with David Baas. Unlike Webster, Baas’ deal is truly a restructure. Actually, it’s the second time Baas has restructured his contract with the Giants, which always makes it more fun to try and break down. Baas signed a five-year deal with the Giants in July 2011. The contract contained an $8.5 million signing bonus, which for cap purposes accounts for $1.7 million per year in addition to Baas’ base salaries. After only one season, Baas agreed to restructure his contract by reducing his $3 million base salary to $900k. Don’t feel for Baas though, as that loss of $2.1 million wasn’t really a loss at all, it was simply converted into a new bonus to be prorated over the remaining four seasons on his contract. This restructure saved the Giants $1.325 million in cap space for 2012, but like any other restructure, added more money to to their cap in each of the remaining years on Baas’ deal. To be exact, this $2.1 million bonus gets prorated over the final four seasons of the deal, resulting in an extra $525k on the Giants cap in each of these years. In total, at this point the prorated bonuses on Baas’ deal totaled $2.225 million per year over the final 4 years, in addition to his base salaries and workout bonuses in each of those seasons.

Now fast forward from that point until today. Baas restructured his 2013 base salary from $4.25 million to $1.25 million, with that extra $3 million being converted into another bonus. With three years left on his contract, that $3 million gets prorated at $3 million per year until the contract’s expiration. This increases the prorated portions of Baas’ cap hits from $2.225 million last year to $3.225 million for each of the next three years. Including base salaries, Baas’ remaining cap hits on his contract now look like this:

2013: $4.725 million ($1.250 million base salary + $3.225 million prorated bonuses + $250k workout bonus)

2014: $8.225 million ($4.750 million base salary + $3.225 million prorated bonuses + $250k workout bonus)

2015: $8.475 million ($5 million base salary + $3.225 million prorated bonuses + $250k workout bonus)

The restructure doesn’t really have a major effect on Baas right now. Sure, that’s an extra $3 million that he sees up front, but since he is extremely likely to be on Giants’ roster for the duration of the season, he would have seen this money anyway as part of his base salary. Instead, he sees it a bigger lump sum while the Giants clear up some cap space for this year. However, with net cap savings in 2013 in 2014 that would result from Baas release after this year, he may not be so safe down the line.

This is yet again a good reminder that, despite restructuring a player’s contract to save money now, the bill for that saved money becomes due later. Every dollar a team pays a player has to be accounted for on the cap, and just because they can mess around with it to avoid paying today doesn’t mean they aren’t going to have to pay it at a later date. Keep that in mind with the large amount of restructures we’ve seen so far this offseason.

To take a look at the Giants salary cap situation, click here

@AndrewOTC. 

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Victor Cruz and Restricted Free Agency

A little while ago, ProFootballTalk.com posted their “Free Agent Hot 100” list, which, as you might guess, is their list of the top 100 NFL free agents this offseason. As I scrolled through the list, something stuck out to me: only 5 of the players on the list are restricted free agents (“RFA’s”). Although RFA’s historically generate little interest on the free agent market, it seems this year there are only a few quality ones to pursue anyway. For now, I wanted to focus on wide receiver Victor Cruz of the New York Giants, who is the only RFA in the top 50 (PFT has him ranked at #3). Obviously, the most ideal scenario for both Cruz and the Giants is to reach an agreement on a long-term deal or, at least a contract that’s more than one year. However, if they are unable to reach an agreement, Cruz will undoubtedly return to the team on a one-year contract in 2013.

Let’s take a look at RFA basics first. Article 9 (“Veteran Free Agency”), Section 2(a) of the CBA states that any veteran player with three accrued seasons, but less than four accrued seasons, at the expiration of his last contract is a RFA. At this point, the player can negotiate and sign a contract with any team. However, there are some protections built in for the player’s former club if the player signs elsewhere. In order to receive these protections, the prior club must offer the player a Qualifying Offer on or before the first date of the RFA signing period. This year, the deadline for an RFA’s prior club to submit a Qualifying Offer to the player is March 12th. It should be noted here that if the prior club does not submit a Qualifying Offer to their RFA, or if they withdraw the Qualifying Offer prior to the conclusion of the RFA signing period, the RFA becomes an Unrestricted Free Agent and whatever team signs him will not be subject to any compensation to the RFA’s prior club.

At this point, the question is, what exactly are the protections the prior club can gain by making their RFA a Qualifying Offer? The answer to that question is as follows:

1) If the prior club simply wants the right of first refusal to any offer sheet the RFA may sign with another club, the prior club must simply make the RFA a Qualifying Offer for one-year with a Paragraph 5 Salary (the player’s base salary) of $1.323 million.

2) If the prior club wants both the right of first refusal AND draft pick compensation in the round the RFA was originally drafted in, the prior club must make the RFA a Qualifying offer for one-year with a Paragraph 5 salary of $1.323 million OR 110% of the player’s prior year Paragraph 5 Salary, whichever is greater. Basically, if last year the player’s base salary was even a penny more than $623,00, then the prior club is forced to opt for the second option and pay the RFA 110% of his previous season’s base salary.

3) If the prior club wants both the right of first refusal AND draft pick compensation in the 2nd round of the upcoming draft, the prior club must make the RFA a Qualifying offer for one-year with a Paragraph 5 salary of $2.023 million OR 110% of the player’s prior year Paragraph 5 Salary, whichever is greater. For this option, the team will have to pay 110% of the RFA’s prior season base salary if that player’s previous season base salary was more than about $963,333.

4) Finally, If the prior club wants both the right of first refusal AND draft pick compensation in the 1st round of the upcoming draft, the prior club must make the RFA a Qualifying offer for one-year with a Paragraph 5 salary of $2.879 million OR 110% of the player’s prior year Paragraph 5 Salary, whichever is greater. For this option, the team will have to pay 110% of the RFA’s prior season base salary if that player’s previous season base salary was more than about $1,370,952.

So what does this mean for Cruz and the Giants? Let’s see what their Qualifying Offer to Victor Cruz will have to be for each of the four options listed above. Keep in mind that Cruz’ base salary in 2012 was $490,000.

1) Right of first refusal: One-year, $1,323.000.

2) Right of first refusal and draft pick compensation in the round the player was drafted in (Cruz wasn’t drafted, but let’s pretend he was for this option): $1,323,000. 110% of Cruz base salary last year would be $539,000, so the Giants would have to go with the greater number.

3) Right of first refusal and second-round draft pick compensation: $2,023,000.

4) Right of first refusal and first-round draft pick compensation: $2,879,000.

As you can see, all of the Giants’ Qualifying Offers would simply be the set amount designated by the NFL and not 110% of Cruz’ 2012 base salary because 110% of his base salary would be the smaller figure. There are still six days for the Giants to make a Qualifying Offer; they are expected to tender Cruz at a first round level (meaning a Qualifying Offer of $2.879 million). As I mentioned above, the most ideal situation for both sides is to come to an agreement on a longer contract. Signing Cruz long-term gives Cruz security and the Giants a high-level WR for years to come while a one-year deal means there’s a higher chance Cruz signs elsewhere after next season. Of course, even if parties are forced to settle on a one-year deal via a Qualifying Offer, that doesn’t mean they can’t agree on a longer contract immediately after. The one-year deal will likely just serve as a barrier to Cruz becoming an Unrestricted Free Agent (which would happen if the Giants didn’t make a Qualifying Offer) while the parties work out a longer contract.

To check out the Giants current salary cap situation, click here.

@AndrewOTC

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News that will shock Jets fans – Rams release Wayne Hunter

Sorry for the delay in posting everyone, had some things to take care of this past week. Anyway, in a move that will undoubtedly send some Jets fans into cardiac arrest as it is so surprising, the Rams released Wayne Hunter. Of course, Hunter was the much-maligned right tackle who manned the spot on the Jets offensive line once Damien Woody’s departed the team. After struggling for much of the 2012 preseason, the Jets shipped Hunter to St. Louis in exchange for another tackle, Jason Smith. While Hunter’s release was expected by many fans, what most probably didn’t know was his salary cap figures the last couple years.

Former Jets General Manager Mike Tannenbaum signed Hunter to a four-year, $13 million dollar contract after the lockout in 2011. After a disappointing 2011 season,  the Jets had a chance to escape the rest of the contract by releasing Hunter soon after the season concluded. However, the team chose not to go this route and Hunter’s 2012 base salary of $2.45 million became guaranteed. A $50,000 workout bonus increased his 2012 cap hit to $2.5 million. As mentioned, the Rams picked up his contract when they traded for him last August. For this upcoming season, Hunter had a non-guaranteed base salary of $3.95 million with a $50,000 workout bonus, bringing his cap hit to an even $4 million. With no guaranteed money left to pay, the Rams save $4 million on their 2013 cap from this no-brainer release. Hunter would have had cap hit of $3 million ($2.95 million base salary + $50,000 workout bonus) in 2014, the final year of the deal if he were still on the team. Hunter would have been the 8th-highest cap hit on the Rams this season.

As several Jets fans would have told St. Louis last August: told ya so!

To check out the Rams salary cap situation, click here

@AndrewOTC

P.S., I’d also like to extend a welcome to Jim, the newest writer here at OTC. Looking forward to reading the new contributions!

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Eagles Salary Cap Implications From the Releases of Cullen Jenkins and Mike Patterson

Earlier today, the Philadelphia Eagles released defensive tackles Cullen Jenkins and Mike Patterson. Below is a summary of the salary cap implications resulting from the moves.

Jenkins went undrafted in 2003 out of Central Michigan, After signing on with the Packers following the ’03 draft, he ended up playing the season in NFL Europe before making the Packers roster in 2004. After hitting unrestricted free agency in 2011, Jenkins was a surprise addition to the Eagles’ well-publicized 2011 free agent class. His original contract with Philadelphia was a five-year, $25 million pact with a roster bonus due each year. In February 2012 Jenkins and the Eagles restructured the contact where he received a $5 million roster bonus for the season but had his base salary lowered to the league minimum. The final year of the contract (2015) was removed. However, this restructure also guaranteed $1.5 million of Jenkins 2013 base salary ($4.5 million), and he was due to earn another $1 million roster bonus this coming March. The only dead money on the contract from this release is the $1.5 million the team guaranteed as part of the 2012 restructure. Regardless, because Jenkins’ 2013 cap hit was set to be $5.5 million ($4.5 million base salary + $1 million roster bonus), his release saves a net $4 million this season.

Mike Patterson was the Eagles’ first round pick in 2005, 31st overall.  He was the longest tenured player on the team until his release today. His rookie contract was for six years and $6.625 million. A rare instance happened with Patterson where the Eagles actually restructured his contract midway through his second season in the NFL, something that was almost unheard of (under the new CBA, it’s actually impossible to do as rookie contracts cannot be negotiated until after Year 3). The restructure added seven years for approximately $32 million, with a $4.5 million signing bonus. Patterson’s base salary in 2013 was set to be $2.9 million, with a $100k workout bonus bringing his cap total to $3 million. His cap totals over the final three years of the deal were $3.75 million, $5 million and $6.35 million in 2014, 2015 and 2016, respectively. There is no dead money remaining on Patterson’s contract, so the team realizes an immediate cap savings of $3 million this year.

In summary, when the cap implications for today’s two releases are combined, the Eagles attain a net cap savings of $7 million. The team already has a large amount of 2013 cap space (an estimated $28,020,721) and so these moves will only help their cap flexibility going forward.

To check out the Philadelphia Eagles’ 2013 salary cap projections, click here.

@AndrewOTC

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