Some Thoughts on the Saints Trade for Bradley Roby

I thought there was a fascinating trade announced today between the Texans and the Saints for cornerback Bradley Roby. Roby is currently suspended for the first week of the season but will be good to go for the remainder of the year. The impact on the Saints isn’t really what I find fascinating but how the two sides will work this out from a salary cap perspective which I would think may be a bit tricky.

Per our estimates the Saints currently have about $4 million in salary cap space. Roby will cost, after the suspension is served, $9.266 million. That number is obviously more than the Saints have. Normally this is not an issue as a team simply just converts the salary of another player to a bonus to create cap room, except the Saints don’t have anyone left to do this with.

Of the 62 players on the Saints roster as of this morning, 56 of them have a Paragraph 5 salary of no more than $1.19 million. They have five players with salaries between $1.7 and $2.4 million. If they reworked every one of those deals they would open up in the ballpark of $600,000 per player. Finally there is Marcus Williams at over $10 million but he is a franchise player and I do not believe the league would allow void years on that contract since the deadline for a multiyear contract passed in July. They also have two players they could potentially settle with on an injury and clear around $800,000 in cap space.

Unless I am wrong in my interpretation on how the void contracts work with a franchise player (and it is always possible I could be) the Saints have pretty much run out of ways to create cap room for this season after maxing out so many contract restructures. If they redid every deal and released those two players they could get to maybe $7.8 million, which is not enough to absorb the Roby contract.

An easy solution is to get the Texans to eat most of the contract. How much of the contract would they have to eat?  My assumption would be at least $7 million. That would lower his salary cap charge to around $2.5 million on the season. That would leave the Saints with about $1.5 million in working cap space if no other deals were touched and then touching those contracts if the need arises to open up a few hundred thousand at a time.

That is a big bill for the Texans who just spent $7 million on a player they wound up trading for a bag of peanuts to the Jets. If I were the Saints I would argue that the cost should be the same here but Houston has restructured the Shaq Lawson contract long before the trade in what was simply a bad decision. This time they control their fate at least a little bit.

At the very least the Saints would need enough cap room to execute the trade so that they could restructure Roby after the trade. That would likely mean that the bare minimum would be for the Texans to eat around $4.5 million.

What if the Texans simply refuse to pick up any of the contract?  I think there might be a way around that using a bit of a contract trick to lower the cap number without the Texans having to pay a dime. The way the NFL works is that if you sign a player to a contract that has a signing bonus attached that bonus is the responsibility of the team that trades him (with the exception of franchise type player trades).

A workaround might be to use a roster bonus that is not earned by Roby until after the trade. So for example lets say the trade is executed next Tuesday. Roby would have a roster bonus that is paid on something like the following Monday. Any roster bonus in a contract after the season is treated the same as a signing bonus for salary cap purposes.

So lets say the Saints are willing to take on the whole contract what they can do is have the Texans restructure the contract to include a roster bonus of $8,427,352 and a base salary of $1.075 million, which would be prorated for 17 weeks at $1,015,278 while adding three void years to the contract. The resulting contract would work as follows:

YearBase SalaryProratedCap
2021$1,015,278$1,685,506$2,700,784
2022$10,000,000$1,685,506$11,685,506
2023$0$1,685,506$1,685,506
2024$0$1,685,506$1,685,506
2025$0$1,685,508$1,685,508

Unlike with the signing bonus this contract would be treated different in a trade. Because the roster bonus is the responsibility of the Saints rather than the Texans, Houston would not pay a dime and would only take on an additional $1.6855 million in cap charges this year. They would receive a credit on their salary cap in 2022 for the charge because the bonus was not paid by Houston.

The Saints would take on the contract as is, with a cap charge of just $2.7 million, and have enough space under their current salary cap situation to trade for him without the Texans picking up a dime on the contract. I’m not sure if this will happen but I do think it would be a creative way to work the trade if the Texans are hung up on price and the Saints have no alternative ways to create cap space.

I’m not sure what the rules are with trading suspended players (I would think you can’t trade until they are no longer suspended, but that is also just a guess- edit this guess is indeed wrong as they can trade a suspended player) but there is no real reason for either side to hurry with the trade since he can not play this week anyway. It also probably makes the restructure of the contract cleaner since he would have already lost his week of pay.

We should get an idea of how it will play out in the coming days but this could be a pretty unique situation by the time the trade is executed.

Salary Cap Space Update- September 7

Rather than putting a number of posts about restructures, I thought it would be good to just take a quick look at where teams stand with the salary cap as of Monday morning. Team’s have until Thursday to be under the salary cap for the year though almost everyone is now under the cap.

Last week we had about 7 teams that were over the salary cap and most made moves yesterday to get under. Field Yates of ESPN reported that, as expected, Dak Prescott, Julio Jones, Jimmy Graham and Carl Nassib have all restructured their contracts to create cap room for their respective teams. The first three were logical moves and the Nassib one just simply the Raiders needing to find money wherever they could.

Prescott’s restructure creates $5 million in cap room for the Cowboys which should move them to about $4M under when the season begins. There were other candidates but Prescott is clearly going to be in Dallas for a long time while there are probably more questions on Amari Cooper and Demarcus Lawrence.

Jones’ restructure opens up $11.2 million in cap room for the Titans who are now about $5.5 million under. Jones had almost no dead money in his contract after this season so this was an easy decision and easy contract to work with compared to other deals.

Graham’s contract restructure created $4.7 million in cap room for Chicago to get them to $3.7 million under. His contract expires after this season so basically they just borrowed from 2022 when their cap situation is a bit better to move under the cap.

Nassib’s contract was restructured for the second time this year. The Raiders in the last few days have restructured the contracts of Nassib, Yannick Ngakoue, and Nick Kwiatkoski to get under the cap. Currently we have them $750,000 under, but more likely they are $2.25 million under. They had recently signed KJ Wright to a contract with $1.75 million in likely incentives but I would guess they have a condition attached so they do not count on the cap.

The team that has the most work to do is the Giants who are around $6 million over the cap. They will likely need to look at some combination of restructuring the contracts of Jabrill Peppers, Adoree Jackson, Sterling Shepard, Evan Engram, and James Bradberry to get under.

The Rams are listed as $1 million over but they redid Johnny Hekker’s contract already which should move them under. The Falcons probably still need to make a move as they are right around the salary cap limit. The other teams to keep an eye on are the Bills, Bucs, Dolphins and Colts.

Here is a snapshot of the cap space in the NFL right now. Remember that these are fluid and will quickly change as the season approaches.

TeamCap Space
Jaguars$30,473,427
Panthers$21,951,546
Broncos$18,436,886
Washington$14,484,226
Chargers$12,887,377
Bengals$12,069,162
Browns$10,917,556
Steelers$10,035,579
Eagles$9,145,216
Jets$8,513,237
Texans$7,728,924
Seahawks$7,609,898
Lions$7,378,481
Packers$6,625,588
Vikings$5,982,997
Titans$5,612,039
Patriots$5,040,857
Cowboys$4,212,508
Cardinals$4,025,333
Bears$3,648,417
Chiefs$3,288,364
49ers$2,166,910
Saints$2,102,748
Colts$1,787,667
Ravens$1,401,271
Dolphins$1,338,849
Buccaneers$1,185,183
Raiders$726,379
Bills$521,058
Falcons($61,761)
Rams($955,578)
Giants($6,210,185)

NFL Salary Cap Update for September 1

Yesterday was the official final cutdown date for teams in the NFL and we have processed most, but not all of the transactions. In addition many people have noticed some wild swings in our salary cap space estimates for most teams and that has sparked some confusion so I wanted to clear up where the cap space stands on OTC and how it differs from the NFL.

During the NFL offseason the league only accounts for 51 players base salaries in the calculation of the salary cap for each team. When the regular season begins that changes to the full NFL roster. What that means is that we go from 51 players to generally somewhere around 75 players which includes your 53 man roster, 16 practice squad players, and however many players you have on injured reserve, NFI, suspension, or PUP.

To try to put each team’s salary cap space in a better perspective we always jump the gun with a switch at OTC by moving the clock forward right after final cuts. This way you can easily see which teams have room for new contracts, which teams probably have to do contract modifications, and so on. However this will put some teams in a position of looking as if they are over the cap which would be against the rules of the NFL. In actuality they have until next Thursday to get get under the cap since the league is still using the top 51 rule until the regular season begins.

So when you see a team like the Giants at $4.5 million over the cap all it means is they have some work to do. The Giants for example have a huge list of players on IR (they have 12 and the next closest is 8). They will likely cut a good chunk of those players with injury settlements dropping their cap charges from say $440,000 to somewhere around $50,000. They may also need to restructure a contract as well. As long as that cap number changes by next week it is all within the rules.

Hopefully we will get all caught up on releases by tonight. We still have some dead money to accrue, reserve list modifications, and in the cases of some teams more terminated contracts. So bear with us during this week which is hectic with all the comings and goings in the league, but hopefully this clears up why the cap space changed so much between last night and this morning.

Here is a snapshot of cap space for the teams that I think we are closer to finished with all of the terminations.

TeamCap Space
Panthers$23,652,565
Broncos$21,938,294
Washington$16,329,474
Steelers$15,719,362
Jets$15,419,225
Browns$14,389,671
Chargers$14,028,115
Bengals$13,770,510
Lions$12,980,986
Eagles$12,504,118
Seahawks$11,150,161
Packers$9,869,754
Vikings$8,860,588
Cardinals$6,548,961
Saints$6,410,366
49ers$5,777,327
Patriots$5,691,550
Chiefs$5,415,965
Cowboys$4,445,475
Bills$3,679,387
Dolphins$2,929,757
Falcons$2,119,310
Rams$1,616,379
Bears$1,247,314
Ravens$548,112
Raiders($1,975,831)
Giants($4,524,704)
Buccaneers($6,803,744)

Broncos, Bears, and Vikings Set to Benefit the Most from the June 1 Rule

Happy June 1 day! Today marks the final day that any trades or releases result in all future prorated bonus money accelerates into 2021. Starting on June 2 any trade or release will now see only this years prorated money (and any future guarantees) stay on the teams 2021 salary cap and all future money will now go to the 2022 salary cap. This should open the door to more trades in the NFL but for now let us take a look at the teams who will be set to open up cap room now that the rules have changed.

Broncos- $10 million

The divorce between tackle Ja’Wuan James and the Broncos was very public as James got caught in the crosshairs between the NFL and the NFLPA’s fight over workouts. The Broncos have about $20 million in cap room while carrying James’ $13 million cap charge and would have saved $4 million with a standard release. I believe the reason they used the June 1 in this case is because of the potential grievance liability that will come from his injury guarantees. James had $15 million in injury protection remaining in his contract and should file a grievance to try to recover it. Even if it is a longshot it will still count for $6 million in the short term which would have actually cut down on the Broncos cap room, so using the June 1 keeps their cap sky high in to keep open the possibility of a trade. James will now count for $3 million on the cap plus whatever grievance if filed, in 2021 with a $6 million charge in 2022.

Bears- $9 million

The Bears released Charles Leno in early May and used the June 1 designation to help deal with salary cap issues. The Bears were carrying Leno at $11.3 million for the last month and that number will now cut down to $2.3 million, a savings of $9 million. Had the Bears used a traditional release the savings would have been around $6 million. The Bears only have about $200K in cap room so they desperately needed this $9 million to get Justin Fields under contract.  Leno will count for $2.8 million in dead money in 2022.  

Vikings- $7.9 million

In one of the least publicized moves of the offseason, the Vikings used the June 1 on tight end Kyle Rudolph back in March. In all the years of tracking contracts on OTC no June 1 release has gotten me more emails and tweets than this one with everyone wanting to know why Rudolph is still listed on the Vikings. That should stop now that he will see his cap number drop from $9.3875 million to $1.45 million. This added cap room should give the Vikings more than enough breathing room they need for the season as they already had around $6.5 million in space with their first round pick under contract. Could they use the added room to try to move someone this year?  I guess it is possible but I would expect them to just carry it over to 2022. Rudolph will count for $2.9 million in 2022.

Eagles- $4 million

The Eagles made use of the June 1 on two players- Alshon Jeffery and Malik Jackson. This was arguably the most creative use of the June 1 in the history of the NFL with the Eagles renegotiating the contracts of the players at the end of the 2020 season in order to lower their cap numbers by millions of dollars so they could carry them at a low number from March to June. Without that renegotiation they never could have used the June 1 and been cap compliant. The Eagles have just $3.7 million in cap room right now and this will get them to $7.7 million. Jackson will cost $3.611 million on the Eagles 2021 cap while Jeffery will count for $5.59 million.  The numbers in 2022 are huge- Jackson at $9.03 million and Jeffery at $5.4 million. The Eagles 2022 dead cap of $14.4 million from these two is more than 20 teams currently have in 2021.

Panthers- $3.5 million

Tre Boston was informed of his release early in the winter but the Panthers waited until the start of the new league year so they could designate him a June 1 cut. Boston has been sitting on the Panthers cap at $6.216 million and that will reduce to $2.666 million giving Carolina an additional $3.55 million in cap room. The Panthers offseason has been a bit of a salary cap roller coaster and in hindsight the use of the June 1 here was not really needed, but this gave them some added flexibility if things had gone different during free agency. Boston will also count for $2.66 million on the Panthers 2022 salary cap

Saints- $1.1 million

Drew Brees retired early this offseason but nothing was made official due to the salary cap consequences. Instead, as expected, the Saints reworked Brees’ contract down to lowest possible number it could be so they could carry him on the active roster through the offseason. When they process the retirement he will count for $11.15 million on the cap this year and $11.5 million next year. The Saints cap is still a mess and this won’t help them much but every little bit helps. Look for them to restructure more contracts in the summer, either via extension or kicking the can on another player or two.

49ers- $1.1 million

This was essentially the same situation as Brees with Weston Richburg being the retired player in this case. Richburg reworked his deal early in the offseason to provide the 49ers with the most operating room in free agency. He will count for $3.5 million on the cap in 2021 once the retirement is made official.

As a side note technically none of these will impact the cap until June 2 but I decided to process the releases early to save some time. The retirements will not be reflected until they are made official with the NFL.

What Kind of Impact Will the New TV Deals Possibly Have on the Salary Cap

So the NFL has their new TV deals in place and I am getting all kinds of questions about the salary cap impact of the new television deals. While this isn’t really my focus area I figured we could have a little fun with it and run through some guesstimates.

The first thing to get out of the way is the immediate impact of the TV deals on the cap. Quite frankly there probably will not be any.  The last television deal that was signed happened way back in late 2011, less than a year after the NFL locked out the players and a few months after the two sides agreed to a new CBA. Those television contracts were negotiated for the 2014 to 2022 seasons.

Even though the new contract was agreed to in 2011 there was zero noticeable impact to the NFL salary cap until the 2014 season. The cap during that era was flat. It was negotiated to be $120.375 million for 2011 and in 2012 grew to just $120.6 million. In 2013 it was just $123 million. In 2014 it jumped by $10 million. So I would imagine that the old TV contracts will still be honored for this year and next year, not causing this amazing leap in cap room.

Now one thing that may cause a little bit more of a jump now is that the NFL does have the ability to immediately add a 17th game to the schedule which should increase revenues. I know that last year the NFL estimated that extra playoff games would lead to $150 million in revenue, so an extra regular season game likely should do the same. That said I have a feeling that this was already included in their estimates for this season since they were deep into TV negotiations and it would explain the big delay in setting the salary cap this season.

Prior to the pandemic the NFL salary cap growth was steady as could be.

YearSalary Cap$ Change% Change
2014$133,000,000
2015$143,280,000$10,280,0007.7%
2016$155,270,000$11,990,0008.4%
2017$167,000,000$11,730,0007.6%
2018$177,200,000$10,200,0006.1%
2019$188,200,000$11,000,0006.2%
2020$198,200,000$10,000,0005.3%

Basically, the cap grew from around $10 to $12 million in any given season. 2020 was the only year below 6% and I believe I remember reading (I am too lazy to look it up) that the union took some added benefits that year which caused the cap to not grow as much. Anyway I think it safe to assume that if the pandemic does not exist the salary cap this year would have been around $210 million and then $221 million in 2022. Maybe with the additional game we bump that by a few million so lets say $225 million is where we should be in 2022 if there was no pandemic (we probably won’t be there since there is still a shortage to account for).

The other thing to keep in mind is that the when we see the above numbers we see steady growth and not a flat cap for 7 years. That means that revenues are growing each year and a good portion of those revenues are from the TV contracts. So while everyone is treating this as if the NFL is going to immediately get somewhere around $10 billion in TV money in 2023 and $10 billion every year thereafter, they will ease into all that money, just like they did above. How will they ease into it?  We can look at the Green Bay Packers financial statements to get an idea. Here is how the Packers broke down their national revenue from 2011 to 2020.

YearNational Revenue (millions)$ Change% Change
2011$163.3
2012$171.6$8.35.1%
2013$179.9$8.34.8%
2014$187.7$7.84.3%
2015$209.1$21.411.4%
2016$226.0$16.98.1%
2017$244.0$18.08.0%
2018$255.9$11.94.9%
2019$274.3$18.47.2%
2020$296.0$21.77.9%

Their 2015 report represents the year in which the new TV contract kicked in and you can see it was the big change, however it continues to rise for each season. Now this doesn’t account for just the TV deals but I would imagine they make up most of the growth here. What if we applied the same growth rates?

YearNational Revenue (millions)$ Change% Change
2021$316.7$20.77.0%
2022$338.9$22.27.0%
2023$379.6$40.712.0%
2024$406.1$26.67.0%
2025$434.6$28.47.0%
2026$465.0$30.47.0%

Now the players get a bigger pie from the TV media but everything is pretty much capped off so lets call it 49%. Of that 49% probably 15% goes to various benefit pools and the rest goes to the salary cap. So based on this I guess we would be going from around $10 million a year growth to something like $17 million a season from the increase in TV revenues and typical growth in the other revenue streams.

Given that 2023 may still be impacted by Covid my guess is our first real big spike year hits in 2024 with the cap probably in the range of $260 million. It should reach $300 million by 2027. But I don’t anticipate this massive jump from $200 to $300 million in the course of 1 year. That has never been the way the NFL does business nor would it make sense for their TV partners to just do flat payments.

For whatever reason there has been a negative sentiment on the timing of the announcement of these deals. If they were going to impact the cap this year the NFL has to adjust the cap if they didn’t project them. So given all the circumstances and the pressure from the NFLPA on the cap number I am sure that everything was accounted for here.

There is also nothing wrong with the NFL making more money. For every additional penny that the NFL negotiates for the league it is an additional penny for the NFL players. Players will only earn more as the revenue streams grow. The way that the money is broken down is collectively bargained by both sides. Everyone is going to benefit from this. Do the owners make the most out of it?  Absolutely they do but they always have. It’s a revenue share between two sides. Nothing that happened in these negotiations was going to change the fact that teams lost a ton of revenue this year. It wasn’t going to change the salary cap that is bargained between the two sides. If there is a problem with it then it is something that should be addressed in the next CBA. But yesterday was a good day for everyone who will be working with the NFL not just those 31 main owners of the franchises.

Salary Cap To Be $182.5 Million

A number of people have already reported this number but we did confirm with a source as well that the NFL salary cap will drop from $198.2 million to $182. 5 million in 2021. This is pretty much in line with the $183 million number I mentioned on the podcast this week and is pretty much what most of the cap people in the NFL have been working with. We have adjusted the numbers on the site accordingly but are still working through updating things so just remember that the cap is very fluid right now for each team.

As for the future I just adjusted our cap estimates down to $203 million for 2022 and $225 million for 2022 and 2023 respectively. I know people has said how much lower they expected the cap to be this year had there not been a floor and the working numbers looks to be around $155 million would be the ballpark without the floor. Given typical cap growth rates I think this likely means there is about $30 million or so in losses still unaccounted for.

Generally the NFL does not like large spikes in the cap if they can avoid it so Id back on a 2/3 loss on 2022 and then the balance in 2023. This also ensures that the entire loss is covered in the three year cash spending window teams will begin next week. This is probably important to teams to avoid any kind of big spike in 2023 that could force teams to do deals they do not want to do. I would expect the big growth to come in 2024 which may be a bit of a major reset for the NFL. Of course huge TV increases can change all of this but this seems like a reasonable assumption for now.

This is the first time since 2011 than the salary cap has dropped. The NFL and union did negotiate some things back then to try to lessen the impact but we did see many changes that year for the middle class in the NFL. Teams did benefit from having an uncapped year in 2010 to dump money and spending that year also fell off. This is different in that it was unexpected during the free agency and spring extension periods.

The $182 million salary cap is between where the cap was in 2018 and 2019. However there are fundamental differences now. Minimum salaries are much higher in the new CBA, around $150K per player, and 60% of the NFL plays on those minimums. In addition the rookie pools are going to be based on last years numbers since they can not fall (and will actually increase slightly). The same goes for the restricted tenders though those are much lower in number.

So in terms of working within the confines of the 2020 CBA rather than the 2011 CBA I would say that the effective salary cap is really closer to $170 to $172 million per club once you factor in those other added costs relative to where the cap was two years ago. That is basically 2016 and 2017 levels. So this could be a pretty wild ride as teams work through this.

One thing that is important for players here is to realize that there are all kinds of ways to use cap space. Teams have moved away from all of these things in recent years but you can look at the past to see how teams did contracts to work within the cap. You can even study teams like the Saints and Eagles to see ways for it to work. I think it is important to not just settle for “the cap wont allow it” excuse when there are ways to push for more despite the salary cap.

The bigger question and hurdle will be how do owners approach this. Budgets historically run, for the most part, along cap numbers. Last years average spend per year was about $210 million. If teams plan on slicing $20 to $30 million of actual payroll there is less that you can do to convince teams to skirt the cap. If the money is not there it simply is not there. Looking at the historical biggest spenders is probably a good place for free agents to start to see just what kind of impact is going to come for the 2nd and 3rd tier free agents (we already can see nothing is going to happen to stars).

NFL Raises Salary Cap Floor to $180 Million

The NFL and NFLPA have agreed to raise the salary cap floor, previously set at $175 million, to $180 million. This rumor had been circulating for about a week and our salary cap estimates on the site already took this raise into account. The salary cap in 2020 was $198.2 million and this would be the steepest drop in NFL history if it happened.

As for what triggered the raise who knows. Its such a minor bump that perhaps it was done simply to bring some added clarity to the salary cap situations for some teams. It may have simply been the NFL showing more willingness to borrow from the future or the NFLPA conceding a little on benefits.

The NFL is looking to move to 17 games this year which requires them to negotiate a new media contract if they want to have 17 games. That could be a standalone deal or extending one of their current deals I believe the way that works is if a new deal is negotiated they will recalculate the salary cap for any new money that comes into circulation from the TV contracts. If the league doesnt think that they will have a deal in place before they set the cap, maybe this is just taking into account a minimum expectation for a rise in rights fees which may or may not be in place before March 17. Considering how minor of a bump this is to come so late in the game maybe this is the reason for it.

Teams do need some clarity on the salary cap before they can proceed with certain moves with player contracts so any guidance helps. Usually teams have clarity in December so this is very different.

I have read a lot of speculation on this impacting budgets but at this point owners should know the impact Covid had and will have advised accordingly. The bigger issue is how do GMs fit it all into the salary cap.

Not only do they need to know this years cap but likely have some guidance on next years cap as well. If they know that the cap next year would jump back to $220 million this becomes a much easier situation to navigate. If next year is expected to be $190 million than all teams are doing is pushing problems from 2021 into 2022. Once the league informs people of payback schedules for the revenue losses and the TV deals are finalized will we likely have a normal league year.