Recently I have been getting more and more comments about the use of voidable contract years and questions about why teams do and do not use this contract mechanism to increase cap space. So let’s take a more thorough look at the concept of the void year and the pros and cons associated with it’s use.
For those unfamiliar with a void year in a contract, think of it as a way to finance a purchase that you probably can’t afford but you are doing whatever you can to stretch your money as much as possible. These are years in a contract that are essentially “dummy years” where you can dump salary cap charges in the future rather than taking the salary cap hit now for the player. For example let’s say a team only has $4 million in cap room but wants to sign a player to a one year $10 million contract. You can not afford the $10 million in 2023 so you pay the player an $8 million signing bonus and add four “void years” which allows you to buy the player this year for just $3.6 million on the cap and then defer the other $6.4 million to the future.
The thought process behind this strategy is that the value of a cap dollar today is more valuable than a cap dollar in the future. In theory this makes perfect sense. Using the example above how does this impact that team’s salary cap? Here is how this works out as a percentage of the salary cap in 2023 and 2024 for the two scenarios (using an estimated $256M cap for 2024):
|Contract Type||% of 2023 Salary Cap||% of 2024 Salary Cap||Total|
|No void years||4.4%||0.0%||4.4%|
Even though the team is technically dumping a big cap charge into 2024 their overall cap situation over the two years is better as they will have more cap room to utilize by deferring the cap into 2024. This can be very advantageous for teams looking to stretch out their salary cap.
While the potential dead money can look bad, we have already discussed how having some dead money is typically a good thing as teams with dead money took risks and risks are necessary in the NFL if you want to win. It is also better to take on some dead money in the future rather than essentially burying dead money in the present by simply inflating the player’s salary cap hit for the year and then not having the space needed to add talent to team and cutting that player anyway. Those teams sometimes take a victory lap for “no dead money” with the “cash equals cap” philosophy but what victory is it when the team was bad the whole time anyway?
The downside to the void years is when you overutilize it for too many players or create scenarios where the cap hits to cut a player are so excessive that you get walked into an extension for salary cap purposes that you should never make. While some dead money is a good thing excessive dead money is generally a very bad thing.
For example, if we look at the current structure of Cowboys QB Dak Prescott’s contract he currently has $36.5M in dead money waiting to hit the books in 2025. He also has a cap number of about $59.5 million in 2024 which likely needs to be brought down. That will increase the 2025 dead number by something like $20 million. Basically Prescott will be in a position where he can write his own check at the age of 32 in 2025 in part because of the structure of the contract. Being leveraged into big contract is never a good thing even if for a good player.
The lack of void planning is the bigger issue to a team. The Buccaneers this year are carrying well over $70 million in dead money. About $53 million of that is from contracts all voiding in 2023, about 23.4% of the cap. A number like that becomes prohibitive to building a good team. Even if the “long term” may have been a better cap situation for the Bucs, by pushing it all into one year they essentially sacrifice a season due to the dead money and the fallout from that dead money which may have helped lead to the release of more players.
The Eagles have been the first to get very creative to avoid the impact of void years hitting at once by finding a way to get players to agree to allow themselves to be cut as a post June 1 cut rather than just having their contracts expire. The Browns have begun to follow the lead of the Eagles and more should follow but at some point agents and the players association will begin fighting back on this unless there is more of a benefit (i.e money exchanged for helping the team) to a player “managing the team’s salary cap” and making it easier for them to be cut. So I don’t think this will be a long term mechanism once it has more widespread adoption.
So really it is a situation that should not be as simple as some make it (just add void years and be good with the cap) but one that requires careful planning and execution. How are things looking in the future? Here is where the teams stand in the following years:
22 teams have potential contracts voiding out next year. The Saints, who have really been hurt by this strategy, have nearly $59 million potentially hitting the books, about 23% of the cap. The other team with a bad situation is the Vikings with $46.5M about to hit and $28.5 million of that total belonging to Kirk Cousins.
|Team||Players||Void Salary||% of 2024 Cap|
19 teams have potential contracts voiding out in 2025. The three standout teams are the Eagles with $59 million, Cowboys with $58 million and the Bucs with $54 million. For the Eagles this includes a number of veterans who will have been June 1 designations. Dallas has the Prescott situation in 2025 so this dead money likely won’t happen since they will extend him. The Bucs will have Chris Godwin and Ryan Jensen leading the way.
|Team||Players||Void Salary||% of 2025 Cap|
17 teams have potential contracts voiding out in 2026 with the Eagles approaching $90 million for the season. They have over $22 million for both James Bradberry and Darius Slay if they make it that far into their contracts and potentially $30 million for Jordan Mailata (I am unsure if this is already scheduled as a June 1, if it is that number will drop by about $20 million). The corners will likely not make it into 2025 partially because of the massive cap numbers they would carry in 2026 if they finished their contracts with the Eagles so I think this number would internally be looked at as much lower.
|Team||Players||Void Salary||% of 2026 Cap|