With the NFL trade deadline approaching, I had been thinking about how teams in the NFL structure contracts and how aggressively they also pursue/extend certain players. Contracts wind up being restructured for salary cap relief and teams often overpay to land players in free agency or to avoid the negativity that comes with a holdout. But what are the long term impacts and can that help teams find ways to be more cautious in their approach.

First of all here is a look at the top spending on “dead money” from 2021 through October 24, 2023.

This tells us a little bit about what positions wind up being cut and/or traded but it doesn’t give great context. For example the NFL employs a large number of wide receivers and many who make it to a 2^nd contract get paid at a pretty high level, so maybe it is to be expected that they lead the NFL in dead money.

To try to put the cap charges in context I went back and looked at how much every team spent in cap dollars on their active roster from 2021 to 2023 and compared that to how much dead money was spent during that same timeframe:

I thought these numbers were interesting. Not surprisingly QB has been a pretty risky proposition. They fall into the bucket of players that teams do not hesitate to extend because the consequences of losing a good QB could be devastating, but at the same time teams fall out of love with those players as soon as things go south (think Carson Wentz and Jared Goff with the Eagles and Rams). Because the salary cap charges can be so high they are also prime restructure candidates which just pushes the money forward leaving teams with a big bill later on. My gut feeling is because of the restructures the active cap numbers are low relative to the contract size which leads to a misleading result, but I do think it is clear that teams need to be more cautious than just the blanket approach of “just restructure the QB’s contract for cap relief).  

Linebacker surprised me. There is generally limited upside to signing a linebacker and to have this much dead money in the position is absurd. This is fueled by some big extensions and free agent signings and once things go bad for a team these are the players often cut or traded because the upside is considered limited by a new or existing GM looking to rebuild. These numbers should be a big red flag to any team considering the big investment in the position.

Wide receiver and cornerback come in at 3 and 4 and this is not too surprising. These are positions that are paid highly and athletically I think the players fall into a similar category. Age seems to be a big factor here and more often than not the peak seasons for a receiver and corner are at the tail end of their rookie contracts. When the athleticism begins to go either from age or accumulation of injuries the productivity falls. Corners probably have more chance to rebound but by that point teams have moved on and the rebound season often comes on the cheap somewhere else.

Running back rounds out the top five to the surprise of nobody. Those big contracts are simply the result of a GM being convinced that while the big contract is a bad idea for every player in the NFL his guy is the lone exception. There are basically no exceptions at this position. Its lighting cap dollars on fire in a dumpster.

As you move down the chart I think you will see a nice trend with offensive linemen. Guards have a 6.9 active to dead money ratio and 12.6% of all money is dead money. That’s not terrible. Even better are the offensive tackles. Right tackle is at a 9.2 ratio and left tackle is at a 13.6!

On the defensive side the interior D-line and safety both stand out as less risky signings. The interior linemen have the 2^nd most active cap charges in the NFL over this period but rank 6^th in dead money. Safety certainly is not the highest paid position but teams are not putting a ton of dead money in there either. Only the offensive tackles rank better among the standard positions.

II think when you get into cap management one of the things you need to consider is the diversification of risk. Teams often settle for just taking the largest contract on the team, dropping the salary to the minimum and kicking the can with the rest.  If (when?) that player implodes the cap consequences can be considerable. If we take an approach of taking a little from a few spots teams can probably cut back on the timing of some of the dead money they take on over time.

When it comes to restructures teams are probably underutilizing the offensive line and the defensive positions mentioned above and focusing too much on a handful of players simply because they have a big cap charge.

As we get into some of the dead money totals I think it also is clear that the NFL should proceed with caution on some of their extensions and signings. Sometimes the contract haggling is necessary even with the negatives that come with how it sometimes plays out when it comes to extensions on these big positions. Similarly when you look at the impact of linebacker, running back, etc… there is no logical reason to be so aggressive on those positions when the dead money is so high relative to the position. There is a payoff when the QB is great. There is a payoff when the WR remains great. The payoff is nowhere near as high when  the expensive RB is great and the costs are too high to waste the resources there.