Philip Wheeler and the June 1 Cut

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With most of the NFL world congregating in Indianapolis for the NFL combine, the rumors are starting to pick up.  While most of the talk is focused on whispers of which teams are looking to strike in free agency, there are a few more subtle storylines lingering.  One of these was this little nugget from @VicTafur, who covers the Oakland Raiders and NFL for the San Francisco Chronicle. 

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I haven’t discussed my background yet on the site, but this may explain why I found this rumor more interesting than most others.  I am a native of Miami, Florida and grew up a fan of the Dolphins.  The linebacker swap of Karlos Dansby and Kevin Burnett for Dannell Ellerbe and Philip Wheeler has remained a hot topic among Dolphins fans since last year’s free agency. While Ellerbe and Wheeler both struggled mightily, Wheeler has caught significantly more criticism and become the focal point for explaining what is wrong with the Dolphins’ defense among fans. With rumblings of Wheeler’s future being uncertain I wanted to clear up some confusion I have been encountering regarding “how” Wheeler should be cut if the Dolphins choose to move on. 

Wheeler signed a 5-year/$26 million dollar last offseason, and below is the breakdown of the remaining 4 years.

 

P5 Salary

Signing Bonus Proration

Workout Bonus

Cap Number

2014

$5,000,000

$1,400,000

$0

$6,400,000

2015

$2,900,000

$1,400,000

$100,000

$4,400,000

2016

$4,900,000

$1,400,000

$100,000

$6,400,000

2017

$4,900,000

$1,400,000

$100,000

$6,400,000

The simple fact is that this deal was not designed to be a one-year deal, or even a two-year deal for that matter.  And because of this, the notion of moving on from him after one year is costly.  Many fans, mistakenly, try to justify cutting Wheeler by throwing out the idea of using the June 1st Designation as some form of “money-saver”.  I found this contract situation to be a great illustration of what the June 1 Designation is designed to do, what it is not designed to do, and how it affects Wheeler.

The June 1 Designation is a mechanism to defer the acceleration of prorated signing bonus money for one year.  The NFL has decided that June 1 is somewhat of a dividing line between Salary Cap years.  When you cut a player outright before June 1st, the remaining guarantees in P5 (base) salary and outstanding prorated signing bonus money accelerates on to the current season’s cap.  After June 1st, only the current year’s expense stays on the books.  The June 1st designation allows a team to cut up to two players prior to the June 1st deadline that are to be treated as if they were cut after June 1st.  One misconception here is that many believe designating a player a June 1st cut allows you to spend more money in Free Agency in March when in fact it does not.  When a player is designated a June 1st cut, they must remain on the books until June 1st, at which point the relief is granted, enabling a team to create space to sign their rookies or to have some breathing room in their cap for the season.  The real benefit of using the June 1st cut is for teams that are very tight against the cap in the current season and simply cannot afford to take the lump sum of accelerations in the current year.  By using the June 1st cut, it defers the later guarantees and prorations until the following season.  The team does not “save” this money, but rather pushes the payment back one year.

How does this affect Wheeler?  Well once the misconception that the June 1st designation somehow saves money over a regular cut is put to rest, and it is understood that it is only a deferment of payments, Wheeler’s future becomes clearer.  I think the best way to illustrate this will be to just show what it looks like to keep Wheeler, cut him outright and cut him as a June 1st cut.

 

Keep Wheeler For the 2014 Season

 

P5 Salary

Signing Bonus Proration

Workout Bonus

Cap Number

2014

$5,000,000

$1,400,000

$0

$6,400,000

As you can see above, if Wheeler plays the 2014 season on his current contract, he will count $6,400,000 against the cap.

Standard Cut Prior to June 1st

 

P5 Salary

Signing Bonus Proration

Workout Bonus

Cap Number

2014

$5,000,000

$1,400,000

$0

$6,400,000

2015

$2,900,000

$1,400,000

$100,000

$4,400,000

2016

$4,900,000

$1,400,000

$100,000

$6,400,000

2017

$4,900,000

$1,400,000

$100,000

$6,400,000

What I have done above is show what the remaining four years of Wheelers contract looks like but crossed out all the money that would be wiped clean if he is cut.  As you can see, only Wheelers 2014 P5 (base) salary of $5,000,000, which is guaranteed, and the remaining prorations of his signing bonus would need to be accounted for in the cap.  Because a standard cut accelerates all of the remaining guarantees in P5 (base) salary (there are none remaining for Wheeler) and remaining signing bonus prorations, Wheeler’s 2014 cap hit would look like this.

 

P5 Salary

Signing Bonus Proration

Workout Bonus

Cap Number

2014

$5,000,000

$5,600,000

$0

$10,600,000

Total cap spending on Wheeler for 2014-2015 = $10,600,000

There are two important factors to remember here.  First is that this would clear the Dolphins of any future commitments to Wheeler, they would be biting the entire bullet in 2014.  The second thing to remember is that now Wheeler’s roster spot has to be replaced and effectively the total cost of his roster spot for 2014 would be $10.6m PLUS the cost of his replacement.

June 1st Designation Cut

 

P5 Salary

Signing Bonus Proration

Workout Bonus

Cap Number

2014

$5,000,000

$1,400,000

$0

$6,400,000

2015

$2,900,000

$4,200,000

$100,000

$4,200,000

2016

$4,900,000

$0

$100,000

$0

2017

$4,900,000

$0

$100,000

$0

Total cap spending on Wheeler for 2014-2015 = $10,600,000 (same as standard cut)

Above is what the June 1st Cut would look like.  Here the 2014 cap commitment is only his guaranteed $5,000,000 P5 (base) salary and his 2014 prorated signing bonus of $1,400,000.  Unlike the standard cut, the Dolphins are still cap committed for the 2015 season, which is the remaining $4,200,000 (1.4×3) of signing bonus money that needed to be accounted for.  As you can see, the only difference between the standard cut and the June 1st cut is not whether or not Wheeler saves any more or less money on the cap, but rather WHEN the money has to be accounted for.  Again, the June 1st Cut is a deferral mechanism, not a money saver.  You save the exact same amount of money whether you cut a player normally or with the June 1st cut, it’s only a question of how you want the payment plan to be.

Again, because Wheeler is no longer on the roster, the cost of a replacement player has to be accounted for as well.

With the breakdown above, I have one fundamental question.  Even if you believe Wheeler is going to play as poorly as he did last year, or even worse, what benefit do the Dolphins get from cutting him, either outright or as a June 1st?  An open roster spot at the end of the bench?  At the very worst, he should be the best backup linebacker, on your team because there is no benefit to cutting him.  Even though he will be being grossly overpaid, you are either going to be accounting for him on the cap whether he is in a Dolphins uniform or not.  There is one other option –a trade.  Much like the Cardinals and Jaguars did last year with Levi Brown and Eugene Monroe; the Dolphins could pay a portion of the money owed to Wheeler to a willing trade partner, which would mitigate some of the damage of moving on from Wheeler.  If he improves, now that’s just an added bonus.  But because of all this, I would be shocked if the Dolphins chose to cut Wheeler, with either designation, or find a willing trade partner and expect him to be on the Dolphins roster in 2014. 

 
Ryan Feder
Tulane University Law School
J.D. Candidate 2015
@RyanFeder
rfeder1@tulane.edu

Questions about this article? Reach Ryan Feder on Twitter at @RyanFeder