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New Podcast covering the Dolphins, the Eagles and DeSean Jackson, plus some thoughts on which teams had the best and worst offseasons in terms of salary cap moves.
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cowboys
The Cowboys and Paycut Options for Doug Free
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We’ve touched on the Dallas Cowboys and their cap woes many times and also on the reasons why RT Doug Free remains on the Cowboys, but since he is back in the news I just wanted to add some thoughts.
According to Mike Fisher the Cowboys are asking Free to take a salary reduction from $7 million to somewhere between $3.0 and $3.5 million. The number makes sense as it’s the same salary that is being received by fellow castoff Tyson Clabo, just recently signed by the Miami Dolphins. The question is would Free agree to take such a paycut?
Free’s contract is one of many that is a landmine for the Cowboys. If Free is cut his dead money charge is $10.02 million, exactly the same as if he was on the team. Considering the Cowboys need to replace him on the roster technically they will lose net cap space by a release. The team could defer $7 million in charges to 2014 by designating him a June 1 cut giving the Cowboys the room they need to function in 2013. While that sounds like a bad option for a team with a 2014 payroll that is going to be well over $145 million, the fact is that 2014 number already includes Free’s bloated salaries and was going to contain the $7 million of dead money barring a miracle anyway.
For all the grief I have given the Cowboys and their cap management I actually think their handling of the Free situation has been very well done. They allowed to let the market dictate a price for Free and by waiting have limited Free’s options if released. If Dallas would have approached Free earlier in the year the likely response would have been “why would I take a paycut”. Dallas was not in a great position to release him and Free could always have a chance of earning money elsewhere. For it to be worth Free’s time Dallas would have probably needed to meet in the middle, going for a $2 million dollar paycut. In essence Free is going to get paid extra money than he would earn on the market by agreeing to help the Cowboys salary cap.
Now Free’s options are less appealing. Teams have drafted tackles. Clabo just signed with Miami. Eric Winston is still floating around in free agency. This isn’t a scenario where Free can say “Ill just sign elsewhere rather than cutting you a break” anymore. $3 million is probably the most money Free can now get from anyone in the NFL. You may even be able to say that it’s a generous offer for Free to get this much money. So he is almost in a position where he is stuck to take the paycut because he has almost no leverage anymore.
From a cap perspective Dallas’ best option might be to hope he can turn things around and actually fully restructure both 2013 and 2014. If Dallas is willing to pay Free $3.5 million this year then they are willing to commit $13.54 million in cap dollars over the next two years to Free, made up of a $3.5 million salary and $3.020 million proration in 2013 and $7 million in dead money in 2014. If Free would be willing to take a $3.5 million salary in 2014 Dallas could save a few dollars in overall cap and maintain Frees spot on the roster. I have no idea if Free would agree to that but its worth considering. Dallas’ cap problems are always going to lead to deferrals of cap charges but Dallas may be able to do themselves some good to get their 2014 more manageable now.
What would I do? Free is so bad I would probably use the June 1 designation on him and sign Eric Winston who would probably play for the same amount of money. I see that as a 1 year upgrade and will result in the same cap charges as Free taking a paycut now and then being cut next season, which is the most likely scenario. The one thing that I would never do is add more prorated money to the contract under any circumstances. I don’t think the Cowboys will do that but with them you never know.
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Preparing for the Future- The NFC East
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Dallas Cowboys
I guess with Dallas what you see is what you are going to get for the next few years. The Cowboys already have a full complement of players under contract for 2014 and a league high payroll that is over $145 million. Four Cowboys are set to be free agents in 2014 and its unlikely that there is a legitimate avenue to keep any of them given the Cowboys cap circumstances. In 2015 the Cowboys have $130 million on the books for just 20 players. Basically a Tony Romo restructure is going to need to be done just to keep the team cap compliant. Given Dallas’ situation they absolutely need to hit in this years draft and on a few selections. Despite the hefty cap numbers for Dallas they need help on the offensive line, at running back, and at Safety. In terms of long term planning they need down linemen with half of their defensive front set to be free agents plus Jay Ratliff seemingly close to done. While I don’t think Dallas would trade up it would be such a mistake to even consider. If anything they should trade down and look to cut away from some high priced veterans and replace them with younger talent. IMO, this is a crucial draft for Dallas because if they fail to hit the crash in Dallas when the bill comes due in 2015 is going to be really bad.
New York Giants
The Giants are another team with a difficult cap situation and don’t expect them to be finished tinkering with the pay structure of their roster just yet. The Giants don’t have enough cap space to function come the summer and fall so they need to restructure some players or cut players outright. I’ve seen this type of scene play out many times before and typically right after the draft you will see some cuts based on positional selections. If I was Chris Snee or Antrel Rolle I would be worried about my position on the team and ability to maintain my salary for the season. The Giants only have $101 million or so commited to the 2014 salary cap but with deals needed for WRs Victor Cruz and Hakeem Nicks that cap space could vanish in a hurry. Cruz is an 8 million or so a year player while Nicks, if he has a good and healthy season, could top $12 million a year. The Giants would be best suited to lock Nicks up now because he has the most to gain in free agency while Cruz’ value seems pretty locked in unless Percy Harvin sets the world on fire out in Seattle. If they intend to keep the two wideouts that means they have no choice but to fill their other issues- offensive line and secondary- through the draft. The Giants love to draft pass rushers and that’s always a possibility but I don’t know if they can ignore these other areas in the draft, Their defense clearly needs more balance.
Philadelphia Eagles
The Eagles are the only team in the NFC East without cap problems due to superior cap management skills and philosophies over the past few seasons. While they grew a bit too start struck the last two years they have a system in place that actually allows they to retool on the fly rather than go with a full blown rebuild like most teams go through when seasons don’t go as planned. The Eagles have around $120 million committed to 2014 but are poised to carryover $20 million from the 2013 year to 2014 to give them cap room ti improve the team. With over 51 under contract the cap number isn’t really an issue. One of the ways that the Eagles stood out to me this year compared to some other squads with big cap space like the Colts is that they did not overspend. They ate all of Mike Vicks money this season and set the plate to spend more in the future when and if the free agent classes are improved. Just because you have a lot of cap room and low priced QBs doesn’t mean you need to spend it and the Eagles avoided that trap. With 30 players under contract in 2015, tied for most in the NFL, the Eagles have a long term solution in place if things go well while maintaining the flexibility to move away from those players without much cap pain. Philadelphia has a ton of options in the draft since they pick high in so many rounds. Given that they are looking for more pieces to fit the new coaches system they would seem like a logical trade down team. Given the uncertainty in their QB situation they may be a team looking to amass picks to use next year to get a QB since the team should find out everything they need to know about Foles this year. The team needs major help along the offensive line and don’t let the big contract of Jason Peters fool you into thinking they won’t draft his replacement.
Washington Redskins
In many ways I think that the cap penalty was a blessing in disguise for the Redskins. For years the Redskins have overspent on mediocre talent and this penalty kept them from doing just that this season. While they have spent more than I would have liked to see they do have 47 under contract in 2014 and only $106 million or thereabouts committed to the cap. Those are very reasonable numbers for a team whose QB will likely begin entering his real prime provided he is healthy. That said the Skins have work to do if they want to sign their rookies as they are running right on the cap right now. I tend to think some will say that the Redskins will look to get RGIII more weapons in the passing game but the smarter move will be to improve their defense which can upgrade at multiple positions. The defense has 7 starters who are on their contract years and a number of key subs on their final year. Plus the defense is not that good to begin with. The Redskins relied too much on RGIII in 2012 and they need to balance that out somewhat by building a better defense. If the QB is healthy they can get by with some patchwork pieces for the time being as he looked so good last season he doesn’t need all great players around him and he already has the running game to rely on. The trade for RGIII depleted their draft reserves so using what hey have and not getting caught up in trading games again is the teams best chance for success.
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Valuation Metrics for the Clay Matthews Extension
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After weeks of rumored contract negotiations between the Green Bay Packers and LB Clay Matthews, the two sides made it official that Matthews would not become the highest paid outside linebacker in the NFL, surpassing the $13 million per year that the Cowboys DeMarcus Ware received in his 2009 contract extension. While no numbers are in as I am writing this (who knows by the time I’m finished) I wanted to look at the two real benchmark deals ahead of time so that we can get a better idea of just how strong the contract really is. The two deals I want to look at are those of Ware and the Ravens’ Terrell Suggs.
When I evaluate high level deals like this for the site I like to look at two sets of numbers- yearly cash flow and functional guarantees. The cash flows are pretty self explanatory. Functional guarantees are the amount of money that a player will actually earn not just because of the guarantee but because of the structure of the contract which comes with prorated bonus protections that leads to excessive dead money if cut.
Ware’s case is more similar to Matthews in that both were currently under contract to their teams on rookie contracts when they signed their extensions. Suggs had gone beyond the rookie deal and was on a franchise tag. The following cash flows represent the new money totals per year for the players
Ware | Ware Total | Suggs | Suggs Total | |
| Year 1 | $32,800,000 | $32,800,000 | $15,100,000 | $15,100,000 |
| Year 2 | $7,200,000 | $40,000,000 | $24,900,000 | $40,000,000 |
| Year 3 | $5,000,000 | $45,000,000 | $3,400,000 | $43,400,000 |
| Year 4 | $6,000,000 | $51,000,000 | $4,900,000 | $48,300,000 |
| Year 5 | $12,750,000 | $63,750,000 | $6,400,000 | $54,700,000 |
| Year 6 | $14,250,000 | $78,000,000 | $7,800,000 | $62,500,000 |
The first benchmark for Matthews is clearly the $40 million over a two year period, matching what both Ware and Suggs received. Ware’s number is a bit more misleading since it actually took him 3 years to reach $40 million due to the prior year contract not counting in the calculation. If Matthews surpasses $45 million over his first three extension years he will get the best deal of the group. Matthews was already set to earn over $3 million this season which would mean his 4 year total would surpass Suggs’ 4 year if he gets $45 million over the first three new years of the contract. Ware’s contract was filled with big money at the end which normally wont be earned which is why I want to go to the functional guarantees next, first with Ware and then with Suggs.
Ware:
Base | Prorated Money | Misc. | Cap Number | Dead | Savings | |
| Year 1 | $7,800,000 | $5,430,693 | $0 | $13,230,693 | $25,226,772 | ($11,996,079) |
| Year 2 | $6,700,000 | $3,998,693 | $500,000 | $11,198,693 | $11,996,079 | ($797,386) |
| Year 3 | $4,500,000 | $3,998,693 | $500,000 | $8,998,693 | $7,997,386 | $1,001,307 |
| Year 4 | $5,500,000 | $3,998,693 | $500,000 | $9,998,693 | $3,998,693 | $6,000,000 |
| Year 5 | $12,250,000 | $0 | $500,000 | $12,750,000 | $0 | $12,750,000 |
| Year 6 | $13,750,000 | $0 | $500,000 | $14,250,000 | $0 | $14,250,000 |
Suggs:
Base | Prorated Money | Misc. | Cap Number | Dead | Savings | |
| Year 1 | $1,000,000 | $2,020,000 | $4,000,000 | $7,020,000 | $14,100,000 | ($7,080,000) |
| Year 2 | $1,900,000 | $6,620,000 | $0 | $8,520,000 | $31,080,000 | ($22,560,000) |
| Year 3 | $3,400,000 | $6,620,000 | $0 | $10,020,000 | $24,460,000 | ($14,440,000) |
| Year 4 | $4,900,000 | $6,620,000 | $0 | $11,520,000 | $17,840,000 | ($6,320,000) |
| Year 5 | $6,400,000 | $6,620,000 | $0 | $13,020,000 | $11,220,000 | $1,800,000 |
| Year 6 | $7,800,000 | $4,600,000 | $0 | $12,400,000 | $4,600,000 | $7,800,000 |
This actually drives home a major difference between the two contracts. The fact that Suggs got massive prorated bonus money rather than base salary guarantees in the first two years of his deal make him virtually uncuttable for the first 4 years of his contract and even Year 5 is a difficult choice. This would be a functional guarantee of $48.3 million with a decent chance of earning $54.7 million before being released.
Ware, before Jerry Jones went wild with the restructures, did not have that protection upon signing. In this case I would consider the first two years functionally guaranteed with a decent chance of the third year being earned. So the reality is its $40 million and a good chance at $45. If his play trailed off he would have been a prime candidate for a restructure in year 4 and easily cut beyond that. In reality his year 5 and 6 were nothing but funny money. Now Dallas has virtually guaranteed the whole contract because of their cap problems, but when signed Suggs had the far better contract structure despite lower money totals.
For Matthews to come out on top of the market he needs a structure that is closer to that of Suggs. Something that functionally guarantees him those first four years and a great chance at 5 years. If he can reach that $51 million over 4 year plateau and have a structure that makes it difficult for the Packers to wave good bye in 2018 he will truly have the best contract in recent memory at the position. If the Packers have outs early on and his cash flow is similar to that of Ware it may be a case where it’s a deal that looks better on paper than it plays out in real life, especially since the Packers are not going to get in a deep mess the way the Cowboys did.
Cowboys look to Sign Eric Winston
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According to Mike Florio of Pro Football Talk the Dallas Cowboys are prepared to sign RT Eric Winston, arguably one of the top right tackles left on the market. Of course then that leaves the question as to what the cap strapped Cowboys do with current RT Doug Free. Free is set to count for $10.02 million against the 2013 salary cap but due to a prior restructure in 2012 will also count for $10.02 million in dead money if released. That leaves Dallas with a situation where they either need Free to accept a paycut to remain in Dallas or to designate him a June 1 cut.
Dallas currently has about $4.5 million in cap room which is enough to fit both Free and Winston on the team for the time being. The problem comes once July rolls around and the Cowboys need to sign their rookies and earmark funds for the season when the cap calculations expand to 53 active plus all other paid players. Marcus Spears will come off the books on June 2nd, freeing up an additional $1.7 million in cap space, but that will not be enough to cover the cap space needed for the season.
Designating Free a June 1 cut or simply waiting until June to release him would save the Cowboys $7 million in cap space in 2013. That $7 million would need to be accounted for in 2014. While on the surface that sounds like a bad thing for the Cowboys, considering Free does not factor into the teams long term plans anyway his 2014 $7 million dollar hit was going to hit the books in 2014 whether or not he remains in Dallas in 2013. Considering the Cowboys cap starved position over the next two years cutting Free now if probably the more prudent option rather than paying him a salary in 2013 that eats into the teams carryover, however limited it may be, making the navigation of 2014 that much more difficult. The one option Dallas can not consider is restructuring his contract to prorate more money and damage the future salary cap that much more.
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Podcast: QB’s, Cowboys, Raiders, Jets, Cap Management and More….
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Touching on the QB moves of the week plus some questions answered on the Cowboys, Jets, and Raiders. I think I have this set up for itunes now but Ill check that in the morning.
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Twitter Q&A and An Introduction- March 5
Well before we get started I’d like to introduce everyone to Jim who is one of the new contributing writers on the site. Jim is a big Raiders fan and an amateur capologist. He’ll be popping in from time to time with his thoughts on the cap and probably doing quite a bit of Raiders related posts, as the Raiders are always a hot salary cap topic. Unfortunately for Jim its rarely positive but one of these days it has to. Onto the Q&A:
33,( who looks like a big Tony Dorsett fan)- Does the cap increase in the next several years? If so, how does this play into the process of cap planning?
Thats a great question and its one that I certainly can’t fully answer. While the cap does increase every year the projections seem to be that it will remain pretty flat even as the new TV contracts roll in. The union has had to make a number of concessions to get the cap to be even where it is today so my guess is there will be limited growth. That being said projections are nothing more than educated guesses and can change at ant time.
As for the second part of the question it absolutely plays a role. As the salary cap inflates so can contracts. It is far better for a team to shuffle cap dollars to the future because those cap dollars will, in theory, eat up much less of a percentage of the cap than they would in the present. Back in 2006 when the new CBA went into effect teams planned contracts with a certain projection in mind, but by 2007 when the cap begin rising substantially so did the pushing of money and contract values. The problem for teams now is that the cap remains at the same levels at 2009 but star player salaries keep rising. That was one of the points I was trying to make on the Flacco contract. When Eli Manning signed his record breaking deal worth $16.25 million it was on a cap of $123 million rising $5-6 million a year. The pushing of salaries from that period have essentially made that contract worth nearly $21 million a year but, with a flat cap, it eats up a far larger percentage. To try to protect themselves from that reality the Ravens designed the cap hits of the contract to remain low for the next three years hoping that by 2016 the cap grows substantially making Flacco’s high end numbers seem more reasonable.
From @ross_christie- How much of a contract will a player actually get? Is it just the guaranteed money?
Depends on the quality of player and structure of the contract. If you look at our releases page you can get a good idea as to just how much players earn before being released. Most probably earn around 50% of the contract and in many cases that is because of the protection that was built into the contract. Players that have strong representation, especially those who negotiate with weaker front offices, are able to craft player friendly contracts that make it difficult to release the players. The fact that signing bonus money is prorated and all accelerates onto the cap if released provides another layer of contract protection besides just the fully guaranteed money. A player that can negotiate a large signing bonus in conjunction with fully guaranteed salary will most likely earn more than players with more guaranteed money but no bonus protection. I would say that it is pretty rare for a player to actually play out his entire contract without ever having a paycut.
From @WeightyThings- For Bowe’s contract structure, what do you think their primary concern was in organizing it? Any player contracts coming up?
I think their main concern was getting a cap friendly deal in year 1, which they accomplished with a $4 million dollar cap hit in year 1. The Chiefs dont really have any cap issues on the horizon so they knew they could deal with the higher cap hits in years 2-5. This maximizes their chances to attract free agents and change the culture in Kansas City.
From @Dessedrengen- how is it possible for Dallas to get under 123.0 when they are at about 126 now, and then the cap penalty?(10mil$ if I guess)
The Cowboys cap penalty this year is $5 million and their adjusted cap, after carryovers, should be around $120.3 million. They did get under the cap for a brief moment before tagging Anthony Spencer. I estimate them to be around $5.6 million over the cap. I cant really see how they will get under the cap without extending Tony Romo. They were going to pay him ton anyway, but I have a feeling it will be even more now. Romo has all the leverage in the world because Dallas has almost no other options as they have restructured almost everybody on the team. Statistically he can point to Flacco and state a case he deserves close to that, though Romo is older so I cant see that working. Other options would be to restructure Doug Free but he already has a large dead money hit close to $4 million in 2015 at which point his contract should void. Its ugly in Dallas and only going to get worse
From @WeightyThings(a 2nd questions)- Now that Tyson Jackson is back at 5.2 million, what is the Chiefs salary cap looking?
Sometimes initial reports can be wrong, but based on what was reported the Chiefs gained at least $9 million in cap space. It is likely more than that as the way the reports have been worded make me think he needs to reach certain performance levels to even earn that much. If that is the case they will save more against this year cap. The team probably has around $12.5 million though that does not include the deal for Alex Smith.
From L_A_RAIDERS- The New Regime has only been here 1 year…isnt that statement a little pre mature?? What Crazy contract has Reggie Handed out?
This was in reference to a statement I made on the Raiders decision to continue to not release players but instead keep extending. Its a fair question. I think when you have a situation as bad as the Raiders you have to be willing to make very difficult decisions. They continued to make many of the same moves as the previous regimes. In Richard Seymour’s case they added another void season onto the end of his contract to just increase the inevitable dead money in 2013, which is close to $14 million. They re-signed LB Aaron Curry, who had shown nothing, to a deal that contained 3 voidable contract years and they fully guaranteed his 2012 base salary. He was gone by November. They used a similar void trick to bring Carson Palmers numbers down in 2012 which has just added to more dead money issues either in 2013 or 2014. I just think the abuse of these void years and salary conversions makes it impossible to ever get out of this hole and based on the most recent restructure of a player that most Raider fans seem to think doesnt even fit their offense it just seems to be the same approach. Maybe the moves of 2012 were done out of absolute necessity, but this last one was not.
From @Donkey_Kang With the inflated price of cornerbacks is it more likely the Chargers draft one in first 2 rounds than sign one for big money?
I could see salary cap playing a role for some teams in the draft but I have to think the Chargers are simply in BAP mode. But as a general question if you can find a QB, DE, CB, or WR in the draft you are well ahead of the game in your positional spending. The ability to have rookie contracts playing those position is a huge advantage.
Feel free to keep asking me questions either on Twitter, email, or in postings. Ill try to answer them as best I can in the future.
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