Eric Wright Signs For Minimum Salary Plus $1

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Yesterday the San Francisco 49’ers signed CB Eric Wright to a one year contract, which was noteworthy because they traded for him a few weeks ago only to nullify the trade based on a failed physical. His contract numbers came in today and I thought that they were a bit interesting.

Wright essentially took the minimum salary for a player with 6 years of service in the NFL, which is $715,000. Normally when one signs for that number their contract qualifies for the Minimum Salary Benefit, which allows you to pay a veteran player the minimum salary but only take on a cap charge of $555,000 in 2013.

Seemingly to avoid Wright’s contract from qualifying for that treatment the 49’ers gave Wright, according to NFLPA records, a salary of $715,001. The one extra dollar disqualifies the contract from being treated as a qualifying contract and thus he will carry a cap charge of $715,001 rather than $555,000.

Other teams have done this in the past. I remember the Jaguars doing it for someone simply because they needed to use cap dollars to comply with the salary cap floor of the old CBA. New England did something similar with WR Anthony Gonzalez last season. Why do such a thing? The answer likely lies in the potential upside of the player. For an older player on a Qualifying contract, like Calvin Pace of the Jets, there is no upside. The player is at the end of his career and is never going to get a big contract again.

Wright is a different case. He is only 28 years old and just one year removed from signing a five year, $37.5 million dollar contract with $15 million in guarantees. He has the talent to be a long term contributor. Once you sign a qualifying contract the CBA does not allow a team to extend or renegotiate the player’s contract, even after the season ends. While there is an exclusive negotiating window between player and team it is only applicable to a one year extension for the MSB.

In essence if Wright signs for the MSB he is going to hit free agency in 2014 and the 49’ers would need to compete with 31 other teams for his services. By taking the extra cap charge for just $1 dollar in additional cash payouts the 49’ers maintain an in-season negotiating window plus a February/early March period where they can extend him at any reasonable price the two sides agree upon.

The $715,001 salary represents the second paycut for Wright this season. Wright was originally scheduled to earn a fully guaranteed $7.75 million with the Buccaneers in 2013, but his suspension in 2012 voided the guarantee. He renegotiated his contract to reduce his salary to $1.5 million with a chance to earn an additional $1.5 million in incentives. That potential $3 million dollar contract was what the 49’ers originally traded for. Unless there are hidden costs to this contract that I am unaware of (and I’ll update you if I hear anything on that) he will now earn a maximum of $715,001 for the season, a far cry from the $7.75 million he was supposed to earn this year.

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Per Ian Rapoport of NFL.com the Tampa Bay Buccaneers have renegotiated the contract of CB Eric Wright reducing his base salary from $7.75 million to $1.5 million, a $6.25 million dollar paycut. While Wright can earn up to another $1.5 million in unknown incentives it is likely that these incentives will not count towards the salary cap in the 2013 season. This move leaves the Buccaneers with about $33 million in cap space which opens up a number of questions about what they plan on doing with the cap room.

First I just wanted to discuss the situation with Wright. Everyone is well aware that Wright signed a lucrative contract last year, but voided his guarantees when he was suspended in 2012. This left Wright in a bad position when it came to roster security. The Buccaneers are one of the few NFL teams that employ almost a pure cash to cap philosophy. Outside of rookies very few players on the roster have any cap protection that comes from the potential of dead money acceleration. Tampa Bay simply guarantees P5 salary, typically for two years, and once the guarantees vanish so can the player without penalty. Wright’s roster spot was clearly in jeopardy.

The decision to keep Wright benefits both sides. From Tampa’s perspective you have to consider where would they get another cornerback with the same upside at this stage of free agency? The answer is they couldn’t. $1.5 million is a bargain even in this market, The NFC South is a pass happy division in a much stronger conference making cornerbacks a premium position within the division. You need two of them in the division more than any other division in the NFL. From Wright’s point of view the cornerback market grew incredibly soft and he is coming off a very low point in his career. Free agency is basically at an end and the teams with the most cap room such as the Browns, Jaguars, Eagles and Bengals would likely not be looking for a player like Wright. Other teams might show interest but they may not even match the $3 million potential Wright gets in Tampa Bay. In return for accepting a low salary the remainder of his contract, per reports, will void, giving him a shot at free agency next season when, in theory, the market might be better. The other added benefit for Wright deals with the potential trade with the Jets for CB Darrelle Revis. If Wright plays alongside Revis he could benefit greatly from the situation.

The added cap space for the Buccaneers is only going to add fuel to the fire on the Revis speculation and I am going to feed into that here as well. The logical reason that the Buccaneers are interested in creating more cap room would be to frontload a contract for the injured Revis and protect their salary cap in the event Revis is not the same player post surgery. Remember how I said that the Buccaneers like to guarantee 2 years of a contract, well when you are looking to sign a deal with a Revis that is going to be a large amount of money. With $33 million in cap space and likely no first round draft pick to sign the Buccaneers could give Revis as much as $26 million in 2013 in both cap and cash considerations.

Per the rules of the CBA Revis would need to earn at least $13 million in 2014 to avoid the difference being treated as a signing bonus. Per my estimates the Buccaneers have around $98.25 in cap commitments in 2014 for 43 players, making a $13 million dollar hit very reasonable for the team. While they do need to either re-sign Josh Freeman or find a new QB, both moves are doable within the Bucanners cap especially considering that they could be parting with two number 1 draft picks in a trade with the Jets. Structuring a deal this way gets $39 million out of the way in two years, a number almost equal to the $40 million two year payout received by the Bills Mario Williams, who Revis is looking at as a guide for his contract. By using conditional guarantees in the third year of the contract the Buccaneers could likely structure a deal where Revis could be cut in 2015 with no or limited penalty if unhealthy.

The other more “out of the box” possibility is that the Buccaneers are creating cap space to essentially take on a salary dump from the Jets. In other sports we see trades for cash, something that can’t be done in the NFL. But if a team has the cap space to absorb a bad contract with guaranteed salary they can sweeten a trade offer by essentially taking a majority of the cash and cap obligation away from the trading team.

The Jets have three bad contracts on their team that contain minimal prorated money but guaranteed base salaries. These guaranteed salaries essentially prevent the Jets from cutting the player but by no means prevent the trade of a player. The two big ones on the books are LB David Harris and WR Santonio Holmes. Harris has $9.5 million in fully guaranteed salary in 2013 and a $13 million dollar cap hit. If traded Harris’ dead money would only be $4 million freeing up $9 million in cap for the Jets. Holmes carries a $9 million dollar cap hit, $7.5 million of which comes from a fully guaranteed base salary. Trading Holmes frees up $5.25 million in cap space for the Jets. The other name is QB Tim Tebow, who only carries a $2.586 million dollar cap charge, of which $1.531 million is owed to the Denver Broncos. None of these 3 players, to the best of my knowledge, carry any guaranteed salary in 2014 pretty much making them a 1 year rental for Tampa with no damage done to their future salary cap.

Of these names the two that make the most sense would be Holmes and Tebow. Holmes, if healthy, could be a good complement to WR’s Vincent Jackson and Mike Williams giving Freeman another weapon in the passing game. Holmes could be convinced to play the slot in Tampa. The money he would free in cap space would balance out the $3 million loss of cap from Revis and the $1.83 million cap charge the 13th pick in the draft should carry making the trade much more acceptable to the Jets. If Tampa has to part with a 1st round pick in 2013 plus a 2nd or another 1st in 2014 the addition of a second contributing player in the trade will make the price more acceptable to the Buccaneers. Tebow does not benefit in the same way, but gives the Jets the chance to save face and money from the ill advised trade with the Broncos. The low cap charge for Tebow would not impact the Bucs ability to frontload a deal with Revis the way Holmes’ would.

While nothing more than wild speculation on my part I do think that it can provide a pretty interesting way to manipulate the salary cap that has not really been used at all in the past. As more teams move towards the cash to cap philosophy it could open the door for more teams to consider trades as a normal business operation to fix a teams salary cap.

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