Dead Money and the San Diego Chargers

[adsenseyu1]

A few weeks back, I wrote an article summing up the dead money totals the Dallas Cowboys may have hit their salary cap over the next few years (that post can be found here – however it is not updated to update Tony Romo’s new dead money totals). After writing that post, I thought it would be fun to take a similar look at different teams. Choosing a team at random for this one, I ended up going with the San Diego Chargers. For an explanation on the concept of dead money and its effect on a team’s salary cap, check out the second paragraph of the Cowboys post. Since Dallas is the only other team I’ve done a dead money post on, that’s the only team I can compare the Chargers to as of now (so don’t get too mad Cowboys fans!). Keep in mind that these costs are going to go up in the near future as draft picks sign their deals. Here’s how the Chargers’ dead money future looks:

2013

Not much of a point in going in detail about the Chargers’ 2013 dead money count since the majority of these players will be on the roster anyway, thus meaning most of these players won’t actually result in dead money this year. For what its worth, San Diego currently has 37 players that would account for a total of $100,083,637. The average age of these players is 27.05 while the average age of the top 5 potential dead money hits (Robert Meachem, Derek Cox, Eric Weddle, Malcom Floyd and Antonio Gates) is 29.4.

2014

In 2014, the Chargers currently have 31 total players that could accumulate for a total of $55,321,917. Of those 31 players, 16 of them would have dead money totals of over $1,000,000 (the total dead money for those 16 together would be $50,062,186). The good news for San Diego is that of the 7 with the highest potential dead money hits, 5 of them will be under 30 that season:

Derek Cox (Age 27): $8,150,000

Eric Weddle (29): $5,200,000

Malcom Floyd (33): $5,083,334

Antonio Gates (34): $4,725,000

Melvin Ingram (25): $4,212,600

Robert Meachem (29): $3,750,000

Ryan Mathews (26): $3,267,000

2015: 

In 2015, the Chargers have 17 players with potential dead money hits for a total of $19,382,920. The average age of these 17 players is 29.24. Once again, age is on the team’s side here as of the top 5 players, 4 are ages 30 and under (the oldest is Antonio Gates, 35). Here are the 5 highest potential dead money hits:

Derek Cox (Age 28): $2,600,000

Eric Weddle (30): $2,600,000

Antonio Gates (35): $2,362,500

Melvin Ingram (26): $1,922,169

Robert Meachem (30): $1,875,000

Compare that to the Cowboys’  20 players for $56,492,180 (prior to the Romo extension), with 8 of the top 11 potential dead money hits being age 31 and over, safe to say at this point the Chargers have done a better job with cap management.

2016

The Chargers only have 4 players with potential dead money hits in 2014, for a total of $2,387,500. Those players are:

Derek Cox (Age 29): $1,300,000

Mike Scifres (35): $600,000

Nick Novak (35): $375,000

Mike Windt (30): $112,500

You really couldn’t ask to be in a much better situation dead money-wise down the road, so kudos to the Chargers for doing a great job of managing their potential accelerated costs. Just to compare further, the Cowboys have 13 players with potential dead money hits in 2016 for a total of $32,079,050 (again, prior to Romo’s deal), with only 3 of those players under 30. Of course, this in no way means the Chargers will be fielding championship, or even competitive teams in these upcoming seasons. It just means the Chargers will have a bit more flexibility since a large portion of their dead money is tied into younger players (meaning these players are less likely to be cut and as such, will not result in dead money acceleration). This is a great example of how some teams manage their cap well by giving themselves flexibility down the line, while others, well, just don’t.

To check out the Chargers’ salary cap projections, click here.

Twitter: @AndrewOTC

Chargers Place Lowest Possible Tender on RFA Danario Alexander

[adsenseyu2]

Word leaked earlier today that the San Diego Chargers placed the lowest possible Restricted Free Agent tender on wide receiver Danario Alexander. This means that if the Chargers refuse to match an offer sheet Alexander signs with another team, they will receive no draft pick compensation. The Chargers have only the right of first refusal based on the tender given to Alexander.

After signing on with the Chargers last October, Alexander was a pleasant surprise for the team as he gained 658 yards on 37 catches with seven touchdowns, in only seven games. As Rotoworld.com notes, this amounts to 66 catches for for 1,170 yards and 13 touchdowns if projected over a full season.

The other day I put a post up detailing how Restricted Free Agency works in the NFL, which can be found here. For those who just want a quick look at what each RFA tender gets for an NFL club, here’s a sample from the article:

1) If the prior club simply wants the right of first refusal to any offer sheet the RFA may sign with another club, the prior club must simply make the RFA a Qualifying Offer for one-year with a Paragraph 5 Salary (the player’s base salary) of $1.323 million.

2) If the prior club wants both the right of first refusal AND draft pick compensation in the round the RFA was originally drafted in, the prior club must make the RFA a Qualifying offer for one-year with a Paragraph 5 salary of $1.323 million OR 110% of the player’s prior year Paragraph 5 Salary, whichever is greater. Basically, if last year the player’s base salary was even a penny more than $623,00, then the prior club is forced to opt for the second option and pay the RFA 110% of his previous season’s base salary.

3) If the prior club wants both the right of first refusal AND draft pick compensation in the 2nd round of the upcoming draft, the prior club must make the RFA a Qualifying offer for one-year with a Paragraph 5 salary of $2.023 million OR 110% of the player’s prior year Paragraph 5 Salary, whichever is greater. For this option, the team will have to pay 110% of the RFA’s prior season base salary if that player’s previous season base salary was more than about $963,333.

4) Finally, If the prior club wants both the right of first refusal AND draft pick compensation in the 1st round of the upcoming draft, the prior club must make the RFA a Qualifying offer for one-year with a Paragraph 5 salary of $2.879 million OR 110% of the player’s prior year Paragraph 5 Salary, whichever is greater. For this option, the team will have to pay 110% of the RFA’s prior season base salary if that player’s previous season base salary was more than about $1,370,952.

As referenced, the Chargers tendered Alexander at the lowest possible level, meaning he has a one-year deal for $1.323 million. With a $540,000 base salary in 2012, his salary would have been $1.323 million at the original draft pick tender (except this doesn’t apply in his case because he wasn’t drafted, otherwise his tender obviously would be at this level), $2.023 million at the 2nd round tender and $2.879 million at the 1st round tender. 110% of Alexander’s 2012 base salary is only $594,000, so the greater amounts at each tender level are those preset by the NFL.

This was probably the right move for the Chargers. Alexander has an extensive injury history and it is extremely unlikely that any team would have been willing to fork over a 1st or 2nd round pick to sign him away at this point in his career, despite his stellar 2012 production. Signing Alexander at the lowest tender saves the Chargers $700,000 on the cap when compared to the second round tender and $1.556 million when compared to the first round tender. Plus, the team does have a right of first refusal to any offer sheet Alexander may sign with another team. However, if Alexander does sign an offer sheet that the Chargers decide not to match, they’ll be kicking themselves as that means there’s a chance they would have lost out on a 2nd round pick just to save $700,000 on their 2013 cap. With $11,716,511 in cap space right now, Chargers fans would surely like to join in kicking the San Diego front office if this potential star were to sign elsewhere. Of course, if Alexander did receive a draft pick tender, he probably wouldn’t receive an offer sheet from anyone (especially for a 1st rounder). It’s still a fun scenario to consider anyway.

@AndrewOTC

[adsenseyu1]