With June 1 rapidly approaching I thought this would be a good time to update on the salary cap changes that will occur for a number of teams as well as some other thoughts on the subject. On June 1 the league changes their accounting rules for acceleration of prorated bonus money. If a player is cut prior to June 1 all of a players unaccounted for bonus money accelerates onto the salary cap. If a player is cut after June 1 the players unaccounted for money accelerates to the following season (in this case 2014) with only his current proration remaining on the 2013 cap books.
The NFL allows teams to cut up to two players prior to June 1 and designate them “June 1 cuts”. If this mechanism is used the team carries the players’ full cap charge in their top 51 until June 1. On June 2 the player is officially removed from the roster with only his current years proration remaining on the books and in many cases a dramatic increase in cap space for cap starved teams that need to sign rookies or have money on hand for in season roster management. 10 teams utilized the June 1 designation, with the Dolphins being the only team to use it on two players.
For many of the teams the money is desperately needed. The Oakland Raiders have yet to sign a draft pick as they remain right around the NFL’s cap limit, but on June 2 their cap will grow to about $7.86 million after Michael Huff drops off the books. The Steelers with almost no breathing room and less than $600,000 in cap room with 4 picks to sign will now have $5.59 million to spend, due to the June 1 treatment of Willie Colon. The Chargers, the other cap strapped team with less than $1 million in room, will remove Jared Gaither to jump to $4.65 million in cap space. The other teams with limited cap funds that will benefit from the June 1 rule are the Falcons and Ravens, both of whom currently have around $2 million in cap space.
Other teams such as the Bills and Dolphins will see large increases that will jump them very close to the top of the NFL in cap space. The Dolphins will jump from 15th to 7th in the NFL in cap space while the Bills will go from 7th to 5th. This is primarily because of the large cap investments that the teams’ made in mediocre players. Ryan Fitzpatrick current sits as the 2nd largest cap charge on the Bills active roster while Karlos Dansby has the highest cap figure of any Dolphin. Huff of the Raiders also ranks as the highest cap charge on his team.
Most of the players are all good enough to find another job in the NFL, only Gaither has not found a team willing to take him, but only 5 received multi-year contracts and the highest cap charge to be found is Tyson Clabo, now of the Dolphins, at $3.5 million. The June 1 rule really illustrates the mistakes that teams make when valuing players and structuring contracts. While Dansby, Huff, and Fitzpatrick were outrageous figures, 6 of the June 1 cuts still take up a top 5 cap spot on the active roster and 9 are in the top 10. The following table shows the amount of estimated cap space that was to be spent on these players, dead money the teams will carry, and how much cap new teams are going to pay these players this season:
|Original Cap Charge|
|2013 Dead Money|
|2014 Dead Money|
|New Team 2013 Cap|
So the cutting teams will carry more dead money this year than the players will collectively make from their new teams to play in the NFL. The league valued these players at 74.3% less than the teams original projections. Assuming that the average salary for the group in 2014 is $1 million each then those players will play football over a 2 year period for 50% less than the dead money totals that the original teams will now carry in 2013 and 2014. That’s one of the reasons why when we do some of the valuations on the site from a team perspective we try to take into account future productivity as this was, for the most part, money thrown away on players. These are the type of contracts that get General Managers fired over the long run.
As for the June 1 cuts themselves here is the list of players that will be removed on June 2 and what the projected cap totals for the teams will be based on the official salary cap numbers as of May 28, 2013.
New Team Cap Space