With so much Antonio Brown news today and so many questions about how things work on the salary cap I decided to throw together a quick post on the topic that will hopefully answer the questions I have been getting. So lets take a look.
What is the dead money and cap savings is Brown is cut?
If Antonio Brown is cut the Steelers will need to account for at least $21.12 million on the salary cap. This dead money is from a $19 million signing bonus that was paid to Brown in 2017 and $12.96 million salary conversion paid to Brown in 2018 to help the Steelers with their salary cap this season. The $19 million was prorated over five years and the $12.96 million over 4 years. Both have three years of proration remaining and the Steelers need to account for all of that remaining money whether or not he is on the team next year.
If Brown is released the team will save $1.045 million in cap room. At least $495,000 of that would be offset by whomever takes his place on the roster so the effective cap savings are nil.
Wait I read that they will save $15.2 million if they cut him and millions more in the future? What gives?
The $15.2 million is the amount of cash that the team saves this year if they release Brown in March. From a salary cap perspective this is money that is saved for the future though it is not realized this year. The best way to visualize this is to do a quick scenario analysis based on when the Steelers move on.
|Year||Cap if Cut in 2019||Cap if Cut in 2020||Cap if cut in 2021|
As you can see they save $15.125 million by cutting him now versus 2020 and $26.425 million by cutting him now versus 2021.
This type of analysis makes plenty of sense when you are talking about an underperforming/declining player. If you have an 80% chance of cutting a player in 2020 you may as well just bite the bullet and do it now even if it looks bad on the cap. This is why decisions are made on players like Ndamukong Suh in Miami to cut now rather than later. It’s a strong argument for why the Giants should have moved on from Eli Manning this year.
Brown isn’t that type of player though. The odds of Brown being cut for football reasons in 2020 are very low so there is no need to accelerate the process nor any try benefit to it because he is worth the contract that he is being paid. If you are cutting Brown it’s because you think there is some irreparable damage between the organization and him that you can not fix. You aren’t going to give it a shot in 2019 only to cut him in 2020. Either the Steelers are in or out. This type of matrix should play no role in this particular decision.
Is the salary cap a concern at all for this move?
Yes and no. In general the salary cap is no longer a barrier for moves like this. Salaries have not kept up with the rising salary cap and teams have learned to work the system better to absorb cap hits like this one. The only true protection players have anymore are fully guaranteed salaries and teams pretty much only peg those to years of expected contributions.
That said it is still a ridiculous number. The highest one year cap charge we have is a $19.3 million cap charge for Peyton Manning in 2012 which was offset in part by the fact that the team declined an option on him. After Manning we are looking at Brock Osweiler at $16 million in 2017 and Jason Pierre-Paul in 2018 at $15 million. Ndamukong Suh had over $22 million in dead charges but they were split across two years and not a single season.
To put things in perspective the Steelers have had a total of about $31 million in dead money combined across three seasons! This would be completely against their way of doing business to take on that kind of charge no matter how upset the player is. So the big number should give the Steelers a lot to consider for this season.
What about a post June 1 cut? Does that make it cheaper?
A June 1 cut allows you to manipulate the accounting for dead money on a contract. In this scenario what happens is the Steelers would release Brown on the first day of free agency with the June 1 designation. From the start of free agency to June 1, Brown would still count on the Steelers salary cap at $22.165 million- his full cap charge. On June 2nd Brown would be removed from the books as an “active” player and only have his prorated charge count against the cap, which is $7.04 million. That would lead to a cap savings of $15.125 million in 2019.
But don’t get too excited. The other $14.08 million would simply move to 2020. So all the June 1 does is delay the inevitable.
Typically a June 1 is used when a team can not deal with the salary cap charge of releasing the player because of other cap related issues. Using the June 1 in cases like this allows the team to pretty much spend right up the cap in March when free agency is in full swing knowing that they have a big cushion coming their way in June which can be used for rookies and as a safety net in the regular season. The Dolphins were a team that kind of used this strategy this year.
Given that the Steelers are not really a big free agent spender and their cap, while not great, isn’t problematic, Im not sure they would benefit from this unless just from a psychological standpoint so they don’t see the big $20M number in one year. Its also worth noting that in 2020 there could be some different rules regarding dead money and some teams may not want to push too much money into 2020 from 2019.
What about a trade? How much cap relief is there is a trade?
A trade and a cut are treated identical on the cap unless the player has guaranteed salaries remaining in his contract. Brown has none. So cut or traded the cost is $21.12 million on the cap.
Can we designate him a June 1 trade?
Nope. The June 1 designation only is allowed on players who are released. You can still get the benefit of post June 1 accounting on a trade but that means you have to make the trade on June 2 or later. That is problematic for a few reasons.
The main issue here is that Brown has a roster bonus due if he is on the roster on the 5th day of the league year. That payment is then the Steelers responsibility and counts on the Steelers cap regardless of whether or not he is traded. So the dead money moves to $23.62 million in total, and the number for this year up to $9.52 million. That moves the savings down to $12.625 million rather than $15.125 million.
The sides can avoid this by renegotiating his contract to delay the bonus until later in the year (say training camp) but would require it to be guaranteed and likely with language that doesn’t void the guarantee if he doesn’t show up to workouts, mandatory OTAs, etc…Since the relationship is that bad I couldn’t see either side doing that. Plus there is no guarantee a trade occurs and neither side would want this drama dragging on into the summer.
There is also zero benefit for Brown to delay his release into the summer. If released from his contract he will have the best opportunities to earn a big contract in March not July. So he should not work with Pittsburgh on anything that prevents him from hitting free agency in those first days of the league year.
Well what about the team acquiring him can’t they do something to make the dead money less?
No. The dead money is a sunk cost. There is nothing Brown can do to make a trade more appealing for the Steelers nor anything a team could do to trade cap space for Brown to make the dead money less difficult for the Steelers. It’s against the rules.
The only way to offset some of the salary would be to make a star for a star kind of trade with a team that had excessive cap room to eat other costs. Lets say the Giants created a bunch of cap room releasing some veterans and were willing to do a Beckham for Brown swap (and this is pure fantasy, nothing more or less). The Giants could in theory prepay $10M of Beckham’s salary as a bonus before the trade. In this case rather than taking on $17M in Beckham salary plus the $20+M in dead money for Brown they only take back $7M in salary for Beckham. It’s a $10M swap. You could do something similar by signing a free agent the Steelers want and then trading him to the Steelers after you pay him the signing bonus and in return get Brown.
Would a team want to trade for him? What is their cap cost?
If a team traded for Brown they would get him at cap costs of $15.125 million in 2019, $11.3 million in 2020, and $12.5 million in 2021. None of that is guaranteed either. So the team would get one of the top wide receivers in the NFL at a cost of $12.975 million a year with no guarantees. Of course they would want to trade for him. That’s a steal. I mean Allen Robinson as a free agent got $14 million a year with $25 million in injury protection. Sure Robinson is younger but there is no comparison.
Why would Brown want to be traded?
He shouldn’t want to be traded. If he wants off the team he should do everything in his power to be released from his contract. There is far more money in free agency for him than the risk free $13 million a year a team would acquire him for in a trade. While he can’t block a trade he can do enough to make teams wary of trading for him unless they give him a raise.
Should the Steelers move on without him?
Probably not. From a financial perspective it makes no sense. Though he probably won’t be happy as he loses more targets to JuJu Smith-Schuster the team is better off with both on the field than off it. The team is built to compete now and you maximize that with the most talent you can get on the field. Brown may be an issue at times but there is no reason the team can not work through this and get everyone on the same page professionally. Its just hard to really come up with a scenario where the Steelers make out better without him than with him.
Jason is the founder of OTC and has been studying NFL contracts and the salary cap for over 15 years. Jason has co-authored two books about the NFL, Crunching Numbers and the Drafting Stage, which are widely circulated in the industry and hosts the OTC Podcast. Jason’s work has been featured in various publications including the Sporting News, Sports Illustrated, NFL Network and more. OTC is widely considered the leading authority on contract matters in the NFL.