What Happens When Calvin Johnson Retires

According to an ESPN report by Adam Schefter, Calvin Johnson has informed the Detroit Lions that he plans to retire rather than return for the 2016 season.  The Lions were likely going to have to make a difficult decision anyway on Johnson this year due to a $24 million cap charge but he may have made it easier on them by walking away. So what happens next to the Lions salary cap? I’ll explain the ins and outs of how a retirement works after the jump plus look at a conspriacy theory as to a unique way to use a retirement to leverage a better contract.

In general a retirement works similarly to a cut.  Once a player is placed on the reserve/retired list the NFL treats him as if he was released. For the Lions this means they will absorb either a $12.916 million salary cap charge in 2016 if the retirement is processed before June 1 or a $8.058M charge in 2016 and $4.858M charge in 2017 if processed after June 1. Given his $24 million cap number it would be logical to process it before June 1.

Once retired Johnson is not free to shop his services around the NFL should he decide to return at a later date. As long as he remains on the Lions retired list he will remain the property of the Lions if he decides to return.  Once he officially retires the Lions will also have an option to go after signing bonus money that had been paid to Johnson during the course of his contract.  Johnson received a $16M signing bonus wgen signing this contract and a $4.285M signing bonus later in the contract. It’s possible that the latter bonus may have had protection from recovery in the event of a retirement. These bonuses allow the Lions to recover $3.2M(Edit thanks to Matt for catching me flipping the option and signing proration) from the initial signing bonus and $857,000 in 2016 and 2017 from the smaller bonus if allowed. Johnson’s $20 million option bonus is not subject to forfeiture.

One would imagine given the team’s history dating back to Barry Sanders that the Lions would look to recover the money. If they did they will receive salary cap credits reflecting the refund in the 2017 and 2018 league years. In that sense the retirement gives the Lions much more financial flexibility.

However there should also be a concern for Detroit should Johnson demand to return to the club this year. It’s rare to see a player not only walk away from a $16 million salary let alone possibly having to pay $4.9million to do it. Sometimes retirements or threats of retirements can be used to help in contract decisions. Years ago we saw this with Brett Favre who retired (twice) only to unretire and then find his way to a different team. The Packers traded Favre in 2008 to the Jets following his return and the Jets released him after drafting a QB the following year and spending a good deal of money in free agency realizing a similar move would throw the team into chaos.

If Johnson were to return this summer the Lions would not only have his $12.9 million dead charge on the books but would then reinstate his $16M salary bringing his total cap number to nearly $29 million. Considering the Lions would have prepared all offseason for life without Johnson, this would put them in a position where they would be unable to keep him on the roster and comply with the cap. Johnson would gain a tremendous amount of leverage and they would have no choice but to release him or sign him to a new deal with very favorable terms. So if Johnson was really looking for a clean break from the Lions without having to ask for a trade this would be the way to do it. That would be a pretty impressive move by the player if it ever happened.