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Old 03-03-2014   #132
ChampionTexan
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Default Re: Texans' Cap space......and the rest of the League

If I'm reading the CBA correctly, there seems to be some confusion about the impact of players cut ahead of the date but designated as June 1 cuts.

If a player is designated as a June 1 cut, the contract (and salary cap impact) still stays in place through June 1, even though the player is able to immediately sign with another team. Therefore, any cap room generated by the move isn't available until June 2, or well after the prime free agent signing period. Cutting a player outright (no June 1 designation) puts all the dead money in the current salary cap year, but it also recognizes any money saved against the cap immediately, making it available to sign free agents as soon as the player is cut.

If anyone out there thinks I'm reading this wrong, here's the language from the CBA (Article 13, Section 6 (ii)(1), (Bolding added for emphasis). I'd welcome any guidance correcting my understanding.
Quote:
For any player removed from the Team’s roster, or whose Contract is assigned to another Club via waivers or trade, on or before June 1 in any League Year prior to the Final League Year, or at any time during the Final League Year, any unamortized signing bonus amounts will be included in Team Salary for such League Year, except that for each League Year preceding the Final League Year, each Club may desig-nate up to two Player Contracts that, if terminated on or prior to June 1 and if not renegotiated after the last regular season game of the prior League Year, shall be treated (except to the extent prescribed by Section 6(d)(iv) below) as if terminated on June 2, i.e., the Salary Cap charge for each such contract will remain in the Club’s Team Salary until June 2, at which time its Paragraph 5 Salary and any unearned LTBE incentives will no longer be counted and any unamortized signing bonus will be treated as set forth in Subsection (2) below.
Additionally, here's a snippet of an article from "Under the Cap.com" from last off-season that addresses this topic, and seems to confirm my interpretation. The example used is for Steve Breaston, who was released by the Chiefs in Feb. of 2013 and designated a June 1 cut (once again, bolding added for emphasis).

Quote:
I think where many people get confused, though, is when they hear that “player x” could be designated a June 1 cut and immediately jump to conclusions that it means a spending spree in March. The league allows each team to designate up to two players per year as a June 1 cut for cap purposes prior to June 1. It’s the one concession that was given to the players as it allows a player to be cut in March and have time to explore free agency but have his cap hit spread out over two seasons, thus creating more cap space in the current year. The issue though is the mechanism by which this works.

When you designate someone as a June 1 cut the player and his current contract remain on the books until June 1.
LINK

So in essence, if the Texans cut Schaub today and make it an outright cut, they've generated $3.625 Million (Current cap hit of $14.125M less dead money of $10.5 M), whereas if they cut him and designate him a June 1 cut, they generate no cap space until June 2, at which time they would get $10,625M in space, but also see the difference of $7M count against their 2015 cap.

So the final question is - if there's no cap benefit to a June 1 designation, why do it? Well, it gives the player a head start on signing with another team, but I can't really think of an example of the team benefitting, so if anybody else can, pass it on.
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