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Salary Cap … Explained!

Texian

Texian

Hall of Fame
A Great piece explaining how the Salary Cap works...the good, the Bad and the Ugly. A must read for every NFL fan:

http://mmqb.si.com/2014/02/26/nfl-salary-cap-explained/

"In the year-round coverage of the NFL, there is no topic more misunderstood than the salary cap. Cap room, cap numbers and cap consequences often aren’t what they appear to be, and at times alleged “smart” cap management is merely salvaging the present to complicate the future."
 
Good article. Thanks.

Cap is increasing quite a bit. Means we can do way more in FA than previously thought possible.
 
NFL salary cap: Detroit Lions have more money tied to top-three players than any other team
...A Free Press analysis of the salary-cap situations of all 32 NFL teams shows the Lions have the most cap dollars invested in their top-three players this fall, and that none of the teams in the top 10 are coming off playoff appearances.

Three of the five teams with the least money committed to their top-three players, meanwhile, reached the postseason last year, and the Super Bowl champion Seattle Seahawks rank 16th at $34.3 million.

The Seahawks, like the Indianapolis Colts, San Francisco 49ers and other successful teams near the bottom of the list, have the benefit of starting a relatively inexpensive quarterback who was drafted under the most recent collective bargaining agreement.

Still, Schwartz’s point remains: In an NFL where depth is key and inexpensive, young talent is at a premium, what’s the best way to build a roster?
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Playoffs said:
The Seahawks, like the Indianapolis Colts, San Francisco 49ers and other successful teams near the bottom of the list, have the benefit of starting a relatively inexpensive quarterback who was drafted under the most recent collective bargaining agreement.
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How do the Colts get to be among the "successful" teams? If that were us, second year in the play offs, first time they were 1 & done, second time they advance to the divisional round...... we would be failures. We were failures.
 
Worthwhile read. I disagree on his assertion the NFL does not have a hard salary cap. There are accounting rules for when things get accounted but the total dollars don't change and every dollar has to appear on the cap at some point. The NFL does not have a system for a team to exceed the cap by paying a luxury tax for example.
 
I was disappointed in this article. I was hoping for a little explanatory (word?) information from Mr. Brandt. If you really need to understand the cap, read the CBA.
 
Highest Projected Cap Hits in 2015, per ESPN...

Code: 
[B]Tony Romo        $27.8M
Drew Brees       $26.4M
Larry Fitzgerald $23.6M
Peyton Manning   $21.5[/B]M
 
Two of those high cap numbers are due to restructuring. Romo and Fitz. Romo will continually get restructured. Can't wait to see how high his number gets in two or three years.
 
Can someone explain to me how June 1st cuts work?

Please tell me if I left something out or did something here wrong:

So I see that Miles Austin is released today... March 12, but he is designated as a June 1st cut.

If they cut him today they would have had to incur a 7.8 MM dead money hit against the cap. His salary this year was 8.2 MM therefore this cut would make zero sense (400K in savings for someone of his caliber when healthy) if it wasn't designated a June 1st cut.

But since he is designated as a June 1st cut, they can (after June 1st) roll all that money into a "bonus type structure" and spread it over the length of his remaining contract (4 years). Therefore 7.8 MM / 4 = 1.95 MM against the cap each year over the next 4 years?

Can anyone be designated w/ a June 1st cut? Would you have to assume they still have years left on their deal and this not be the last one?

Is Miles Austin technically still a Cowboy until June 1st or is he free to sign with other teams until that day happens?

Thanks for any and all help provided with better understanding this.
 
TexansFTW said:
Can someone explain to me how June 1st cuts work?

Please tell me if I left something out or did something here wrong:

So I see that Miles Austin is released today... March 12, but he is designated as a June 1st cut.

If they cut him today they would have had to incur a 7.8 MM dead money hit against the cap. His salary this year was 8.2 MM therefore this cut would make zero sense (400K in savings for someone of his caliber when healthy) if it wasn't designated a June 1st cut.

But since he is designated as a June 1st cut, they can (after June 1st) roll all that money into a "bonus type structure" and spread it over the length of his remaining contract (4 years). Therefore 7.8 MM / 4 = 1.95 MM against the cap each year over the next 4 years?

Can anyone be designated w/ a June 1st cut? Would you have to assume they still have years left on their deal and this not be the last one?

Is Miles Austin technically still a Cowboy until June 1st or is he free to sign with other teams until that day happens?

Thanks for any and all help provided with better understanding this.
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From my understanding, the June 1st cut spreads the dead money out between the current year and then accelerates the remaining amount due on next year's cap. So whatever is remaining in dead money on the rest of the contract going into next year is due next year. Also, two players per year can be designated a June 1st cut prior to June 1st.

It would still make sense to cut Austin, not as a June first cut, because his salary was going to be extremely high for the last 3 years of that contract.
 
TexansFTW said:
Can someone explain to me how June 1st cuts work?

But since he is designated as a June 1st cut, they can (after June 1st) roll all that money into a "bonus type structure" and spread it over the length of his remaining contract (4 years). Therefore 7.8 MM / 4 = 1.95 MM against the cap each year over the next 4 years?
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By designating Austin as a June 1st cut they are allowed to release him at any time, for cap purposes though, they are allowed to account for him as if he were still on the team... without paying his salary of course, so they are only responsible for the prorated portion of his contract.

I don't know the details of Austin's contract, but we accounted for Schaub's contract at $3.5M/yr..... his salary for 2014 will be $10M, then he was due a roster bonus, all together they add up to a $14.5M cap hit.

If we were to cut him today & take the full hit of his remaining bonus, $3.5M x 3 (2014, 2015, & 2016) that would be $10.5M of dead money on our cap. But we don't have to pay, or account for his salary ($10M) or roster bonus ~$1M.

As a June 1st cut, we have to account for the pro-rated portion of his signing bonus, $3.5M this year, the rest of his signing bonus next year. We don't have to pay his salary $10M or roster bonus ~$1M, ever (because it was never paid).



TexansFTW said:
Can anyone be designated w/ a June 1st cut? Would you have to assume they still have years left on their deal and this not be the last one?
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It does no good if there isn't any dollars beyond the current season, left to be accounted for. That's all you're doing.

Once you cut a player, you have to account for the remainder of any signing bonus left unaccounted into the current year's cap. As a June 1st cut, you're pretty much pretending you're not cutting him until the following year & accounting for those dollars then.

TexansFTW said:
Is Miles Austin technically still a Cowboy until June 1st or is he free to sign with other teams until that day happens?
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No. Miles Austin is not a Cowboy. They released him, he is free to do whatever he wants. The Cowboys on the other hand can't use that money until June 1st.
 
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