Wednesday, July 17, 2013
Mailbag: Veteran minimum salary benefit
By Kevin Seifert
Every now and then, I try to answer a salary cap question to help demystify a process that isn't as complicated as it might seem. This week, Greg of Calgary noted this chart of the Chicago Bears' pending free agents and asked how a cap number can actually be lower than the cash compensation for a player in a one-year contract.
The chart identified that situation for linebacker D.J. Williams and cornerback Kelvin Hayden. Williams' cap number is $1.33 million even though he can earn up to $1.75 million in cash this season, while Hayden's cap number is $620,000 even though he will be paid $905,000 this season.
Both players are classified under an NFL rule known as the "veteran minimum salary benefit" that was written into the most recent collective bargaining agreement (CBA) as a way to help make veterans more affordable to teams. It uses a formula to reduce the cap hit of a player's base salary so long as the signing bonus remains under a certain level.
Hayden, for example, will be paid a base salary of $840,000 this season, the minimum he could be paid based on his experience level. But the cap hit for that base salary, under the rule, is $555,000. Add on a $65,000 signing bonus, and you have Hayden's total cap hit of $620,000.
There is no doubt that NFL veterans have had a difficult time finding lucrative work this offseason. But the veteran minimum salary benefit wasn't designed to help them get market-level deals. It intended as a way to support the higher base salaries the CBA called for, and in this case, the Bears saved more than $700,000 in cap space for Williams and Hayden alone.