Wednesday, June 11, 2014
Inside Slant: Offseason financial health
By Kevin Seifert
With the exception of a few unsigned draft choices, the business of the 2014 NFL offseason is largely complete. Now, then, is a good time to assess where teams are heading into the season, how much flexibility they will have for fall additions/contract extensions and what -- if anything -- might be holding them back.
The big chart at the bottom of this post, courtesy of ESPN Stats & Information, is organized by current salary-cap space. The Jacksonville Jaguars have the most ($28.5 million) and the Detroit Lions -- who are trying to sign defensive tackle Ndamukong Suh to a cap-friendly extension -- have the least ($1.1 million).
The chart also carries two other relevant pieces of information: The amount of dead money each team has absorbed for 2014, and the amount of committed cash as of this week. Dead money is the total amount of cap space devoted to players no longer on the roster; committed cash is the amount of money each team will pay its players this season. The latter is important, in part, because the collective bargaining agreement (CBA) requires each team to spend 89 percent of its cap space in cash over a four-year period.
The other chart lists the 10 players whose terminated contracts are most impacting their former teams via dead money. In no particular order, let's run through some highlights and other observations of this material:
- Dallas Cowboys have an NFL-high $23.2 million in dead money in part because they released linebacker DeMarcus Ware ($8.6 million) to get under the 2014 salary cap and parted ways with defensive tackle Jay Ratliff ($6.9 million) because of injuries.
To varying levels of accuracy, dead money can be used to illustrate the efficiency of a team's roster-building plan. A high figure often means important decisions went wrong or that impatience and/or leadership change forced a course correction. The
- The Buffalo Bills, meanwhile, are still dealing with their decision to extend quarterback Ryan Fitzpatrick in 2011. His contract, terminated in 2013, counts $7 million against their 2014 cap. The decision to trade receiver Stevie Johnson funneled $10.2 million in dead money to this season. The Bills, of course, have shifted to a short-term, win-now mode during an ownership transition, making dead money less of an organizational priority.
- How expensive was the first round of the 2012 draft for the Cleveland Browns? Their two selections, running back Trent Richardson (traded) and quarterback Brandon Weeden (released), will combine for $10.9 million in dead money this year. Consider it an extreme example of leadership turnover; the Browns are on their third coach and third general manager since that draft.
- Contract mistakes happen to even the most stable and best-run organizations. Tight end Aaron Hernandez, released last summer after being arrested on murder charges, accounts for $7 million in dead money for the New England Patriots.
- On the other hand, former Tampa Bay Buccaneers general manager Mark Dominik left a mostly clean ledger for the team's new leadership duo of Jason Licht (general manager) and Lovie Smith (coach). The Bucs have an NFL-low $901,763 in dead money, largely due to Dominik's pay-as-you-go approach to significant deals. Cornerback Darrelle Revis, released in March about a year after signing a six-year, $96-million contract, does not count against the Bucs' 2014 cap at all.
- Many of you might wonder what the Jaguars will do with $28.5 million in cap space at this time of year, or how the Browns could use $25.9 million or the Bengals their $24.6 million. Some of that space could be used for summer or in-season contract extensions; the Bengals' discussions with quarterback Andy Dalton come to mind. If not, each team has the option of pushing all or part of their surplus into 2015, a decision that must be filed by the end of the season. It's technically referred to as "carryover."
- I would caution against making value judgments on the amount of committed cash. The expenditures of all teams should roughly even out over time, per the CBA, and an individual year's numbers can reflect one or two unique contract structures rather than a philosophy. The Chicago Bears, for instance, are set to pay the NFL's fourth-highest payroll ($150 million), but it's largely because front-loaded new contracts for quarterback Jay Cutler and receiver Brandon Marshall call for a combined $37.5 million in salary and bonuses this year. In 2015, their compensation lowers to $23.2 million combined.
- If anything, committed cash can reflect the cost of maintaining deep rosters. The Baltimore Ravens are set to pay out nearly $160 million in cash this year, most in the NFL. Why? Quarterback Joe Flacco's $22.5 million salary plays a part, of course, but so do the lucrative first years of deals signed by tight end Dennis Pitta ($12 million), left tackle Eugene Monroe ($12 million) and linebacker Terrell Suggs ($12 million). The Cowboys, conversely, have the NFL's lowest payroll at the moment ($106 million) after an offseason dominated mostly by subtraction.
- Why aren't the Jaguars paying a higher payroll after an active offseason? They followed a midrange focus, and none of their seven veteran free-agent signings will receive more than $7.5 million this season. The top three: Offensive lineman Zane Beadles ($7.5 million), defensive lineman Red Bryant ($5.25 million) and defensive end Chris Clemons ($5 million).
- Historically it's been difficult to find a connection between spending and winning, and that will be especially true as long as teams are required to hit the four-year spending floor. The quickest way to a high payroll is to have an elite/highly paid quarterback, as the Ravens, Atlanta Falcons, Bears, San Francisco 49ers and Denver Broncos can demonstrate. (They have five of the top 10 team payrolls.) But if you believe a team must spend to win this season, keep in mind that the New England Patriots have the sixth-lowest payroll, the Bengals currently have the third-lowest payroll and the Indianapolis Colts are at No. 22.