Thursday, March 14, 2013
How to squeeze contracts into a tight cap
By Kevin Seifert
So how does a team purported to be tight against the salary cap sign four significant players to market-level contracts during the two days of free agency? I don't have all the numbers yet to document how the Detroit Lions pulled it off, but I have enough to give you a pretty good illustration.
Using simple salary cap rules, the Lions used only $6.13 million in cap space to sign cornerback Chris Houston, running back Reggie Bush and defensive lineman Jason Jones. (I don't have a contract breakdown yet on safety Glover Quin.) Let's look at how the Lions structured each of the first three contracts and how much, if at all, those players' cap numbers will rise in the next few years:
- Houston: He received a five-year, $25 million contract that included a $6.5 million signing bonus and a $1 million base salary for 2013. So Houston will be paid a total of $7.5 million in 2013 but will count $2.3 million against the salary cap. (His $1 million base plus the pro-rated portion of his signing bonus, $1.3 million). With higher base salaries in future years, his cap number will rise to $4.8 million in 2014, followed by $5.8 million in 2015 and 2016, and $6.3 million in 2017.
- Bush: He received a four-year, $16 million that included a $4 million signing bonus and a $1 million base salary in 2013. So Bush will be paid $5 million in cash in 2013 but will count $2 million against the cap. (A $1 million base salary plus a $1 million in pro-ration.) With higher base salaries in future years, his cap number will rise to $4.5 million in 2014 and 2015, and $5 million in 2016.
- Jones: He received a three-year, $9.5 million contract that included a $2.5 million signing bonus and a $1 million base salary in 2013. So Jones will be paid a total of $3.5 million in 2013 but will count $1.83 million against the salary cap. (A $1 million base salary plus $833,333 in proration.) With higher base salaries in future years, his cap number will rise to $3.7 million in 2014 and 3.9 in 2015.
Those are the details of how three players whose deals will pay out $50.5 million over the next five years will count $6.13 million against the 2013 cap. As everyone knows, it's relatively easy to push down first-year cap figures. It's harder to manage those numbers over time, which is why teams with the best salary cap situations absorb as much of the total cap hit in the first year.
In the case of Houston, Bush and Jones, their combined cap hits rise to $13 million in 2014 and $14.2 million in 2015 -- which is why the NFL is almost always a year-to-year proposition.