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Blogs

A salary cap primer

Posted by Darren Urban on February 6, 2014 – 11:33 am

With all the discussion the last couple of days about Larry Fitzgerald and his contract and the salary cap, it seemed prudent to hit on some points about the cap, how it works, and what some of the terms mean that are constantly being thrown around.

– The salary cap, in simplest terms, is the limit, in dollars, the sum total of the players on each team can cost each season. The projected cap for each team (it is finalized right around the time free agency begins) in 2014 is reportedly about $126 million. Teams, through certain cap strategies, can carry over some unused cap space from the year before, however, so that number might be slightly larger for some teams.

– In the offseason, a team’s cap number is determined by the top 51 cap numbers on the roster. Once the regular season begins, every player’s cap number — the 53 on the roster, the eight on the practice squad and anyone on injured reserve — counts against the cap.

– A player’s salary is counted against the cap each season, as is a pro-rated part of a bonus. Say a player signs a three-year contract for $2 million salary each year, and gets a signing bonus of $3 million. He gets $5 million in real money the first year — salary plus the bonus check — but his cap number that first year is $3 million ($2M plus $1M in pro-rated bonus.)

UPDATE: A bonus can be pro-rated over the first five years of a contract. Which is why, prior to this latest restructure, Fitzgerald had no pro-rated bonus money on his contract past the 2015 season. Because he signed an eight-year deal in 2011, the pro-rated part only worked through the first five seasons.

– Cap numbers can be lowered, like it was in the case of Fitzgerald. His cap number was set to be more than $18 million, which included $12.75M in 2014 salary and about $6M in various pro-rated bonuses. The Cards made $11.75M of that scheduled $12.75M salary into a bonus for March. Fitzgerald benefits because instead of taking that $12.75M 1/17th at a time in his weekly in-season paychecks starting in September (which is how players get their salaries, only in-season), he gets $11.75M of it in one big check in March. The Cardinals benefit because now, with his salary shrunk to $1M and the $11.75M pro-rated over the remaining five years of his existing contract is spread out. It shaves $9.4M off Fitz’s cap number now, but adds another $2.35M to his cap numbers for each of the final four years of the contract (because all five years absorb $2.35M of that $11.75M).

– When talking about a player adjusting his contract, there are basically four directions it can go: A player can get a brand-new deal, where he is never a free agent but the team rips up his existing contract for a better one. A player can get an extension, which usually keeps the deal in place for the current year but tacks on more years and adds, usually, a signing bonus. A player can restructure, which is what Fitzgerald did. The money stays the same, and essentially, paperwork is used to adjust what the money is called (and when it’s paid out) so it lowers/increases the cap number. And then there is a pay cut, which is exactly how it sounds. From time to time, players are willing to accept pay cuts — reductions in salary — that will obviously lower a cap number without future cap hits.

– Dead money is the cap hit left by a player once he is no longer on the roster. It’s something every team ideally wants to avoid, although it’s all but impossible to have zero dead money. Even an undrafted rookie with a tiny signing bonus leaves some dead money if cut.

– Dead money is accounted basically by all the leftover pro-rated money that hasn’t already been used. With Fitzgerald, for example, if he were cut (or traded) after this season, his dead money would start at $9.4M of cap space, or the remaining four years of pro-rated bonus money for his restructuring earlier this week. That doesn’t include his other pro-rated bonus money he already has (which would take his dead money to more than $14M next season.)

– The dead money is almost always hits the cap the first season and then is over with. The exception is if a player is a post-June 1 cut — or is designated a post-June 1 cut — in which case the team takes a hit of one season’s worth in Year One and the rest the subsequent season. For example, Adam Snyder was cut last season with $4M in dead money and four years left on his contract. Cards made him a June 1 cut, meaning they only had to take a $1M hit in 2013 (pro-rated of what was left.) This year, however, the Cards most absorb the remaining $3M in dead money from Snyder.

– Those are the basics. For a much more in-depth salary cap FAQ, this page is pretty good.


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Posted in Blog | 23 Comments »


23 Responses to “A salary cap primer”

  1. By D on Feb 6, 2014 | Reply

    Good job Darren..

    I think the Cards still owe Levi Brown 6 mil on this upcoming year…I also think June 1st D. Colledge will be cut because it would save 2.7 mil on this years cap…(his cap number is very high for 2014)
    and with Watford eager to play I think that move will get done. (which probably will make them resign Winston for his Vet experience)

    Next year with the cap increasing more and with AZ clearing alot of dead money they will be in good shape to pay PP and probably D. Wiliams..

  2. By ored on Feb 6, 2014 | Reply

    graves legacy-levi,colledge,snyder,and fitzs’ contract and more i can’t even remember right now…oh and his own salary,whatever bloated figure tihat was.i think the average man on the street would negotiate those better or just walk away.

  3. By Andy Kw on Feb 6, 2014 | Reply

    Players we should let go in FA:
    -RB Alfonso Smith, RB Rashard Mendenhall, OT Eric Winston, TE Jake Ballard, TE Jeff King, TE Kory Sperry, C Mike Gibson, DE Ronald Talley, LB Matt Shaughnessy, CB Javier Arenas, CB Yeremiah Bell, CB Antoine Cason.

    Players we should consider cutting or trading:
    -RB Ryan Williams, LB Lorenzo Alexander, S Curtis Taylor.

    Players we need to resign:
    -CB Patrick Peterson, DT Dan Williams

    This team needs to make room for players from the draft and free agents that they plan to sign:
    Draft 2014:
    1.) CB Justin Gilbert (Oklahoma State)
    -I expect him to play along side Patrick Peterson with CB Jerraud Powers moving to the Nickel package.
    2.) SS Deone Bucannon (Washington State), 6’1” 216Ibs
    -We are dying for a future starting Strong Safety and he is one of the best on the board. We can strengthen our young secondary and make it one of our biggest strengths.
    3.) DT Kelcy Quarles (South Carolina) 6’3” 298Ibs
    -This team needs a replacement for Darnell Dockett. He will sit behind Darnell Dockett this year and will develop. That way by the end of next season, we could move on with Dockett since his pay is a little too much.
    4.) OT Seantrel Henderson (Mia (Fla.)) 6’7” 331Ibs
    -He is an underrated Offensive Tackle that has huge potential. His athleticism might not be amazing but his ability to protect the QB is key. He would be a great guy to give some competition to OT Bradley Sowell.
    5.) TE Jacob Pedersen (Wisconsin) 6’3” 242Ibs
    -You know how HC Bruce Arians loves his Tight Ends. This guy is athletic, has a nice frame and can easily be a steal in the later round. This guy would be a nice complement next to TE Rob Housler.
    6.) QB Logan Thomas (Virginia Tech.) 6’6” 250Ibs
    -This QB is a project. He could be a future starter for this team or could be a big failure. He has a big frame and has a cannon of an arm. He accuracy needs to improve but his athleticism is decent. He has the tools needed to succeed but he is still raw. He needs two years to develop under Bruce Arians’ scheme. QB Carson Palmer would be a nice mentor for the young guy.

    If our team ends up resigning Karlos Dansby and gives Patrick Peterson a new deal, this team might not have a lot of cap room left to sign many players but if we restructure the contracts with D.Colledge, D. Dockett, D. Washington, & C. Palmer, we will have more cap to sign new players:
    Players we should resign (of course Dansby):
    -LB Marcus Benard
    -TE Jim Dray
    -DE Frostee Rucker
    -CB Bryan McCann
    -WR Andre Roberts

    Other Free Agents cant be considered since our Cap Space is still Questionable

  4. By erik on Feb 6, 2014 | Reply

    Not defending Graves necessarily, but you look at guys like Levi Brown and Matt Lienart and realize that that was back when 1st round rookies were getting ridiculous contracts. I know they resigned Levi when his deal was up, but I don’t think it was for more than his rookie contract. Obviously, it doesn’t help those two turned out to be not so great picks, to say the least, but it has to be difficult managing the cap when unproven players demanded that high of a salary.

    Along that same line of thinking, with the way the rookie contracts are structured now, you may be able to pay a guy like Larry a little more over a couple years assuming we draft a QB to replace Palmer when the time comes. It could work because you would be paying the QB hardly anything for a few years, just like we see with the Seahawks and 49ers.

    After two paragraphs, I’m still trying to figure out my own point! I guess what I’m getting at is, this all seems difficult to the average fan. I don’t want to blame the previous regime, because they were working within different parameters. This current regime, however, has it together and I don’t doubt for a minute they will continue to improve as we go forward.

    Sorry to whoever read that, LOL. Go Cards!!!

  5. By andystandsup on Feb 6, 2014 | Reply

    Very informative as usual, Darren.
    Any word/timeline on how the new CBS Thursday night games contract might affect future cap increases?
    The LTBE incentives are always announced after the season, of course. Any way/site that you know of that “leaks” that possible contractual info?

  6. By Buck on Feb 6, 2014 | Reply

    Darren
    Thank you for a very clear explaination of cap and the money it ties up. Hopefully this will lessen some of the wild posts on this subject.

  7. By Cactus jeff on Feb 6, 2014 | Reply

    FA is simple, long safety, resign Winston and Dansby, and get a cheap quick WR. Draft BPA throughout.

  8. By Darren Urban on Feb 6, 2014 | Reply

    Andy -

    RE: Thursday night

    If it does impact it it wouldn’t be until 2015.

  9. By Rich on Feb 7, 2014 | Reply

    Darren,

    Fans seem to rip on Colledge, but he seems to have been solid and reliable and flexible. With Cooper and Fanaika and Watford, I expect the Cards would only like to keep Colledge if he took a paycut. Make sense?

    Also, seems to me that we should see Watford taking some snaps at center this pre-season. Just as an added value. Any thoughts?

  10. By red bird of death! on Feb 7, 2014 | Reply

    I can’t wait for the draft.

  11. By Darren Urban on Feb 7, 2014 | Reply

    Rich —

    RE: Colledge/Watford

    My guesstimate right now is that Watford will be the starter in 2014. And I’d think Colledge would have to take a pretty drastic paycut. He might be in the same situation as Adam Snyder last offseason.

  12. By Coach K on Feb 7, 2014 | Reply

    COACH K’S LATEST CARDINALS MOCK DRAFT

    Rd.1. Morgan Moses, T, Virginia
    Rd.2. Kyle Van Noy, OLB, BYU
    Rd.3. Martavious Bryant, WR, Clemson
    Rd.4. Ross Cockrell, CB, Duke
    Rd.5. George Uko, DT, USC
    Rd.6. Isaiah Lewis, S, Mich. St.

    All should be on the board at picks #20 thru 180.

  13. By joe.holst on Feb 7, 2014 | Reply

    love this! Thank you

  14. By ored on Feb 7, 2014 | Reply

    colledge is’nt such a bad player,just a bad contract,of which we have/had too many.

    as far as graves is concerned,he overpaid way too often and also had a former player and scout in keim beside him that was adamant in drafting AP instead of levi,even then levi was a good run blocker who could’ve been a guard and was even an alternate for probowl RT tackle,he made too many wrong moves.and it was’nt only him,an oline coach that just wanted to recreate the old redskins line that no longer worked.the bottom line is that it’s the gms’ job to put the right people in the right place and he did’nt.

  15. By Andy Kw on Feb 7, 2014 | Reply

    Lets change up our secondary and add CB Charles Tillman!!!!!!!!!!!!!!!!!!!!

  16. By jasonc on Feb 7, 2014 | Reply

    Rich-

    I haven’t seen people rip on Colledge, I’ve called him overpriced and with the 9th highest cap number among offensive guards @7.25 million this year I think you’d agree his production doesn’t match his salary. If Darren’s guesstimate is correct and Watford is starting next season then I can’t imagine a scenario where he isn’t released.

  17. By Chuck 1 on Feb 8, 2014 | Reply

    Darren,

    I think that you’ll be reluctant to answer this question for several reasons, but mostly because it deals with a matter that’s so far in the future and so many things can happen between now and then..

    However, given that caveat, what do you think will be done with Fitz and his cap/dead money situation after the 2014 season?

    Also, thanks for the primer (and all the info that you pass to us).

  18. By Darren Urban on Feb 8, 2014 | Reply

    Chuck 1 –

    RE: Fitz/2015

    I have no idea what will be done. I think it’s going to be a very uncomfortable situation for both sides. I think I find it hard to believe Fitz would be willing to take a pay cut. I think I find it hard to believe the Cards can have a 32-year-old receiver with a $23.6M cap number. Heck I can’t see them being OK with a double-digit million cap number.

  19. By Matthew Thomas on Feb 8, 2014 | Reply

    Do you hope in the draft we get an OL as our first pick.

  20. By Chuck 1 on Feb 9, 2014 | Reply

    Darren,

    Thanks for your frank answer.

  21. By Big Ken on Feb 11, 2014 | Reply

    Rip on Colledge? Yes, last year I thought he was mediocre at best, certainly doesn’t command that bid salary. Bring on Watford and draft a guard-center late/UDFA.

  22. By shooter28 on Feb 18, 2014 | Reply

    Darren Colledge is actually ranked as one of the NFLs better LG’s, but, at 32 years old he makes far to much money for a interior linemen with Arizona needing to add talent at other positions. If Arizona makes D.Colledge a June 1st cut designation, they could add 4.5-5+ million in cap space for the upcoming season. Jasper Brinkley is another guy i think will be a cap casualty freeing up close to 3 million, as well as possibly Ryan Williams. With LG Jonathan Cooper healthy now who Arizona drafted 7th overall in the 2013 draft, unless Colledge takes a sizable pay cut (which at 32 wouldn’t surprise me) then cutting him makes the most sense for Arizona. Arizona drafted RG Earl Watford in round 4 of the 2013 draft and stashed him away developing him all last year , and word is he is ready to start & they have RG Paul Fanika who started all last year as well. Both are much cheaper options. I think Arizona will sign one of the best FA LTs on the market , hopefully a LT like Anthony Collins and I think they will draft a big physical OT to stick at RT this upcoming season who will be the LT of the future but will be broken into the NFL on the right side at RT. Big, Physical , Powerful OTs like technician LT Z. Martin out of ND who has excellent technique and is very polished, or T. Lewan, Cyrus K, A. Richardson all could fall to Arizona at 20th or they could get a guy like OT Morgan Moses in round 2. In the first 3-4 rounds I think we will see Arizona take a OT, SS, OLB , and possibly a receiving TE or WR. Wouldn’t surprise me if Arizona snuck in a developmental QB prospect in their in round 3 or 4 in LSUs Zach Mettenberger , Jimmy Garoppolo, or possibly A.J McCarron. With all of Arizona’s other needs in the draft , QB is at the bottom of the list though so im not sure. I saw above someone suggested Arizona not re-sign Tight End Jake Ballard?? Why would Arizona not want him back?? TE Jake Ballard didn’t sign with Arizona until after the bye week , half way through the season, so he didn’t get to much in the playbook or understand all of it , yet he still earned playing time which is impressive because Arians offense is one of the NFLs most complex. Jake Ballard has 7 receptions for 80 yards and 2 Touchdowns last season . In New York when he was on the Giants SB team Ballard had 38 receptions for 604 yards , 15.9 YD/AVG , and 4TDs. With Jake Ballard 100% healthy now and actually having a full off-season and training camp to learn the offense , Jake Ballard will be a very solid receiving and blocking TE for the Cardinals. Ballard is 6″6 runs a 4.7 40 and is a proven commodity as a solid receiving TE . Rob Housler had 39 receptions for 454 yards, 11.9 YD/AVG , and 2TDs & with Housler rare size speed combination I think Housler will be a good playmaker as a receiving TE this next season as long as he stays healthy, but Arizona keeping both of those TEs is critical. They need to bring in true #1 possession receiving TE this off-season, but both Ballard and Housler are solid #2 receiving TEs. Housler has all the tools to be a #1 receiving TE but just needs to put it all together which he has struggled with.

  23. By Eazy E on Feb 20, 2014 | Reply

    Fitz is getting bank! Thanks for breaking it all down Darren! It comes down to the major sports especially team sports, don’t need a damn salary cap! Too much trouble with it.

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