The Salary Cap Issue

[Mailman]

1 hour ago, Miyagi-Do Karate said:

I feel like the Saints are still paying for Jairus Byrd!

1 more year i think 😉

[bobobonators]

33 minutes ago, ColoradoBills said:

 

I agree with your post on how the void years' work.

 

The downside is when contracts are not extended, whether by FA, traded or retire.

 

Example for the Eagles this coming year, Kelce and Cox retired, and they have a $25M dead cap hit.

The day does come when you have to pay for players NOT on your team anymore.

 

The Eagles have taken on this risk and so far, they have done pretty well with it.

The Browns, on the other hand, have done the same thing BUT are facing a horrible result.

I see the "Void Year" option as a useful tool but not a panacea for the cap.

I’m certainly not an expert, but the void year option may be a tool for a team like the Bills bc we are so close. We have our franchise QB. We have a top tier RB. Some pieces on defense. Allen is turning 29. Likely will have ~4 more years in his prime and then will still be really good likely for another couple of years but will likely start tailing off. 
 

We have ~4 prime years of Allen to take this home. Go all in. 

[MJS]

Why is this an issue? All the teams operate under the same rules. All of them have access to the same levers to pull. All of them can structure contracts to include void years. The fact there is flexibility and levers to pull is good.

 

Eventually, the chickens come home to roost. The Saints were pulling all the levers for years, and they've been paying for that now.

[Mailman]

1 hour ago, BarleyNY said:

Teams like the Eagles can outspend teams with a more traditional cap structure by 15-18%. That’s a huge advantage. The mechanism is to push out as much cap space as possible by using signing bonuses and void years rather than salary and roster bonuses. I’ll explain how that works in another post. 

Just remember that the most important factor is cash spending. Teams have cash budgets for each year and the cap structuring follows that. There are some drawbacks and risks with the Eagles approach:

- It is aggressive and sustainable, but it’s even keeled. There is no room to push “all in” and spike spending for a season or two. 

- You need an owner willing to spend that much extra. There are actually very few of those. Most would rather pocket the money. Mike Brown has always pocketed what he can.

- Teams have to bet on the right players because it is difficult to move on from the expensive ones if things sour. Myles Garrett is a good example. The Browns operate with the same cap management style as the Eagles. It’s nearly impossible for them to trade MG this offseason.

- And the big one. The cap must co time to rise at a fairly predictable rate. If we have another Covid year where the cap falls, then there could be very big negative repercussions. 

 

So Cincy could keep both Higgins and Chase if they wanted to, but they don’t want to spend that much money. They will be compliant with the spending floor and structure their contracts so that it looks like they don’t have much space. That gives them a story to tell their fans when they let a Tee Higgins leave. Owners like Mike Brown love this structure for that reason and they don’t care if the Eagles outspend them and get a competitive advantage. 

Yep, they deploy a form of Ralph's cash to cap approach from the early to mid 2000's. Don't miss those days! Brown family is cheap!

[ColoradoBills]

22 minutes ago, bobobonators said:

I’m certainly not an expert, but the void year option may be a tool for a team like the Bills bc we are so close. We have our franchise QB. We have a top tier RB. Some pieces on defense. Allen is turning 29. Likely will have ~4 more years in his prime and then will still be really good likely for another couple of years but will likely start tailing off. 
 

We have ~4 prime years of Allen to take this home. Go all in. 

 

Beane and McDermott may do that.

[SoonerBillsFan]

1 hour ago, bobobonators said:

I’m certainly not an expert, but the void year option may be a tool for a team like the Bills bc we are so close. We have our franchise QB. We have a top tier RB. Some pieces on defense. Allen is turning 29. Likely will have ~4 more years in his prime and then will still be really good likely for another couple of years but will likely start tailing off. 
 

We have ~4 prime years of Allen to take this home. Go all in. 

Allen 4 more prime years? 7-8 is my call.

[bobobonators]

17 minutes ago, SoonerBillsFan said:

Allen 4 more prime years? 7-8 is my call.

I’m being conservative. I’m not saying he’ll fall of a cliff. But I’m also not going to expect MVP type seasons when he’s 36-37yrs old. 

[Straight Hucklebuck]

2 hours ago, BarleyNY said:

Cap basics:

- The cap hits for salary and roster bonuses hit in the year they are paid. 

- Signing bonus cap hits are prorated over the life of the contract for up to 5 seasons total. 

- Void years are fake contract years used to push out cap hits from signing bonuses. 

- When a player is cut or traded then all remaining cap hits from a signing bonus accelerate into the current year (or following year if after 6/1).

 

Example of two players paid the same amount for a 1 season contract:

- Player with a 1 year contract with $2M signing bonus and $10M salary. Cap hit is $12M in Y1. 

- Player with a 1 year contract with 4 added void years, $2M salary and $10M signing bonus. Cap hits would be $4M in Y1 and $8M in Y2. This is because the signing bonus is $2M/season for 5 seasons. Then since the contract voids the remaining 4 seasons of signing bonus money accelerates into year 2. 

 

It’s worth noting that if a player is extended before his contract voids, then the cap hits would not accelerate at that time. 

 

So you can see how it helps when you factor in a historic 8% increase in the cap. Just structuring the contract above like that is a cap savings of $8Mx.08=$640k. For nothing really. And those numbers get large when you go out 4 seasons on longer term contracts. Players don’t even get cash early anymore. It’s guaranteed, but is usually just paid out as if it were salary. 

So realistically, if the Bills are -$11M in cap space now, how much space can they open?

 

And then after that - what is their approach - just try and bring back the 2024 Bills? Extend Cook, Benford, Rousseau, Shakir, Bernard.

 

Re-sign Hollins, Gilliam, Hamlin, Morris

 

Because the trade route for a DE. Garrett has cap hits of $19M and $20M, Crosby has cap hits of $27M and $24M.

 

So you extend either guy, how are you getting those cap hits down low enough and still paying all those internal FAs and extensions.

 

I guess this is where this offseason is hard to gauge for me - fans want the playmaking DE, but Beane talks about how they’re close and they just need to kick the door down. 

[Warriorspikes51]

3 minutes ago, Straight Hucklebuck said:

So realistically, if the Bills are -$11M in cap space now, how much space can they open?

 

And then after that - what is their approach - just try and bring back the 2024 Bills? Extend Cook, Benford, Rousseau, Shakir, Bernard.

 

Re-sign Hollins, Gilliam, Hamlin, Morris

 

Because the trade route for a DE. Garrett has cap hits of $19M and $20M, Crosby has cap hits of $27M and $24M.

 

So you extend either guy, how are you getting those cap hits down low enough and still paying all those internal FAs and extensions.

 

I guess this is where this offseason is hard to gauge for me - fans want the playmaking DE, but Beane talks about how they’re close and they just need to kick the door down. 

Void years.  Look at the Eagles 

[Boatdrinks]

3 hours ago, Low Positive said:

Joe Burrow is so cute, pretending that Mike Brown has the cash to convert salary to signing bonuses. But really, it takes upfront cash and there is a price to pay cap-wise down the line when the run is over. 

Yep. Bengals are notoriously a cheap franchise. Sorry Joe, but huge void years not in the cards for Cincy. 

9 minutes ago, Straight Hucklebuck said:

So realistically, if the Bills are -$11M in cap space now, how much space can they open?

 

And then after that - what is their approach - just try and bring back the 2024 Bills? Extend Cook, Benford, Rousseau, Shakir, Bernard.

 

Re-sign Hollins, Gilliam, Hamlin, Morris

 

Because the trade route for a DE. Garrett has cap hits of $19M and $20M, Crosby has cap hits of $27M and $24M.

 

So you extend either guy, how are you getting those cap hits down low enough and still paying all those internal FAs and extensions.

 

I guess this is where this offseason is hard to gauge for me - fans want the playmaking DE, but Beane talks about how they’re close and they just need to kick the door down. 

True, but Beane has also said he wants sustained success, not going all out to win it one year. Hard to say which way he goes in this situation. We’ll see where the rubber hits the road. 

[Mango]

The cap is real. The bill always comes do. There is no way around it. New Orleans and Cincinnati are two very good examples of how not to manage your cap situation. The key is knowing how many chips you should push in and when to push them. 

 

To use Philly as an example, they have had an AWESOME run, and their cap management will be totally worth it, but once Hurts' contract starts to kick in, I don't think he is a good enough passer to make up for the (lack of) weapons they'll have. I know I know, SB MVP. 

[Rew]

People that complain about dead money endlessly or make comments like "we're paying him and he's not on the team!" (Under many l, but not all scenarios) don't really understand the cap at all.

 

I'll try to explain the basic concept in a way that gets to the universal driver.  In a cap inflationary environment, you are counting on the cap being bigger next year and the year after than it is today.  Under this scenario, you can take advantage of accounting rules to pay your players today, but not take the cap hit for 2 years.  If every other team is paying their players $250M (in cash), you can pay them $290M (in cash).  This comes with downsides and risks, and does not provide any advantage when cap is not changing dramatically year to year.  However, between NFLPA negotiations and overall revenue growth of the NFL the salary cap has increased 50% over the last 7 seasons.  Using the the techniques of cap deferal in this environment allows teams to consistently pay their players 10-20% more than pure "cash to cap". 

 

One downside of this is that you end up with more long term contracts instead of short term contracts.  This can be good.  If every player plays our their contracts you end up paying below market rates on an average basis.  However, players don't end up playing out their long deferred contracts, so you actually don't end up paying less than market rates, so there is a few% inefficiency penalty for doing this. Also these longer term structures end up increasing your "committed cap", meaning that a team taking advantage of the cap this way is not as flexible in roster moves as a team not doing this.  If every move you make us the right one, this isn't a downside.

 

Another big downside (and maybe the biggest factor impacting some teams) is that you still have to pay the cash, even if you are defering the cap hit.  Sometimes this cash goes to the player and sometimes it goes into escrow, but you can't take advantage of cap deferal if you don't have an owner able to keep $100's of millions tied up.

 

There is a 5 year limit on deferal, so with items like a signing bonus scheduled over 5 years means a maximum of 2 year deferal (on average).  It's challenging to come to terms with a player with all $ being deferred, so their is a practical cap of how much you can take advantage of this.  

Edited 5 hours ago by Rew

[BarleyNY]

38 minutes ago, Straight Hucklebuck said:

So realistically, if the Bills are -$11M in cap space now, how much space can they open?

 

And then after that - what is their approach - just try and bring back the 2024 Bills? Extend Cook, Benford, Rousseau, Shakir, Bernard.

 

Re-sign Hollins, Gilliam, Hamlin, Morris

 

Because the trade route for a DE. Garrett has cap hits of $19M and $20M, Crosby has cap hits of $27M and $24M.

 

So you extend either guy, how are you getting those cap hits down low enough and still paying all those internal FAs and extensions.

 

I guess this is where this offseason is hard to gauge for me - fans want the playmaking DE, but Beane talks about how they’re close and they just need to kick the door down. 

 

The big question for me is what they do about Allen. He got $60M cash last season, but he’s only due $14.5M this season. If something is getting done there then that’s where you start. 

 

As for a big trade like Garrett or Crosby the Bills would need to do a new deal for them so they could minimize the first couple year’s cap hits. 

 

The Bills can open up some decent cap space. I use OTC’s calculator to play with scenarios when I’m bored. 

[EmotionallyUnstable]

13 minutes ago, BarleyNY said:

 

The big question for me is what they do about Allen. He got $60M cash last season, but he’s only due $14.5M this season. If something is getting done there then that’s where you start. 

 

As for a big trade like Garrett or Crosby the Bills would need to do a new deal for them so they could minimize the first couple year’s cap hits. 

 

The Bills can open up some decent cap space. I use OTC’s calculator to play with scenarios when I’m bored. 

From my perspective, based on what we’ve see so far this offseason with bringing on additional coaching staff, I feel that terry is ready to buck up and giving Beane the go ahead to maximize spending this offseason.

 

How do you see Pegula, as well as the front office’s philosophy, as compared to both extremes of the Eagles vs Bengals? 

[Ed_Formerly_of_Roch]

Here's a challenge to someone with good IT skills, or maybe these days AI skills

 

Take that commercial for Progressive Ins. where the kid asks what is the economy and change it to what is the salary cap.  The rest of the script would all be valid.

 

The trouble teams get into with creating void years and moving to the back end is the team signs a guy who they think will be their savior but it doesn't work out short term(see Aaron Rodgers) or in the case of the Bills didn't they sign Trent Edwards to an extension or was  it Losman or Johnson I'm remembering??  The team kind of knows eventually you're going to be bad once your star or stars retire, but you do if that point is a long ways out in the future.  You also do it when you feel you're one or two stars away, see Diggs and Miller.  The Bills took their lumps early enough with Diggs and probably will this year with Miller.  The trouble is often instead of this being a future issue all of a sudden it's an issue next season.

[BarleyNY]

3 hours ago, ColoradoBills said:

 

Watson surely caused a problem.  The Browns went all in with other players.

They "made the playoffs" but were not going to threaten a SB.

If that's the goal of the team, well that's up to them.

 

Next year (2026) the Brown have 8 players hitting FA with a total over $80M in void year dead cap.

Every one of those 8 players are over 30 years of age.  3 are 35 years old.

Add in Watson at $73M, they are F'd.

 

They made bad decisions, followed by bad decisions.

Look at what I'm talking about in the Spotrac link.

https://www.spotrac.com/nfl/cleveland-browns/overview/_/year/2026/sort/contract_free_agent_year/dir/asc

I’ll take a look at that soon. They’ll Browns will be getting some cap relief from Watson’s contract. $13.6M from insurance from games missed due to injury last season. Moving forward they stand to get back $44.3M next season from insurance due to his achilles injury. That actually has to potential to void his guarantees if it can be proven that he did not follow protocol to protect himself from re-injury. In that case they’ll just cut him. 

 

I’ll check out the link and get back to you on it. 

 

Edit: Just looked. Some will change. For example, Wills and Winston will have no dead cap in 2026 as their last season with the Browns was this past one. Their dead cap will accelerate to 2025. Spotrac will make those - and some other - changes when the new season starts and the contract officially void. 

Edited 5 hours ago by BarleyNY

[Richard Noggin]

3 hours ago, MJS said:

Why is this an issue? All the teams operate under the same rules. All of them have access to the same levers to pull. All of them can structure contracts to include void years. The fact there is flexibility and levers to pull is good.

 

Eventually, the chickens come home to roost. The Saints were pulling all the levers for years, and they've been paying for that now.

 

Basically, this. But as some have pointed out, as long as the cap keeps expanding each year, the use of void years doesn't necessarily need to result in future austerity. Kick the can down the ever-expanding street. 

 

Where there is inequity, of course, is in the liquidity of a given ownership's finances. The ability to literally pay out large bonuses in cash sums way above the cap, year after year, is a hell of an advantage for front offices willing to be aggressive and crafty. 

 

[billsfan89]

1 hour ago, Mango said:

The cap is real. The bill always comes do. There is no way around it. New Orleans and Cincinnati are two very good examples of how not to manage your cap situation. The key is knowing how many chips you should push in and when to push them. 

 

To use Philly as an example, they have had an AWESOME run, and their cap management will be totally worth it, but once Hurts' contract starts to kick in, I don't think he is a good enough passer to make up for the (lack of) weapons they'll have. I know I know, SB MVP. 

 

You eventually run up against it because while you can push things off and borrow a little bit from future years by adding void years but you don't want to borrow from Peter to pay Paul too often. I think the argument for the Bills to take these next two years as a all or nothing proposition is legitimate. Especially since after the dead cap the Bills ate in 2024 their books are a lot cleaner and they have some runway to make it work if they really want to "go for it" short term. But the cap will always eventually come due. 

[GASabresIUFan]

2 hours ago, Straight Hucklebuck said:

So realistically, if the Bills are -$11M in cap space now, how much space can they open?

 

And then after that - what is their approach - just try and bring back the 2024 Bills? Extend Cook, Benford, Rousseau, Shakir, Bernard.

 

Re-sign Hollins, Gilliam, Hamlin, Morris

 

Because the trade route for a DE. Garrett has cap hits of $19M and $20M, Crosby has cap hits of $27M and $24M.

 

So you extend either guy, how are you getting those cap hits down low enough and still paying all those internal FAs and extensions.

 

I guess this is where this offseason is hard to gauge for me - fans want the playmaking DE, but Beane talks about how they’re close and they just need to kick the door down. 

The Bills can reasonably create about 40 mill in cap space, mostly by restructuring their biggest contracts.  To do that may add some void years to spread out the up front bonuses for the restructuring.  
 

There is a good article in the Athletic detailing some potential changes to create cap space.  https://www.nytimes.com/athletic/6112793/2025/02/05/bills-2025-offseason-roster-salary-cap/