Saw this on Reddit. Thought it was a better talking point than trading McDuffie, or trading resources for a LT. Also hoping I can get a better understanding from some of you guys who understand it more than me.
[OC] Assessing how aggressively teams are using future cap space - the Eagles effectively spent 399 million on their 2024 roster, 32% more than the average team and the most in the league
In recent years, teams have become more aggressive in structuring backloaded contracts to take advantage of the fact that the cap increases every year. Howie has taken this further than any GM in the league.
To assess this, I used APY, which is the average yearly cap hit of a contract. For example, if a player has a cap hit of $5 million this year and $25 million next year, their APY is $15 million.
The average team is effectively spending $303 million on their roster, much higher than the current salary cap of $260 million. While this shows most teams are pushing some of their player's cap hits to the future, none are close to the Eagles. There are multiple reasons the Eagle's value is so high
1. Howie has signed many core players to long term, backloaded contracts
1. Howie aggressively uses void years to push money owed later for even short term contracts. For example, CJGJ has a cap hit of 14.5 million for the Eagles in 2027, even though his three year deal ends in 2026
1. Howie already been employing this strategy, meaning the Eagles had $61 million in dead cap in 2024.
You can see other teams like the Niners and Lions leaning into this strategy, giving long extensions to core players that push their cap hits into the future. Notable, the Chiefs have not, meaning they have the option to start spending more aggressively if they adopt this practice.
The most interesting question is if this practice is sustainable. Howie seems to plan to continually kick the can down the road, always paying the current roster with future cap. The advantage of this is clear, having a larger effective salary cap allows you to assemble/keep a talented roster. But there is a downside, it limits flexibility and can make it hard for a team to reset in a down year. Whether the Eagles will run into this problem, and whether adopts this practice across the board remains to be seen. [Reply]
Originally Posted by htismaqe:
Please do not turn this into a political argument. That is not my intention.
Teams using void years like this are essentially banking on the bills never coming due. They're operating like the federal government - just keep borrowing money in present years thinking that money will continue to be printed and you will never have to actually pay for it.
Teams are building these back loaded contracts assuming the salary cap will go up and up and up. It's a calculated risk and if something should happen like a wrench in the CBA, they will come crashing down.
Also hitting those draft picks and trades/FA signings seems to make it easier in those tight years. [Reply]
Originally Posted by Coochie liquor:
Still trying to understand the backloading of contracts. Does that just mean they’re pushing guaranteed money to future years, or is that non guaranteed money to make the contract seem bigger because of APY?
It's mainly pushing back guaranteed money. The downside comes when the contract ends, the money that's been spread out over the void years accelerates onto the present year.
For example, Thuney is on the last year of his deal, but hypothetically we could convert most of his base salary into a signing bonus, and spread it out over 5 years (2025 + 4 void years). Then when his contract ends in 2026, the money we spread out over those void years would accelerate and become dead money on the 2026 cap. But effectively we would have moved roughly half his cap hit for 2025 onto 2026. Or we could extend him in 2026 and continue kicking the can down the road.
That's the simple version, I don't entirely understand the option bonus voodoo the Eagles are doing. I gather the principle is the same, but I can't decipher what exactly their Spotrac pages mean. [Reply]
I’d say two things can be true at the same time. On the one hand the chiefs have been very conservative on using their credit card. So when people say we can’t afford this or that… yes we can. We have plenty of flexibility. We just want to build a long window versus crashing and burning in year 5.
Deshaun Watson is a very very good example of how that comes to bite you. They created Frankenstein contract. In hindsight it was a bad deal. A huge overpay. But the reason the contract is truly awful is because they kept restructuring it. In order to free up more money today they kept pushing guaranteed money to the back. It’s almost comical that the guy is now a $72m cap hit. And $170m to cut. Yikes.
That being said I do feel like we should use our purse a little more. Mahomes is entering the end of his peak and who knows how much longer Reid has. I wonder if the sobering reality of an aging kelce is going to change how we approach this new era. [Reply]
Originally Posted by Rainbarrel:
The Chiefs also have to factor in a possible new stadium. Mahomes time will be short when completed, and new stadium tickets very high
Chiefs are only paying 100k in dead money to Kamal Hadden. Eagles are paying $29 million in dead money and almost $27 million of that is going to Kelce and Cox.
Eagles have actually averaged over $60 million dead money since 2021. They had $63 million this year. This is a terrible business plan if you have a young Mahomes.
They didn’t spend hardly anything on FA’s bc of that dead money. They just found 2 of the biggest grand slams in Zack Baun and Mekhi Becton. Drafting Mitchell and DeJean helped as well.
Of course you can’t compare that to us. They drafted in the top 10 multiple times recently and got Jalen Carter and DeVonta Smith.
It’s an overly aggressive plan that requires you to be right far more than being wrong. Last year they were wrong and we saw what happened. [Reply]
Originally Posted by crayzkirk:
From my limited understanding, these void years allow cap/salary to be turned into cash/singing bonus. The signing bonus can be split over the years of the contract. What I don't understand is how you can write a contract for 5 years and have it void after 3 years. This leaves the cash on the books however the player is free to go elsewhere.
My research indicates that this was allowed during covid because of the reduction in the salary cap. The Saints were in deep trouble so they allowed this. When Brady went to the Bucs, they did something similar: pushed his signing bonus over a longer period. However because Brady retired, everything including the signing bonus was voided.
Seems like this is something that really shouldn't be allowed as it's being leveraged in a way that was not intended. Leave it up to the lawyers to find a way to take advantage of this.
From what I understand they still had to pay him when he retired. Which is the tradeoff with void years. Bucc's had something like 35 million in dead cap space because of these prorated void years. [Reply]
Originally Posted by RunKC:
Chiefs are only paying 100k in dead money to Kamal Hadden. Eagles are paying $29 million in dead money and almost $27 million of that is going to Kelce and Cox.
Eagles have actually averaged over $60 million dead money since 2021. They had $63 million this year. This is a terrible business plan if you have a young Mahomes.
They didn’t spend hardly anything on FA’s bc of that dead money. They just found 2 of the biggest grand slams in Zack Baun and Mekhi Becton. Drafting Mitchell and DeJean helped as well.
Of course you can’t compare that to us. They drafted in the top 10 multiple times recently and got Jalen Carter and DeVonta Smith.
It’s an overly aggressive plan that requires you to be right far more than being wrong. Last year they were wrong and we saw what happened.
The league really bailed Howie out last year letting him nab Mitchell AND DeJean. Mixed with Fangio’s hiring, you could see the success coming from a mile away.
And I get it, each team’s gotta do their own thing, it’s not like I’d go back and trade Worthy for DeJean. But damn man he got both those guys far below their projected overall draft rankings.
I wouldn’t count on GMs to not do it again either. Veach has to capitalize on those same opportunities and when you have a player who is far better than where you are being presented an opportunity to draft them, you gotta take them.
Can you imagine if the league lets a CB of that quality drop to us this year and we can pair them with McDuffie for at least five years? Those are layups you gotta sink no matter how you’re managing your cap. If you don’t — and if the Eagles hadn’t — they’re not world champs. [Reply]
Originally Posted by crayzkirk:
From my limited understanding, these void years allow cap/salary to be turned into cash/singing bonus. The signing bonus can be split over the years of the contract. What I don't understand is how you can write a contract for 5 years and have it void after 3 years. This leaves the cash on the books however the player is free to go elsewhere.
My research indicates that this was allowed during covid because of the reduction in the salary cap. The Saints were in deep trouble so they allowed this. When Brady went to the Bucs, they did something similar: pushed his signing bonus over a longer period. However because Brady retired, everything including the signing bonus was voided.
Seems like this is something that really shouldn't be allowed as it's being leveraged in a way that was not intended. Leave it up to the lawyers to find a way to take advantage of this.
You can say it shouldn't be allowed, but it benefits the teams, because they get cap flexibility, and it benefits the players because they get bigger contracts and more money. Who do you think is going to put a stop to this? [Reply]
But most teams attempt to "peak" - they put some good pieces in place and then in an attempt to actually get a superbowl window of 1-3 years they mortgage future cap to win now by creatively structuring a few more superstars into the roster, just spending on the credit card intending to pay it off a few years down the line.
The Chiefs should not be doing that, they don't "only" want a 1-3 year window. [Reply]
Originally Posted by Jamie:
It's mainly pushing back guaranteed money. The downside comes when the contract ends, the money that's been spread out over the void years accelerates onto the present year.
For example, Thuney is on the last year of his deal, but hypothetically we could convert most of his base salary into a signing bonus, and spread it out over 5 years (2025 + 4 void years). Then when his contract ends in 2026, the money we spread out over those void years would accelerate and become dead money on the 2026 cap. But effectively we would have moved roughly half his cap hit for 2025 onto 2026. Or we could extend him in 2026 and continue kicking the can down the road.
That's the simple version, I don't entirely understand the option bonus voodoo the Eagles are doing. I gather the principle is the same, but I can't decipher what exactly their Spotrac pages mean.
I'm not sure, but I don't think that's true - if a contract has multiple void years I think the cap hits stay on those years unless the player is cut before the end of the contract. [Reply]
