Let’s talk about the Salary Cap, and teams uses of it

[Coochie liquor]

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.

The link https://www.reddit.com/r/nfl/s/hPxltIJ2OQ

[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.

By [summing the APY of the players on 2024 rosters](https://overthecap.com/contracts) instead of their 2024 cap hits, [we can see which teams are spending future money on current players](https://docs.google.com/spreadsheets...it?usp=sharing). I also included current dead cap in the calculation to get a full picture of 2024 spend.

|Team|2024 Effective Spend|
:--|:--|
|Eagles|$ 399,805,070|
|49ers|$ 366,851,304|
|Lions|$ 359,733,177|
|Jaguars|$ 358,339,795|
|Dolphins|$ 353,120,509|
|Vikings|$ 350,201,592|
|Bills|$ 344,423,075|
|Browns|$ 333,851,514|
|Jets|$ 328,251,189|
|Texans|$ 325,446,538|
|Broncos|$ 325,374,288|
|Saints|$ 306,845,039|
|Packers|$ 305,439,917|
|Ravens|$ 298,782,626|
|Buccaneers|$ 298,613,176|
|Panthers|$ 298,160,314|
|Falcons|$ 297,660,693|
|Cowboys|$ 288,264,115|
|Chiefs|$ 287,862,988|
|Seahawks|$ 287,471,672|
|Commanders|$ 283,193,993|
|Titans|$ 282,935,233|
|Giants|$ 282,618,087|
|Chargers|$ 275,610,516|
|Steelers|$ 275,385,342|
|Bengals|$ 274,078,824|
|Bears|$ 268,491,690|
|Patriots|$ 263,299,279|
|Colts|$ 259,613,378|
|Cardinals|$ 259,151,131|
|Rams|$ 245,518,950|
|Raiders|$ 232,167,153|

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.

[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?

[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.

[Coochie liquor]

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.

Maybe I’m misunderstanding, but seems if you’re pushing money (possibly dead money) into future years. Why wouldn’t that be easier to manipulate on those years with the cap going up so much every season? Seems like if that’s what you’re doing it would come much closer to evening out in the future years because of the expanding cap.

Also saw this comment on another post that was related. And thought it was pretty interesting, comparing the Chiefs and Eagles success with GM philosophy and drafting.

Eagles have had a few incredible years of drafting and acquiring players via trade and FA. Devonta Smith in the first round in 2021. Dickerson in the 2nd. Drafted Jurgens in '22 in the 2nd. Traded for AJ Brown in 2022. Jalen Carter and Nolan Smith in 2023. Mitchel and DeJean in the first two rounds in 2024. They are not missing on high end draft picks.

Meanwhile in KC...in 2021 we drafted Bolton and Humphrey in the 2nd rounds. Big win on Humphrey. Bolton is above average but not a star. Biggest win is probably Trey Smith in the 6th. That value is INSANE. But the Chiefs have whiffed on a lot of OL the last 4 years.

2022 was an incredible year for Veach and Co. McDuffie / Karlaftis / Cook / Chenal / Watson / Pacheco. But whiffing on Pickens for Skyy Moore was brutal. Sure we won a SB but you have a guy who barely contributed to the team for 3 years taken in the 2nd round. You can't stack misses in the first 3 rounds and keep winning SBs.

2023 was a disaster. FAU another huge whiff. Rice looks like a top 15 WR but he got hurt early and is facing a huge suspension when he returns. Morris (2nd rounder) isn't playing. Conner is mediocre. None of the other players are anything. You can't have a draft and pick up ONE STARTER and expect to keep winning.

2024 is another mediocre draft. Worthy looks like a star, which is great. Your first round players should be contributing. But then another whiff in the 2nd round with a player who was benched for the SB. Wiley got hurt and Hicks looks promising. Everyone else is a nobody.

Chiefs need to draft better in the first 3 rounds. They also need to ACCUMULATE more draft picks. Trade away players. Trade down. You need more ammo in the draft. Veach's best draft came when he had 10 selections. The last two drafts we've only had 7 picks and we've missed on a lot of early rounders.

Since 2021, Chiefs have drafted 30 players. Their hit rate for quality starters is 46%, which is exactly the hit rate on 1st round QBs. To be a successful team you need to draft better than average. Veach did a great job assemling the junkyard Avengers (JuJu, DHop, Hunt) but he needs more pieces to move around the chessboard. I know it's crazy but I'd think about trading anyone not named Chris Jones or Pat Mahomes in order to do this. Now I know the Chiefs would NEVER but if you can get a 3rd or 4th for Kelce I'd do it.

That is the comment. It’s not mine but found it interesting comparing drafts by the GMs

[Red Dawg]

Every team should do this. 399 mil and the cap is 250? Damn the squad we could have.

.

[Coochie liquor]

One last draft comparison from the other thread. Again not my comment, but still eye opening. Especially considering in the last 8 years. Eagles have gone to 3 SBs and won 2, KC been to 5 won 3. Hard to argue their approach isn’t as close to our success than any other team in that time period. And they’ve done it with quarterbacks who aren’t nearly on the same level as Mahomes. Here the comment

For the most part they draft better in first round than us. Some of this is do to draft position (2 of their last 5 first round pics were top 10 pics, they have 9th, 10th, 13th, 22nd and 30th pics of their last 5 first rounders)

If you go back 10 years and evaluate their first round pics. They still have Lane Johnson on their roster, and even though they spent a 1st rounder on Carson Wentz, they traded him for a 1st rounder and 2nd rounder.

Of their 2nd round pics last 5 picks, all but one are on the team and they include Jalen Hurtz, Cooper DeJean, Landon Dickerson (3x pro bowler), and Cam Jurgens the guy who replaced future HOF center Jason Kelce, and has higher PFF than Kelce did.

Chiefs last 5 years.
McDuffie is only probowl drafted.
FAU just started to show some things this year, but not great for draft position
George starting to come on this year, his 3rd year.
No draft pick in 21.
CEH - Love as a person, absolutely bust for 1st rounder.

And in the last 10 years we haven't drafted in 1st round 4 times. With a couple exceptions the pro bowlers we've had are free agents or people we traded for, which costs Cap space.

I think our front office does VERY WELL, hands down one of the best there is. Just that the eagles have stuck gold more often in past 5 years.


So yeah they’ve obviously had much better draft positions over that time span as well. And that plays heavily into the results. But Veach has still been kinda so so at drafting, especially early rounds. But 22 made up for some of that.

[chiefzilla1501]

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?

Could mean a few things. Sometimes it’s to push the overall number higher so the deal looks better (ex. A top 5 LB contract). You’ll usually have high back years with little to nothing guaranteed in prorated dead cap.

Often times it’s just deferring because you don’t have the cap space in the front years. These are usually guaranteed or guaranteed in principle by dead cap (you’re not cutting a player with $80m in dead cap). Player would likely have guarantees on the back years.

Often times there’s a renegotiation trigger. For example, a huge number in year 3 of a 5 year deal. Usually low guarantees on the back years. It gives some small flexibility for the team to have an out on the contract. It also protects players from not getting paid less. If the player busts the team can just bite the bullet and pay the hump so the back years stay unguaranteed. Usually it means the team will turn base salary into signing bonus which spreads the cap hit longer. The back years are more guaranteed because it creates more dead cap. This might also come in a mid contract roster bonus where the player has way less leverage - unlike base salary the team can just refuse to exercise it

[Coochie liquor]

Originally Posted by chiefzilla1501

Could mean a few things. Sometimes it’s to push the overall number higher so the deal looks better (ex. A top 5 LB contract). You’ll usually have high back years with little to nothing guaranteed in prorated dead cap.

Often times it’s just deferring because you don’t have the cap space in the front years. These are usually guaranteed or guaranteed in principle by dead cap (you’re not cutting a player with $80m in dead cap). Player would likely have guarantees on the back years.

Often times there’s a renegotiation trigger. For example, a huge number in year 3 of a 5 year deal. Usually low guarantees on the back years. It gives some small flexibility for the team to have an out on the contract. It also protects players from not getting paid less. If the player busts the team can just bite the bullet and pay the hump so the back years stay unguaranteed. Usually it means the team will turn base salary into signing bonus which spreads the cap hit longer. The back years are more guaranteed because it creates more dead cap. This might also come in a mid contract roster bonus where the player has way less leverage - unlike base salary the team can just refuse to exercise it

Makes sense. Just seems to me with an ever expanding cap, those hits won’t be as hard to overcome.

[Rainbarrel]

I feel bad, I had no idea Chiefs fans were starving and homeless. Poverty moves are the future

[pugsnotdrugs19]

Without delving in too deep right now, here’s how I compare the way the Chiefs are building their roster vs. Philly:

If the Eagles draft good to great every year, they’ll continue to be fine and compete atop the NFC because their roster remains elite irregardless of the void cap hits to come.

If the Eagles have a couple subpar, even bad drafts consecutively — they’ll quickly start to feel the impact of their approach as they can’t keep pace with expensive players they’ll still be paying to not be on the team. Being a Super Bowl contender will not be on the table anymore.

The same kinda holds true for all teams, but to me, the pressure to nail the draft is higher on a team who is going Philly’s route. At least if the goal is to win long term, five to ten years or more like Kansas City is trying to do.

I’m of the opinion that the reason Kansas City has maintained this stranglehold on the AFC is because they’ve been the most patient, long term minded team. They always have the flexibility to do anything they want to do, whereas a lot of our top contenders have stretched it to the point that they’re forced to eat these massive dead cap numbers just to put a roster together year to year.

In other words, as someone who still wants to win three or more rings, I’d prefer KC not go into the void year stuff until Patrick is on his last few holes.

[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.

[pugsnotdrugs19]

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.

Now, if I were a Philly fan with Jalen Hurts as my QB, I could reasonably hear that it’s the right approach and they wouldn’t have won this Super Bowl otherwise.

But for this current Chiefs team, with Mahomes, I don’t think it’s the way. Not unless the goal is to just win one more. Again, that may be the move in his last five years or so, exactly what Tampa did to form their super team.

[Coochie liquor]

Originally Posted by pugsnotdrugs19

Without delving in too deep right now, here’s how I compare the way the Chiefs are building their roster vs. Philly:

If the Eagles draft good to great every year, they’ll continue to be fine and compete atop the NFC because their roster remains elite irregardless of the void cap hits to come.

If the Eagles have a couple subpar, even bad drafts consecutively — they’ll quickly start to feel the impact of their approach as they can’t keep pace with expensive players they’ll still be paying to not be on the team. Being a Super Bowl contender will not be on the table anymore.

The same kinda holds true for all teams, but to me, the pressure to nail the draft is higher on a team who is going Philly’s route. At least if the goal is to win long term, five to ten years or more like Kansas City is trying to do.

I’m of the opinion that the reason Kansas City has maintained this stranglehold on the AFC is because they’ve been the most patient, long term minded team. They always have the flexibility to do anything they want to do, whereas a lot of our top contenders have stretched it to the point that they’re forced to eat these massive dead cap numbers just to put a roster together year to year.

In other words, as someone who still wants to win three or more rings, I’d prefer KC not go into the void year stuff until Patrick is on his last few holes.

So let’s say we decided to extend Pat for 7 more years, and backload that contract. Moving dead cap that far into the future would likely be a much smaller percentage of the cap than current year. I mean even if he’s not on the team (god forbid) or retires (obviously a different story cap wise) the dead cap would be much more manageable if the cap continues to grow. Especially with the possibility of them adding an 18th game in the future. Cap went up 13.6% this past season. Or am I misunderstanding how this works?

[crayzkirk]

Interesting stuff, it beats picking apart the SB problems.

The Chiefs have been drafting 29-32 for seven years and even before Patrick, the Chiefs were a playoff team. They haven't really had a down year where they have been able to pick up players in the top half of the draft. Success comes at a price.

The Tyreek trade allowed them to pick up some needed players, at this point, I believe they are going to have to really hit their drafts as players age/price themselves out of what the Chiefs can afford. Again, the price of success and having a target on your back.

[Rainbarrel]

You can't factor in the Jaguars destroying the WR market by way overpaying