BGA: Draft Day Trade Implications

There haven’t been any transactions confirmed since last week, so I’m going to take a break from giving you salary cap updates to instead look at the cap implications of trading any veteran players during the draft. This should help to give us more insight into who can be traded, who can’t be traded and who is likely to be considered.

It’s entirely possible that the Jets won’t trade any veterans during the draft. In recent years, the only time they’ve done that is when they completed the Mark Sanchez trade and used a package of players to reduce the cost of moving up. However, this can serve as a useful guide in the event that any veterans are traded and also will discuss the situation if a trade is made later on in the offseason, so it could be revisited if that happens.

By way of a disclaimer, I should say that the information presented here is based on the contract details we have, which are correct and complete in most cases, but there are sometimes clauses in there that we weren’t aware of that only come to light once they are triggered. After the jump, a brief overview of the rules and then I’ll attempt to categorize the relevant players into groups.

When a veteran player is traded, the acquiring team takes on their new player’s contract. In practice a new deal is often renegotiated almost immediately (as happened with the Jets and Kris Jenkins/Thomas Jones), but not always. However, that doesn’t necessarily mean that there’s no dead money issues for the trading team. Let’s make a simple example.

If Player A is on a five year contract which was made up of a $5m signing bonus and $1m salary in each year, the signing bonus is spread over the life of the contract, so the cap hit each year would be $2m. However, if he is traded, the team that trades him will get a dead money hit equal to the sum that has been paid but not yet counted against the cap. So, if they trade him after two years, there will also be dead money of $3m because only $2m of the $5m signing bonus has been accounted for to that point. The $3m is said to accelerate against that year’s cap. Incidentally, if he was cut rather than traded, the position would be the same. The acquiring team would then get him with three years remaining on his deal and with $1m salary due in each year. They would not be required to account for any of his signing bonus.

Things start to get more complicated when guaranteed salaries are involved. These do actually pass over to the other team in the event of a trade and the money remains guaranteed. However, if the player was released, the team has to account for and pay over the guaranteed future salaries as dead money. If, in the example above, $500K of Player A’s salary was guaranteed each year, the position if he was traded would not change, but if he was cut, that would mean there was $1.5m more of dead money to account for.

Obviously deals can get even more complicated that that, especially when multiple bonuses and things like salary advances are involved, but those are the basics.

As recently as this week, it was reported by NFP that the Jets could be looking to trade lower level players to clear cap room. Assuming that report to be accurate, bear in mind that the lower level players and those with a cap saving attached would be the more likely ones to be traded from these lists.

Cannot Be Traded

There are three players for whom the dead money arising in the event of them being traded would be impossible for the Jets to afford with their current amount of cap room, based on the contract information we have. Darrelle Revis is the first, and perhaps most important, as some media members might try to speculate this is possible in light of his recent comments. Revis received an $18m bonus last year and only $3m of it counted against the cap. There are also some outstanding potential dead money charges in respect of bonus money from his previous deal. Unless, exceptionally, that $18m option bonus is refundable in the event he is traded (a bit like Tim Tebow’s salary advance was), there is no way they could do this and remain under the cap.

Mark Sanchez is the next. He signed an extension last month and received an $8m signing bonus. $6.4m of that bonus counts against future cap years, so would accelerate against the 2012 cap if he was traded. That’s in addition to significant other dead money charges. While his salary guarantees would pass over to the acquiring team, these dead money hits would seem to make trading him unviable. Again, it’s unlikely that signing bonus would be refundable in the event of a trade, although there was a $10m salary advance in 2010, so that could potentially lead to cap credits that might offset most of the dead money not relating to that signing bonus. This is uncertain though and it’s just as likely any ongoing issues related to that salary advance were swallowed up by the new extension.

Finally, Nick Mangold received $16m of bonus money over the last two years, most of which has yet to be accounted for. Trading him would give rise to dead money of over $12m, so that isn’t possible.

Could Be Traded, But Almost Certainly Won’t

There are several big money signings that the Jets would not be able to cut because of the dead money arising. However, some of those can be traded if enough of that dead money relates to guaranteed salary in the future. The best example is Santonio Holmes. The dead money if they cut him would have been $12.5m. However, the dead money if they trade him is just $5m, which is less than his base salary, so that would actually create $2.5m of cap room. I’d suggest that trading Holmes is unlikely more for the fact that the acquiring team might be wary of taking on those salary guarantees than the Jets’ willingness to part with him. Obviously that would affect his value too.

D’Brickashaw Ferguson, David Harris and Antonio Cromartie all fall under this category too. Ferguson has rolling guarantees, Harris has high salaries, which are all guaranteed and while Cromartie seems to have a more tradeable contract, they did just pay him a $3m roster bonus, which I would suggest means that if they were going to trade him, they would already have done so rather than paying that.

Can’t Be Released, Can Be Traded

There are three players that the Jets wouldn’t want to release because they have guaranteed salaries, but if they got the opportunity to trade them and pass the guarantees onto the acquiring team, that would make the dead money affordable. These are Bart Scott, Calvin Pace and Wayne Hunter.

Trading Scott or Pace seems unlikely in light of Scott’s recent comments about how committed he is and the fact that Pace is still a key player right now. Also, neither is likely to be classed as a low level player. In each case, the net cap cost of cutting them would be between $1m and $2m, but the net saving if they were traded would be just under $3m for Scott and just over $1m for Pace, based on the information we have. This would also slightly reduce the dead money in 2013 if they are released or traded next year.

I had been kicking around the idea of trading Hunter on draft day for a while. Over a week ago, I wrote:

I wonder if they could offload Hunter in a trade up scenario … It’s not just to get rid of him. First of all, it might reduce the price of moving up, but even if it doesn’t you still make a cap saving (the whole guaranteed amount passes over to the acquiring team) and you also get more of the fanbase in approval of the deal because so many of them will perceive the trade more positively if they’re getting rid of a guy they don’t like … If their plan all along was to start Vlad and maybe bring in Carey as competition after the draft (for example), then this allows them to give Hunter an opportunity where he can still earn his money without making them look bad for cutting him days after they paid Holmes a big roster bonus. That being the case, they’ve probably always felt pretty confident that they could move Hunter later on.

That’s still the low-level starter trade that makes the most sense to me, especially in light of the fact they were shopping him earlier in the offseason and the two teams rumored to be looking to trade down (Carolina and Jacksonville) actually would view him as an upgrade (Byron Bell’s rating was almost as bad as Hunter’s even though he only played two-thirds of a season and Guy Whimper gave up a league-worst 14 sacks).

Hunter’s $2.5m salary is guaranteed for this year and the acquiring team could opt to pay over $1.5m of it as a bonus to reduce the current year cap charge by over $1m. Jacksonville doesn’t have a bad cap situation though, so I doubt the salary would be as much of a concern for them. Carolina, on the other hand, are reportedly pretty tight up against the cap, although trading down would alleviate some of that for them.

Other Players With Cap Savings

Looking at the rest of the roster, these are the guys that would create over $1m of cap room if traded, not including recent acquisitions such as Laron Landry and Tim Tebow, together with approximate savings:

Brandon Moore - $3m
Dustin Keller - $3.2m
Mike DeVito - $3.1m
Eric Smith - $1.4m
Matt Slauson - $1.3m
Ropati Pitoitua - $1.2m

I’d suggest that Moore and Slauson are “safe” given the lack of depth on the offensive line last season. Keller, who wouldn’t be a lower level player anyway, was rumored to be in discussions for an extension, so that seems unlikely too. DeVito is an important player, although I do wonder if they’ll renegotiate or extend his deal to reduce his current year cap number. Trading him would seem unlikely unless they’re concerned about his durability and planning to draft his replacement early in the draft.

As for Smith and Pitoitua, I would suggest that neither has significant value and since the same saving could be achieved by cutting them, there isn’t much to be gained from trading them. Smith was disappointing last year, but the team has constantly talked him up and blamed last year’s struggles on his injuries. The Jets lack depth at the safety spot, but they just had Yeremiah Bell in for a visit, Jim Leonhard is waiting in the wings and they may add someone in the draft, so his place could be in more jeopardy than you’d think. Pitoitua’s cap number seems manageable enough and last year was his first full season, so I’d expect them to retain him, given the promise he showed.

Lower Level Players

Beyond that, you’re left with a lot of guys that could net you a saving of less than $1m. While they might get value for an Aaron Maybin or John Conner, both figure to be in their plans this year. Then you’re looking at guys like Patrick Turner or Marcus Dixon, who would represent a minimal saving and likely wouldn’t return any value beyond a conditional pick.

There are also guys who would be unlikely to be traded due to dead money. Kyle Wilson would cost them over $3m and Muhammed Wilkerson would cost over $4m, in each instance more than their cap number for the year. Not that this couldn’t be afforded, but it would represent poor resource management and I don’t think either is in danger of being moved.

Tebow

Could they flip Tebow to another team, perhaps even Jacksonville who tried to get him before? Yes. Will they? No. I’m pretty sure about that one (although you never really know, do you?)

Technicalities

If you don’t think you can trade a guy because the acquiring team won’t take on his salary, then you can’t offer to take on part of the salary yourself like they do in baseball. However, it is feasible that you could convert some guaranteed salary to a bonus and pay that before making the trade to reduce the cap commitments for the acquiring team. Seattle did something like this when they traded Aaron Curry to Oakland.

If a player is traded after June 1st, then the current year dead money is reduced (sometimes significantly) because the unaccounted for bonus money accelerates to the following year instead. This might make it possible for you to move some otherwise impossible to trade players. However, the draft is before June 1st, so if you were wanting to trade for picks that wouldn’t be possible. I suppose in theory you could instruct the team to pick the player you want and then trade your guy for that player’s draft rights in June and then negotiate a deal with them, but that seems a little convoluted and might even draw the ire of the league office.

Conclusions

There aren’t many obvious trades that the Jets can make to receive value, but there might be some moves they can make to improve their cap position. It should also be borne in mind that when you make a saving by trading a player, that saving might be wiped out when you acquire their replacement. Obviously acquiring picks or moving up is also going to increase the cost of signing rookies, which is currently estimated at just under $2m.

Hopefully this will serve as a useful resource if anyone is traded during the draft, or later in the offseason.

As ever, if you have questions, corrections or details of conflicting information, please share them in the comments section.