All offseason, we’ve been trying to keep on top of salary cap issues, especially with the added complications brought about by the uncapped year and the Final Eight Plan. We’ve made every effort to review the accuracy of the information, but we welcome your comments, questions or corrections. Thanks, as always, to Jason from the unofficial Jets cap site for his assistance with this post.
One of the most oft-discussed issues affecting the short-to-mid term future of the Jets in the Mike Tannenbaum/Rex Ryan era is the fact that they might ultimately struggle to fit all of the talent they have accumulated over the last few years under the salary cap. Several key players have contracts which are either set to expire, or due for renewal and many have questioned whether some of the Jets’ apparent cost-cutting moves this offseason have been made with an eye on their future cash commitments. As Rich Cimini wrote earlier this week, GM Mike Tannenbaum faces a headache next season, especially with the extra restrictions of the uncapped year and the uncertainty surrounding the collective bargaining agreement (CBA). However, nobody has really delved into the numbers to investigate how difficult it might be to bring everybody back. At the moment, media members are assuming it will be tricky, but incorrect assumptions about the Jets cap position have been made in the past.
There are so many variables in play that it is virtually impossible to project future cap charges but, after the jump, I have done my best to set out the situation in as much detail as possible in order to give some consideration to the Jets flexibility in terms of what they can do over the next few years, assuming there is no lockout.
How Much Cap Space Will They Have?
I am going to work on the basis that – although they might be negotiated soon – none of these extensions will kick in until 2011, so the starting point is obviously to figure out what the salary cap will be in 2011, which unfortunately provides us with an immediate stumbling block. If the cap had continued to rise at the rate it was in 2009, it would be somewhere in the region of $140m when the cap presumably returned in 2011. However, the Union was reportedly willing to play the 2010 season with no increase to the 2009 cap, which suggests that it is more likely to be around $130m. Jason suggested it could be as low as $123m, so we immediately have an enormous margin of error. It might be easy to resign all their players if the cap is $140m, but impossible at $123m, so this announcement could have a significant impact on the Jets’ plans. Let’s work on the basis of $130m, but keep in the back of our minds that the figure could swing either way from there.
Stage two involves identifying any dead money. Since signing bonus money is not accelerated in an uncapped year, some of the dead money cap hit when a player such as Alan Faneca was released in 2010 can potentially carry over to 2011 and bite in that year if the cap returns. However, this depends on the treatment adopted by the new CBA, assuming we get one. It’s understood the NFL is keeping track of team salaries as if there was a salary cap and anticipated that the NFL may only impose these cap charges where the main reason for that player’s release was to make future cap savings, which might be the case for Kerry Rhodes, but it is unlikely that it would be for Thomas Jones or Alan Faneca. The Jets (and most other teams), they have been operating as if there was a cap, which may mean that these dead money cap charges do not apply in a future year, provided they remain below it. All this is speculation, but hopefully this dead money will not apply, at least not in full. The total amount of dead money at stake is approximately $7.3m, so again this decision could make or break their plans. Let’s assume that $5m of the dead money hits the books.
The Jets currently have 31 players under contract for 2011, with a total cap cost of about $103m*, including the dead money discussed above assumed to be $5m. That leaves them with $27m to resign everybody, which when you have seven major contract extensions in the pipeline, doesn’t sound like a lot. However, D’Brickashaw Ferguson is under contract for 2011, but his extension is likely to give him a cap number significantly lower than his projected 2011 cap number because he has a $10m salary due. This will therefore actually create additional cap room. Darrelle Revis is also under contract and, for reasons I will get into later, it is possible his contract will not be extended until after 2011. Even if it is, his 2011 cap number might not be any higher.
* This figure comes from Jason’s site, although I have replaced the number for Revis with $5m to take into account the likelihood of them buying back that year of his deal and also taken into account $5m of dead money. Salary information released can sometimes be incomplete or inaccurate, but over the last few years, but most of the details are likely to be accurate.
The Jets have some roster flexibility though. A lot of this will depend on how the 2010 season plays out, but here are some potential 2011 releases, together with the amount of additional cap space they would produce:
– Kris Jenkins – $4.6m
– Damien Woody – $3.3m
– Vernon Gholston – $0.4m
– Bryan Thomas – $3.7m
– LaDainian Tomlinson – $2.5m
– Jason Taylor – $2.3m
– Ben Hartsock – $1.6m
– Kenwin Cummings – $0.4m
– Either Erik Ainge or Kevin O’Connell – $0.5m
– Marcus Henry – $0.4m
I’m not suggesting all these will be or should be cut, but it gives some indication of the flexibility they have. Releasing all those players would basically create an additional $20m of cap space. They could also renegotiate lower salary figures with any of these guys. These are not the only cap space creating moves they could make either, just a sample of the main obvious ones.
Since your top 51 salaries have to be accounted for in the calculation of your cap situation and the Jets have only 31 players under contract for 2011, let’s make the assumption that they will cut five of the above list of players and assume that the cap saving amounts to $10m. Once they use this money to re-sign the five key free agents not under contract, they will be back to 31 players under contract so they need to fill out the remaining 20 spots. A few of these (for example Kyle Wilson, the 2011 first round pick and any veteran acquisitions) might have a cap number in the region of $1m, but most will be at or around the minimum salary, which is $325K for a rookie. Note also veteran players earning the minimum, which for a 30 year old can often be $800k or more only count approximately $500k against the cap. Let’s therefore assume they can fill out those 20 remaining roster spots with an average cap charge of $500K and this therefore wipes out the $10m cap saving and gets us back to a situation where there is $27m available cap space for contract extentions.
Just to recap, on the basis of all these assumptions, the Jets would have $27m of available cap space in 2011 for contract extensions;
1. Salary Cap $130m – could be as high as $140m or as low as $123m
2. Dead Money $5m – could be as high as $7.3m or as low as $0m
3. Money Saved by Veteran Cuts $10m – could feasibly be as high as $20m
Ultimately, any movement in 1 or 2 would affect the number of veterans they would need to release, but I think $27m is a reasonably accurate starting point.
Who Needs to be Extended?
Let’s look at each player that has an extension due, in no particular order…
Although Ferguson is under contract for 2011, it seems unlikely that the Jets will pay him a $10m salary, so I think both parties will be expecting to renegotiate at the end of the 2010 season. The amount of his contract is likely to be similar to that of Jordan Gross, who reportedly received around $56.5m over 6 years, with $25m guaranteed. Let’s give him $60m over 6 years, with $30m in guarantees, structured similarly to the Gross deal:
2011: $5m salary + $15m signing bonus
2012: $4.5m salary
2013: $6m salary (Note: First 3 years all guaranteed)
2014: $7.5m salary + $2m potential incentives
2015: $9m salary + $0.5m potential incentives
2016: $7.4m salary + $3m potential incentives
That’s perhaps an oversimplification, but gives you a basic idea of how the contract might realistically look. The incentives in 2014 and 2015 could simply be non-guaranteed roster bonuses. The result of this contract would be a salary cap number of $7.5m in 2011 (calculated as the signing bonus divided by the number of years in the contract and then added to the salary), which is much lower than Ferguson’s projected $12.5m cap number. However, $2.5m of that projected cap number is prorated bonus money which will still apply. Overall, the extension creates additional cap space in 2011 of about $2.5m leaving $29.5m total available cap space.
The problem with guys like David Harris is something that teams were surprised to learn a few month ago: The 30% rule still applies to contract extensions. Since he had a low salary in 2009, this would restrict the total amount of salary they could include in his contract if they offered him an extension which began in 2010. That’s why he and Darrelle Revis are more likely to get an extension which begins in 2011 and therefore does not need to comply with the 30% rule, which isn’t expected to apply beyond 2010. However, if they decide to play under a temporary agreement (unlikely, but not impossible), who knows whether these rules would continue to apply. If that did happen, it might mean that 2011 is uncapped anyway, in which case, the cap situation becomes less crucial. It’s worth considering though.
Teams can get around the 30% rules in a number of ways:
1. Signing bonuses do not count towards the 30% rule, so you can increase the salary by 30% a year and pay the balance as a signing bonus. However, if you want to give someone a $40-50m deal, but are limited to salaries of $7m (as would be the case with Harris getting maximum salary increases in a six year deal), then you would end up having to pay up-front guaranteed bonus money of $30m plus.
2. Completion bonuses are a mechanism used by the Saints to circumvent the 30% rule in some contracts they negotiated in 2009. It’s thought the league might prevent any further contracts of this type.
3. Supercede bonuses are something which the 49ers used in their recent contract extension for Patrick Willis, which appears to circumvent the 30% rule by splitting a signing bonus in two and spreading it over two years
4. Incentives can be included that the NFL will classify as not likely to be earned, although in practice they should be easy to achieve. As a general rule, the Jets don’t like to have highly incentive-laden deals, although they did do this with Jason Taylor, to an extent.
Bearing in mind that a 2011 contract extension does not need to comply with the 30% rule, Harris might see his contract structured similarly to Patrick Willis, who received his extension in 2010 and therefore did have to have a deal that complied with those rules. Willis received a $50m deal, but Harris would probably be in the same price range as a Jonathan Vilma or Lofa Tatupu. Let’s give him a deal similar to them: 6 years, $40m, with $17m guaranteed and structured like the Willis contract. This would represent 80% of the Bart Scott deal, which seems reasonable considering the Jets basically paid a premium to ensure they could lock him up:
2011: $0.5m salary and $12m signing bonus
2012: $0.7m salary and $5m option bonus (to be converted to a signing bonus)
2013: $0.8m salary and $4m in easy to achieve incentives
2014: $1.1m salary and $4m in easy to achieve incentives
2015: $1.5m salary and $4m in easy to achieve incentives
2016: $1.9m salary and $4m in easy to acheive incentives
That seems a realistic deal. Any of the incentive money could be converted to salary or easily reclassified as a non-guaranteed roster bonus in negotiations. The good thing about this contract is that it would have a salary cap number of only $2.5m in the first year. That cancels out the cap saving made by extending D’Brickashaw Ferguson, leaving $27m of available cap space.
Antonio Cromartie is perhaps the most difficult contract to project out of all the Jets seeking an extension. If he plays like he did in 2007 (Pro Bowl, 10 picks) then he will command a contract of $40m plus, maybe even $60m. However, if he struggles, like Lito Sheppard did, then he’s unlikely to be able to command a deal of much more than $2-3m a year on the open market. Assuming he falls somewhere between the two (solid starter, not Pro Bowl material), I’m going to estimate he could command about half of what Dunta Robinson got as this year’s highest priced free agent CB. Let’s backload this because of his off-field issues, but give him a healthy signing bonus and modest salary bumps:
2011: $1.5m salary + $8m signing bonus
2012: $2m salary
2013: $2.6m salary
2014: $3.4m salary
2015: $4.4m salary
2016: $5.7m salary
Overall, he gets $28m over six years and the first year cap number here is just under $3m. That leaves $24m for Mangold and the two receivers.
Jahri Evans just signed a deal worth $8.1m a year, making him the highest paid interior lineman in NFL history. As the consensus best Center in the NFL, Mangold can probably command the same kind of money. I don’t know whether he would sign a 5, 6 or 7 year deal, but signing bonuses can only be pro-rated over six years (in fact, the last time there was a CBA, this was limited to five in the first year, but I have assumed that will not be the case this time), so I don’t expect them to go to seven, unless the last year is a “dummy” year like in D’Brickashaw Ferguson’s contract. Since Mangold’s extension must either be delayed until 2011 or comply with the 30% rule, lets assume it begins in 2011 and is a five year deal:
2011: $4.5m salary and $12.5m signing bonus
2012: $5m salary (Note: first two years salaries guaranteed)
2013: $6m salary
2014: $7m salary
2015: $8m salary
That’s a $43m deal with $22m guaranteed. The first year cap number is $7m, leaving $17m of cap space available to extend the two receivers. If the deal was longer, the cap number at the outset would likely be the same or perhaps even slightly less.
Braylon Edwards and Santonio Holmes
Let’s tackle these together. Many writers have speculated that these two will battle it out and the better man will earn a deal for next year. That might well transpire, but if they did want to bring both back, could they do it? As with Cromartie, it is difficult to project these two. The off-field issues again have an effect upon their open market value, but if Edwards emulates his 2007 season or Holmes builds upon his 2009 season, they are approaching $10m a year levels of production. It’s likely that one of these will emerge as the number one target, which will reduce the value of the other, but averaged out we will hopefully see them end up somewhere between Anquan Boldin (4 years, 28m) and Larry Fitzgerald (4 years, 40m). I’m going to project 4 years, 33m for Braylon Edwards and 5 years, 36.5m for Santonio Holmes, but it could easily be the other way round:
2011: $6.5m salary + $2m signing bonus
2012: $7.5m salary (Note: First two years guaranteed)
2013: $8m salary
2014: $9m salary
2011: $1.8m salary + $20m signing bonus
2012: $2.4m salary
2013: $3.1m salary
2014: $4m salary
2015: $5.2m salary
The total first year cap hit for both deals is $12.8m, well within the available cap space remaining. This leaves us with a “buffer” of about $4m.
What Other Considerations Are There?
Okay, so we’ve shown a theoretical example of how the Jets can retain all of the guys with an extension becoming due, without completely having to gut their roster, albeit with multiple assumptions and caveats. We even had a small amount of money left over, which can protect against things like the cap being lower than anticipated or one of the guys outperforming expectations and demanding more money (or my projections being woefully inaccurate). It’s obvious that they have some decisions to make in respect of which players they will need to release and how they would replace those, so this may all hinge on young players like Pitoitua, Westerman and Slauson coming through the system and contributing. Having said that, I’ve been prudent with many of my projections, so the number of players they need to release might not be as high as you might think.
What else needs to be taken into account though? Here’s a list of some other issues that might affect their plans:
- Will any of the other players on the team be wanting extensions?
The obvious one is Jerricho Cotchery, whose contract seems extremely reasonable at $4m per year. If Santonio Holmes and Braylon Edwards are able to command almost twice as much, will Cotchery (who is signed through 2012) be happy about this? Ultimately, one of these three is going to be relegated to number three receiver if all three are retained and one will have to be paid accordingly. If Cotchery plays well enough to retain his starter’s spot, perhaps he’ll get a salary bump and whoever the number three is will end up earning something similar to Cotchery’s current deal. That’s if they decide to retain all three after this year.
- What about Darrelle Revis?
While Revis is likely to be extended soon, it may not to kick in before 2011 because of the 30% rule (although, as outlined, there are ways around this). The Jets can buy back his contract for 2011 and 2012 and pay him salaries of $5m and $15m respectively (the $15m includes incentives, but he is likely to earn these). Since they will already be laying out such a large amount of signing bonuses in 2011, it’s possible they might wait until 2012 and then pay Revis a bonus much bigger than the $15m he is set to earn, which can then be spread out over several years for cap purposes. In the end, he will command somewhere in the region of $80m plus over 7 years. If the Jets do elect to extend him in 2011 (or even sooner), I would imagine that they would structure it in such a way that the cap number in 2011 would not be significantly higher than the $5m they have already budgeted for (and is accounted for in the above numbers), so we probably don’t need to account for any additional cap room at this stage.
- Are there any other extensions on the horizon?
Not really. Everyone else major is signed through 2012. Keller and Greene might be the next two they address. Other guys, such as Jim Leonhard and Sione Pouha would probably not be expensive to bring back or replace and therefore no extra cap space would be required.
- What if there’s a lockout?
In reality, there’s a good chance there will be a lockout. Once the dust settles, we’ll have a little better idea of the salary cap landscape, but once the cap returns, the Jets should be in a similar situation to the one outlined above. If the cap doesn’t return, or returns with exceptions to enable teams to retain their players (like in the NBA), then retaining everyone might prove to be easier than first thought.
- What about Franchise Tags or RFA tenders?
I’ve assumed that the Jets won’t use any franchise tags, because they generally produce a larger cap number than you would get from a long term deal (and because they aren’t generally popular with players). I wouldn’t be surprised to see one used if any of these players are not intended to be retained (so that player can be traded instead). Once the new CBA is signed, I expect they will return to the old rules, which will mean that none of the players discussed will be RFA’s. If we do end up with a set of transitional rules again, then it’s possible some of them could be RFA’s, which (as we’ve seen this year) would give the Jets the option to retain them at a cheaper level. I don’t expect to see this though.
- What about Shaun Ellis and Brodney Pool?
These guys haven’t been considered above, but both will be out of contract after the season and perhaps will be considered for extensions. I think that will all hinge on exactly what the level of the salary cap is and who needs to be released to create sufficient cap room to re-sign everyone they want to. If the Jets find themselves in a situation where they can get rid of LaDainian Tomlinson or someone like that and then use the resulting cap space to retain someone like Ellis for another year, it’s a decision they’ll weigh up nearer the time. If not, they will look for guys like Pitoitua and Donovan Warren to step up – or maybe address the needs via the draft.
- What about 2012 and beyond?
It becomes harder and harder to project the further you go into the future, because fewer players are under contract. Of course this means the Jets will have plenty of roster flexibility and I’m sure they are planning ahead as we speak. The deals I outlined were not deliberately staggered, but there was no obvious pattern of front or backloading either, so the cap numbers in year two work out to be pretty similar overall. They will need to find $5-$10m of extra cap space for Darrelle Revis, but they can release more veterans from that earlier list, plus the cap should increase, so it should be feasible. They will ultimately need to fill out a lot of their roster with low cost players and veterans earning the minimum rather than higher priced guys like Taylor and Tomlinson, but that was what the Patriots have managed to do for most of the last decade.
-Why don’t they just frontload deals now and make the most of the uncapped year?
Unfortunately, you can’t do this, because of the 50% rule, which prevents you from reducing 2011 salary to less than half of the 2010 salary. Also, if you have to comply with the 30% rule, as all 2010 extension do, then you are limited to how much of any 2010 consideration will actually be accounted for in 2010 for cap purposes. However, there is one possibility in that Braylon Edwards contract should be treated as a new deal (because his contract expired) and therefore might not need to comply with the 30% rule. This might enable the Jets to offer Braylon a frontloaded deal during the 2010 season, if he plays well enough, which could make a significant cap saving and further lighten the total burden for 2011.
It was never going to be possible to accurately project the 2011 cap situation with so many variables in play. However, hopefully I’ve been able to demonstrate a realistic scenario that shows that it’s possible that the Jets could retain most, if not all of their best players after this season, if they so desired. They might have to release some veteran players to be able to afford it, but recent history has shown that they are not afraid to do that. I don’t know whether their plan is to keep everybody – perhaps they intend to move several of these guys and find cheaper replacements, then spend the money saved on other needs – but they certainly have a lot of flexibility and most of the team have plenty of motivation to perform as well as possible in 2010.