This summer, the NBA's salary cap for the upcoming season increased by 34.5 percent overnight. The result? Free agents saw their salaries skyrocket, and the Golden State Warriors had just enough cap space to sign Kevin Durant. The league fundamentally changed the way it operates by virtue of its economics.
The NFL hasn't undergone quite as staggering a change, but its salary structure has also been rising considerably. After the cap basically stayed stagnant for three years following the 2011 lockout, it has risen steadily ever since. The cap was at $123 million in 2013, but after picking up about $10 million in each of the ensuing three seasons, the 2016 cap figure came in at $153.3 million. That's a 25 percent increase over three years.
As a result, most teams are in comfortable cap situations. We've rarely seen the sort of true "cap hell" that came for organizations like Baltimore and Tennessee in the previous decade, when they needed to shed talent just to survive. Teams have also gotten better at managing the cap and structuring contracts to maintain flexibility. As long as the cap continues to rise at this rate -- perhaps a dangerous prediction -- most organizations will be able to manage their cap effectively.
And yet, there are teams that clearly aren't able to put together the sort of roster they want because of their balance sheet. Their cap situation prevents them from signing free agents to fill holes, adding badly needed depth or retaining talented young contributors. The impact isn't always a Durant-sized void, but it is meaningful. Consider that the Denver Broncos won the Super Bowl with a ton of help from star pass-rusher DeMarcus Ware, who the Cowboys had to cut because of their cap woes in 2014.
These cap situations all get fixed -- it's not as if a team in bad shape would opt to sit out a season instead of getting under the cap -- but the corrections are painful. They're also worth monitoring a year in advance. Let's run through those teams that have cap issues coming, identify the moves they're likely to consider making to create space and figure out which players might be under extra pressure to perform in 2016.
In alphabetical order, here are the league's most troubling cap situations. This uses salary data from Spotrac and assumes a $165 million cap (before any rollover funds) for 2017.
Bad decisions with long-term contracts, injuries to key contributors and the onerous terms of the extension Joe Flacco signed after Super Bowl XLVII have left the Ravens in rough cap shape. They had to restructure the deals of Marshal Yanda and Jimmy Smith this offseason by converting much of their base salaries to signing bonuses, creating $8.5 million in cap space, but making it harder to move on from those players in the future.
The money owed to unproductive and/or injured veterans like Lardarius Webb ($9.5 million cap hit in 2017), Steve Smith ($4.2 million this season), Jimmy Smith ($5.1 million after the conversion), Dennis Pitta ($3.2 million after taking a salary reduction to stay with the team) and Terrell Suggs ($7.5 million) has forced the Ravens to miss out on retaining talented young contributors like Pernell McPhee and Kelechi Osemele in recent years.
The Ravens trust their ability to draft and develop young talent while finding bargains in free agency, but as their 2013 draft class approaches free agency, it's a reminder that even the good ones strike out. Ozzie Newsome whiffed on first-rounder Matt Elam and second-rounder Arthur Brown, but third-round pick Brandon Williams has turned into a wildly underrated nose tackle and somebody Baltimore desperately needs to keep around to form the interior core of the defense alongside Timmy Jernigan and C.J. Mosley. With Baltimore already approaching the cap ceiling, though, it will be tough to shell out the Damon Harrison-sized deal Williams will likely warrant on the open market.
It's not impossible to imagine the Ravens finding a way to retain Williams, but it will involve some tough calls. Among the moves they can make:
Decline the option on Mike Wallace. Cutting Wallace, who failed a conditioning test to open camp, would free up $5.75 million in cap room.
Release Elvis Dumervil. Baltimore drafted Boise State edge rusher Kamalei Correa in the second round as a long-term replacement for Dumervil. If Correa develops this year, the Ravens could create $6 million in space by moving on from Dumervil, who will be entering his age-33 season.
Release Pitta as a post-June 1 release. Unless Pitta manages a miraculous recovery from his second dislocated hip, the Ravens are likely to move on from their longtime tight end after this season. Designating him as a post-June 1 release would free up $5.5 million in cap space for 2017 and leave a $2.2 million cap charge on the books for 2018.
Cut Webb. The Ravens hope that the oft-injured corner will excel with a move to safety, but if he fails to live up to expectations, Newsome will have to bite the bullet and free up $5.5 million by cutting the former third-round pick.
The Cowboys are in a good bad-cap situation, if that makes any sense. They need to create cap room to sign players in the years to come: Church and possibly Williams before 2017, and then Travis Frederick and Zack Martin before 2018 and 2019, respectively. That's a good problem: You want to develop young talent and retain it. It's just going to be tough for the Cowboys to do so with their current cap situation and how it shapes up in the years to come.
Dallas has the second-most money committed already for 2017, the fourth-most for 2018 and the second-most for 2019, with much of it tied up in long-term deals for players like Tony Romo and Dez Bryant which will be difficult to escape, if so inclined. With Romo, for example, the Cowboys really can't consider moving on without incurring serious cap penalties before 2018.
So, the Cowboys will have to make some moves and trust their drafting and development to patch holes as they pop up. What sort of decisions will they make in 2017?
Continue to restructure Tyron Smith's deal. The Cowboys love to repeatedly restructure the deals of franchise stalwarts like Smith and Romo, which led to disaster when they had to cut Ware. They even build extra years into deals for the express purpose of dumping converted base salaries into signing bonuses. It's too dangerous to do this with Romo's deal in his late 30s, and Bryant's five-year deal makes this tactic less palatable, although the Cowboys could clear further space by restructuring their star wideout's deal. The more logical move is (for the third consecutive offseason) to convert $9 million of Smith's $10 million base salary into a signing bonus, spreading it over the remaining seven years of his contract, while creating $7.8 million in cap space.
Lock up Frederick to a long-term deal. This should actually create cap room, given that Frederick's fifth-year option in 2017 will be for $8.8 million, while the first year of his extension would probably be somewhere in the $7 million range against the cap. It wouldn't be a surprise for the Cowboys to give both Frederick and Martin, the two other critical pieces of their offensive line alongside Smith, the sort of six- or seven-year deals that would allow Dallas to continually restructure their contracts, too.
Cut Doug Free. He is settled in as an above-average right tackle on one of the league's best lines, but he'll be 33 next season and the Cowboys have 2015 third-rounder Chaz Green lurking as a replacement. Moving on from Free would create $5 million in cap room.
Release (or restructure) Sean Lee. The talented but injury-prone Lee has yet to play a full NFL season, having missed 36 of 96 games (37.5 percent) during his six-year career. His cap hit spikes from $6 million to $10 million next year, which would make him the second-highest paid 4-3 outside linebacker in football behind Mark Barron. Rod Marinelli could move Lee back to middle linebacker with Rolando McClain's future uncertain, but in either spot, Lee would be extremely well-compensated. Dallas also drafted Jaylon Smith, who probably profiles down the line as an outside linebacker in Lee's current position. If Lee stays healthy and plays well while Smith's knee fails to respond to treatment, the Cowboys will rightfully want to hold on to their star linebacker. But if Lee struggles with injuries yet again, Dallas might not be able to justify shelling out $10 million on the promise of what Lee could be if healthy.
The Chiefs are in an interesting spot: They don't really have many bad contracts on their books, but having invested in free agents like Jeremy Maclin and Mitchell Schwartz, while trading for (and then extending) Alex Smith, they are just about capped out for 2016 before even thinking about signing their two star free-agent defenders. General manager John Dorsey was unable to come to terms with Berry on a long-term extension after franchising his star safety this offseason, and the 25-year-old Poe is in line for a massive deal and likely eyeing the six-year, $103 million contract handed to Eagles star Fletcher Cox as a baseline.
While Kansas City fans were surely happy to see the team re-sign veterans Derrick Johnson and Tamba Hali this offseason, those moves came at a cost when it came to 2017 flexibility. The Chiefs guaranteed Hali's $5.8 million base salary and structured Johnson's deal in a way that makes it exceedingly likely they'll retain him for 2017. The two combine to cost $16.4 million in cap space next year, and while they were very good in 2015, their advancing age -- Hali will be 33 and Johnson 34 next year -- means the Chiefs are likely paying for declining players, perhaps at the expense of younger talents in their prime.
The move to extend left tackle Eric Fisher over the weekend was designed in part to free up cap room. Fisher hasn't lived up to expectations since being taken with the first overall pick in 2012, but the Chiefs still have faith that he'll develop into a competent left tackle. Fisher was in the final year of his rookie deal and was owed $7 million this year, with another $11.9 million coming as part of the fifth-year option next season. Instead, the new deal the Chiefs gave Fisher drops his compensation marginally to $6.85 million in 2016, while reducing his 2017 cap hold to $9.5 million, creating $2.4 million in much-needed cap space.
Fisher's extension is a start, but what else are the Chiefs likely to consider?
Cut Jamaal Charles. It's brutal to imagine the Chiefs moving on from their star running back, but they didn't skip a beat on offense after Charles went down with a knee injury last season, and by next year, the former Texas star will be in his age-30 season with two ACL tears in his rearview mirror. Kansas City could free up $7 million by cutting Charles, and really, he's the only veteran with a contract lending itself to an obvious release which would create serious cap space. Alternately, the Chiefs could try and extend Charles with a deal that reduces his cap hold while handing him a Matt Forte-esque contract.
Make several smaller moves. The Chiefs could create space by moving on from or restructuring the deals of starters or rotation contributors like Jaye Howard (freeing up $4 million in cap space), Dustin Colquitt ($4.1 million), Josh Mauga ($3 million) or Jah Reid ($2 million). Each of those moves would also just open up a spot the Chiefs need to fill with a new starter, though.
Franchise Poe. It's unlikely that the Chiefs will franchise Berry for the second consecutive year, given that they would owe him nearly $13 million on a franchise tag. That would make Berry the highest-paid safety in football by a comfortable margin, and it would probably be easier to negotiate a long-term deal at that rate.
Poe, though, would be a far more palatable option at the likely franchise-tag rate for defensive tackles, which should come in between $14.5 million and $15 million on a one-year deal. Cox's new deal is worth $47.8 million over its first three years. Given the market, the Chiefs could justify franchising Poe twice, paying $32.5 million over the next two years, before needing to really come to a long-term decision on his future with the team. That should be enough short-term leverage to get Poe, who has already undergone back surgery during his professional career, to sign a long-term deal before hitting free agency.
Extend Alex Smith. With two years left on Smith's deal after this season, the Chiefs could tack on two years to the 32-year-old quarterback's contract and try to push some of the heavier cap hits into the future by guaranteeing base salaries in 2018 and 2019. With longtime backup Chase Daniel out of town and no obvious quarterback of the future on the roster, the Chiefs don't appear to be moving on from their starter anytime soon, anyway.
Move on from Berry. Given Kansas City's situation and Berry's reported demands to get a deal in excess of the five-year, $51-million pact handed to Minnesota's Harrison Smith, there just might not be a fit here. It's easier to find a good safety than it is to find a star defensive lineman, which is why the latter get paid far more than the former. The Chiefs could very well move third-round pick KeiVarae Russell from corner to safety and try to use the money they save on Berry to lock up Poe.
I've written about the Saints' cap management at length on multiple occasions, so I won't reiterate many of those complaints again. The good news is that their cap situation is better in 2016 once the $10 million in dead money owed to Junior Galette comes off the books. That $10 million is there thanks to a contract restructuring before his release.
The big question, of course, is Brees. The Saints were unable to sign their star quarterback to an extension this offseason, one that would have likely reduced Brees' league-high cap hit of $30 million and created badly needed flexibility to improve one of the worst defenses in NFL history. Franchising him in 2017 isn't an option, either, given that the Saints would owe Brees a staggering $43.2 million for one year. Brees' camp knows that and, as former member of the NFLPA executive board, Brees is surely thinking about what his situation might mean for the players' union. He's not going to take a massive discount to appease Saints fans or accommodate New Orleans' poor cap management.
The Saints need to find a way to pay Brees and re-sign Unger, the center who they acquired as the centerpiece of the Jimmy Graham trade. How can they help pull it off?
Designate Jairus Byrd as a post-June 1 release. Byrd was supposed to be the last piece of the puzzle for the Saints when they signed him to a six-year, $54-million deal in March 2014, but he has been alternately injured and ineffective. The onerous structure of the deal (similar to Galette's) made it impossible to move on from Byrd before 2017, and even then, the Saints will have to push some of the spending into the future to create cap room. Designating Byrd as a post-June 1 release will lower his cap hold in 2017 from $11.7 million to $3.4 million, creating $8.3 million in space, while leaving a $4.6 million charge on the books for 2018.
Release C.J. Spiller. The Saints would have loved to cut Spiller this offseason, but the way they structured his deal means that it would actually cost more to release him ($7 million) than keep him ($4.5 million). Next year, that flips: They'll save $2.4 million by moving on from the home-run threat.
Commitment for 2017: $170.6 million
Free agent: Ryan Fitzpatrick
Jets GM Mike Maccagnan inherited a clean salary-cap slate from ousted predecessor John Idzik and proceeded to spend wildly to improve his defense. It worked, but the Jets spent this offseason with limited options before finally coming to terms with Muhammad Wilkerson on a long-term extension and signing Fitzpatrick to a one-year, $12-million deal. The Jets still need to make some moves to clear out cap space before the season starts, but they've constructed their roster for 2016.
In 2017, though, things are only going to get more difficult. They were able to get Wilkerson and Fitzpatrick signed by giving Wilkerson a five-year deal which actually reduced his 2016 cap charge from the franchise tag figure of $15.7 million to $10 million. His cap hit spikes to $18 million next year and stays between $18 million and $20 million for the remainder of his deal. That $170.6 million commitment for 2017 doesn't include an obvious option at quarterback, and it also includes the final year of deals for Brandon Marshall ($7.5 million) and Sheldon Richardson ($8.1 million), each of whom would likely expect a short-term raise as part of a long-term deal, given what they could get on the free market.
So, what could the Jets do?
Cut Ryan Clady. The Jets have an option on Clady's 2017 season at $10.5 million with only $500,000 in dead money on their cap; they could create $10 million by releasing the former Broncos star, a move that would then leave them with a huge hole at left tackle. This will likely be addressed one way or another. If Clady plays well, the Jets will use the leverage of the one-year deal to offer a longer contract with a smaller cap hit in 2017. If he plays poorly or gets hurt, the Jets will move on and free up the cap space.
Release David Harris. The run-thumping linebacker was part of the league's best run defense a year ago, but the Jets will owe him $6.5 million in the final year of his deal, which could be a lot for a guy who will be in his age-33 campaign. If he slips this year, Harris looms as a cap casualty. The Jets could also cut Breno Giacomini and save $4.5 million or go after inside linebacker Erin Henderson and free up $2.7 million.
Extend or release Nick Mangold. After basically forcing left tackle D'Brickashaw Ferguson into retirement this offseason, the Jets could force their longtime center out the door next. Mangold's $9.1 million cap hit next year would be the second-largest of any center in football; the Jets would likely want to give Mangold an extension which decreases the hit, ask Mangold to take a pay cut or move on altogether.
Restructure Wilkerson's contract. Turning base salary into a signing bonus is a classic mistake teams with cap issues make, but the Jets might not have a choice if they want to sign a veteran quarterback. If they convert $12 million of Wilkerson's $14.75 million base salary into a signing bonus, the Jets would create $9 million in cap space next year while adding $3 million to the books for each of the subsequent three seasons. It's no sweat off of Wilkerson's back, as he would just get already-guaranteed money a little earlier than otherwise expected. The only problem would be if the Jets wanted to release or trade Wilkerson before the end of his contract, at which point the leftover, unaccounted-for years of the bonus would accelerate onto their cap.
And then there are the Eagles, who fittingly have soared past the salary cap. Philadelphia doesn't have any pressing free agents, but it needs to create cap space to sign Jordan Matthews, who will be in the final year of his rookie deal in 2017 with no fifth-year option attached. The Eagles are also missing a load of draft picks from the Carson Wentz trade, having gone without three top-100 picks from 2016 with their 2017 first-rounder and 2018 second-rounder to come. Those trades deprive the Eagles of cheap, cost-controlled talent, making it that much more important to spend wisely elsewhere.
To be fair, we know this figure is coming down. Philly does have about $6 million or so in cap space it should be able to roll over into the 2017 cap, which will help a bit. There's a more obvious move to come, and we can start with that:
Release or trade Sam Bradford. It's almost impossible to imagine a situation where Bradford plays for the Eagles in 2017. If he continues to produce mediocre numbers, the Eagles will cut the former first-overall pick, and if Bradford finally has his breakout season, Philadelphia will likely trade him to open up an opportunity for Wentz and recoup some of those missing draft picks. In either case, the Eagles will create $17 million in cap space, leaving $5.5 million in dead money on their cap.
Cut Jason Peters. Injuries and aging have led to Peters slipping some from his peak, when he was arguably the best left tackle in football. The Eagles gave Lane Johnson a massive extension this offseason, which tells us that they expect him to settle in as their left tackle eventually. The only question left is when. The 2017 season is the first time that really makes sense: Philadelphia would clear out $9.2 million in cap space by releasing Peters, who will be in his age-35 season. Just one tackle in 20 years -- the Chiefs' Willie Roaf in 2005 -- has managed to make the Pro Bowl during his age-35 season.
Do something about Connor Barwin's contract. The six-year, $36-million deal Barwin signed after Chip Kelly's arrival in Philadelphia has been one of the best free-agent deals in recent memory. Barwin has chipped in with 26.5 sacks over the past three years while helping out regularly in coverage. Barwin will be owed $18.6 million over the final two years of his deal, and Philly might very well be able to leverage that into an extension on friendly terms and reduced cap hits over Barwin's next couple of years in town.
Move on from Brandon Graham. This is also supposed to be the breakout year for Graham, who was drafted to be a 4-3 end but has spent the last few years as a 3-4 outside linebacker. He should excel in Jim Schwartz's 4-3 defense as a wide-nine edge rusher, but if he doesn't, the Eagles will have to think about moving on. There's no guaranteed money in Graham's contract after this year, and Philly could save $5.5 million by releasing him. That money could be better put to use elsewhere if Graham fails to impress this season.