This week news broke that Miami Dolphins defensive tackle Ndamukong Suh allegedly told his teammates, according to the NFL Network’s Ian Rapoport, “I run this defense, I’m going to be here for the next five years, there is no guarantee any of you will be as well. Only a handful of guys are good enough to play with me right now.” Whether Suh’s comments are words he actually said or not, one thing is certain: Suh was correct about the other guys in the locker room.
He was wrong about himself, though.
Granted, Suh did sign a six-year contract with the Dolphins during the 2015 offseason, one worth as much as $114.375 million. But this is the NFL. Contracts are not fully guaranteed, as they are in professional baseball or basketball. Suh’s next five years are as up in the air as any other player in the league’s are. There’s little pointing toward Suh playing out his entire contract in Miami, as that is simply the nature of the game.
The structure of NFL contracts are a tricky business, designed to reward players not only for past performance but also for future production, while at the same time protecting the teams that pay out the deals from overspending on invariably declining assets. This is why Suh’s contract has nearly $60 million in guaranteed money. And it’s also why the Dolphins, in a sense, hope to not pay him a penny more than that.
Suh’s contract is actually a very good example of how deals are structured in the NFL and an informative starting point for our ongoing look at NFL contract and salary cap movements.
Suh’s base salaries for 2015, 2016 and 2017 are fully guaranteed—$985,000 for 2015, $23.485 million in 2016 and $9.985 million for 2017. His signing bonus of $25.5 million is also guaranteed. But for 2018 through 2020, each year’s salaries are only guaranteed if he remains with the team on the fifth day of each new league year—and even then, only a portion of that is given him.
While Suh is set to make just under $17 million in 2018, just under $19 million in 2019 and $18.36 million in 2020, $8.5 million, $9.5 million and $8.5 million, respectively, will be his guarantees in each of those years.
Because of this, Suh is more expensive to keep than cut for those years. The dead money charges—or cash that counts against a team’s salary cap for cutting a player still under contract—on Suh’s deal would only amount to what he is still owed in signing bonus. And because Suh’s signing bonus cash runs out in 2019, a season before his contract expires, Miami’s dead cap number on Suh in 2020 is zero dollars.
— Bill Barnwell (@billbarnwell) February 12, 2015
NFL teams are balancing risk and reward when handing out contracts. But they are also considering the immediate and long-term implications to the salary cap as well. The salary cap, as we all know, is the money the league metes out evenly to each of the 32 teams to play their players every year. In 2015, this amount was $143.28 million; it should go up to around $150 million in 2016. But many teams have unspent cap space from 2014 (or even earlier) that they can roll over to the following season. That’s why some teams have closer to the league cap amount to spend every year than others. The Dolphins, for example, had $7,770,411 in rollover cap from 2014 and currently have over $9 million they can take with them into 2016’s league year.
Going over the cap has serious consequences—voided contracts, lost draft picks. There is also a cap floor, with teams having to spent 89 percent of their total cap cash between the years of 2013 and 2016. That’s not 89 percent per year, mind you—it’s 89 percent of their four-year cap total (and does not include the rollover cash they take with them). The punishment for not doing so is also very minimal, with unspent cash going to the NFLPA (the players’ union).
Worrying about the cap floor is a waste of time; no teams will violate the rule, just as it’s incredibly rare (though far more damaging) for a team to be over the cap. Also, the salary cap protocol includes with it something called the Rule of 51, or rather, that only the top 51 contracts (out of 53 players, plus the practice squad) actually count against a team’s salary cap. The final two contracts eliminated are typically minimum salaries (sometimes even prorated based upon when the players were signed), and thus never much more than $400,000, and usually less. This is a technicality that matters little, but is worth knowing about when trying to understand how teams spend their money.
Teams do need to make sure they have enough money to pay their immediately impending free agents, their draft picks, any street free agents they have their eyes on while also keeping in mind who could be hitting free agency in a year or two or three.
An NFL roster, and the money that goes into it, is an endlessly fluid puzzle. And when the NFL can be accurately used as an acronym for “Not For Long,” how to pay the players while knowing that their useful contributions are finite resources, there is a lot of financial jiu-jitsu that goes into the assemblage of contracts that fill out a team’s yearly salary cap spending.
The contracts are complicated, the salary cap a difficult balancing act. My goal with this regular feature here at The Comeback, for you, is to provide a greater understanding of these deals and to demystify the intricacies of how NFL teams spend their money and why.