Restructuring Contracts Jeopardizes Pittsburgh Steelers' Future Cap Space
Once again, Omar Khan and the bean counters in the Steelers' front office are tasked with performing accounting hocus-pocus, making dollar amounts disappear from Pittsburgh's 2013 salary cap ledger.
This is becoming one tradition that Steelers fans are tiring of. Watching their favorite veterans fall victim to a financial bloodletting is not a pastime the faithful of the black and gold particularly enjoy experiencing.
But reality humanizes our 'Burgh heroes and this year's reality is no exception.
According to Spotrac, a sports contract website, the Steelers will have a total cap hit of approximately $133 million, which is $11 million over the estimated 2013 cap value of $122 million.
"Just restructure contracts!" rings the desperate rallying cry on comment boards and sports talk radio lines throughout Steelers Nation.
And why not?
Ostensibly, this looks like the correct course of action. After all, the Steelers seem to do it with regularity to find room.
Indeed, the purpose of restructuring a contract is to take away from the base salary and transfer it to bonus money. The player likes it because he gets more money up front. Management likes it, at least in the short term, because it makes room under the cap.
Nonetheless, what seems like a no-brainer panacea to the common fan is not without consequences. In essence, restructuring a contract is the proverbial can-kicking that eventually rears its ugly head later on down the road.
Should the Steelers release Troy Polamalu?
You see, each time a contract is restructured, the new bonus money gets prorated up to five years of the contract and adds onto the initial bonus money from the original contract. The teams can't just make that value disappear and it eventually becomes "dead money" if a player is released.
To get an understanding of the repercussions of restructuring, one only needs to look at Troy Polamalu's 2013 cap hit.
Overall, Polamalu will have $10.1 million of his salary count toward the cap with $7.5 million coming from base salary.
Unfortunately, releasing him won't make it all go away since he would have $5.275 million of dead money count against the cap, which is a by-product of an earlier contract bonus and restructuring.
Because of that, if the Steelers were to release Polamalu, they would have to be careful about when they did it.
It would be more prudent to release him after June 1 because his dead money would be spread out over this year and next.
However, the league mandates that all teams be cap-compliant by March 12. Therefore, the Steelers would have to eat the entire amount this year if they needed to release him before then.
Restructuring Polamalu's contract before the deadline makes no sense as Polamalu only has two years left on his current contract. Doing anything contractually new with him, aside from a pay cut, would require an extension, thereby pushing more money down the road.
The Steelers have much more wiggle room to massage the contracts of younger players such as Lamar Woodley and Lawrence Timmons. However, the same type of scenario would happen with them.
Now, the Steelers are better at working the cap than most teams. Some poorly-managed teams have a significant amount of dead money annually counting toward the cap from guys that are no longer gainfully employed.
Nevertheless, the Steelers' generosity to their tested veterans, however noble, can be a double-edged sword.
And as we have seen over the last few years, that sword cuts deeply, gutting the franchise of their veteran leadership.
So, the next time you want the Steelers to throw big money at younger players like Keenan Lewis, think about the last few years and the whole restructuring game. And then think about how all of it will affect the team's future cap space.
After all, future cap space is a terrible thing to waste.
All contract values and information courtesy of Spotrac.
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