As the lockout languishes in its final hour, the entire NFL is anxiously awaiting the start of free agency, the first non-labor related piece of business to be conducted by the league since the draft. This period of signing players can’t come too soon either, as players will be reporting to camp just days after agreeing to terms.
For the Houston Texans, this free agency period will be more crucial than possibly any other in the franchise’s brief history. Rick Smith will have to acquire pieces for Wade Phillips so that he may turn the defense around, make it to the playoffs, and save Gary Kubiak’s job.
The problem is that next season will see the return of the salary cap after a one year gap in 2010. The cap will reportedly be set at $120 million, although there will be an exception this year that stipulates $3 million of one player’s salary can count against player benefits which will make the cap feel like $123 million.
Lance Zierlein reported yesterday on Twitter that someone from another NFL team’s front office told him the Texans were $7.5 million under the cap. That would mean that the Texans would be sitting at $112.5 million as of now with $10.5 to spend until they reach the adjusted $123 million limit.
As I stated earlier this week, I believe that some players, most notably Amobi Okoye and Steve Slaton, will be traded or cut to make room for the salary cap. Chris from Houston Diehards also logically believes that backup quarterback Dan Orlovsky, who is set to make $2.75 million, might be cut as well.
It’s hard to determine how much cap room these three would create. When an NFL player signs a contract, there are different categories his payment falls under that affect the team’s salary cap in different ways.
Base salary counts against the cap the year it is earned. Some guaranteed money, specifically signing bonuses, is prorated over the course of the deal. If that player is cut before the end of the deal, however, the rest of his base salary will not count because it is not guaranteed but the rest of signing bonus would be taken out of the cap that year.
For instance, if John Smith signs a deal that will pay him $1 million each year and a $5 million signing bonus, his cap number each year would be $2 million; $1 million for his base salary, and $1 million for his prorated signing bonus. If he were cut after the second season though, the rest of his signing bonus of $3 million that was supposed to be prorated would count against the cap that season.
There are more technical details of the cap such as likely to be earned (LTBE) incentives, not likely to be earned (NLTBE) incentives, and roster bonuses. It is important to understand the prorating of signing bonuses to know how teams pay players without going over the salary cap, but also why cutting certain players is unfeasible because they have too much prorated signing bonus, or “dead money”, still coming.
Whatever money is cleared by cutting these cap casualties, it might not be enough room for the Texans though, who want to make a splash. They will aggressively pursue a tier-one or tier-two corner back, as well as possibly a safety, nose tackle and/or wide receiver. To accomplish this, they’ll need to have a decent amount of room underneath the cap.
The other option is restructuring a current player’s contract. The theory is to take someone who is due to make a large base salary over the next few years, and extend that player to give him less money per year more money upfront with a signing bonus. This helps the team’s cap by deferring money over the deal as well as the player who gets more guaranteed money up front and less risk of getting cut because of dead money.
When a team goes about selecting a player for restructuring, they’re looking for several different criteria. Obviously it has to be someone you want on your team in the long term. That player must make a large base salary with not too many years left on his deal.
The Houston Texans roster is mostly devoid of players that fit all these conditions. The only player that makes sense on many different levels is Mario Williams.
Williams is entering the last season of his six-year rookie deal. The former first overall pick is scheduled to make $13.8 million this season. When he signed his deal he received $26.5 million guaranteed, although it is unsure how much was in the form of a signing bonus.
It is likely that Williams was going to receive a new contract sometime this season anyway. The last thing that Bob McNair would want, no matter how 2011 goes and who his coach is for next year, is for Williams to hit the open market next year.
Despite all the different defensive schemes since 2006 to include 4-3 and 3-4 schemes, Mario has been the focal point of all of them. Even if a rebuilding process is deemed necessary, the Texans will want to carry over Williams no matter what. Why not use this opportunity to lock him in the long term but also reduce his cap number for 2011?
Williams is in for a big pay day. For an example of what his contract might look like, the best deal might be that of the player who his position is modeled after; DeMarcus Ware. Ware signed a new deal in 2009 which was expensive, but very cap-friendly as long as he stays with the Cowboys for most or all of those seasons.
Ware’s deal was for $78 million over $7 years. He received a $20 million signing bonus which means that only a little under $3 million counts against the cap each year. His base salaries for the first five years were relatively low, ranging between $4.5 and $7.8 million. In the last two years though, his base salary balloons to over $12 million.
If Williams agreed to a similar contract, he would be essentially locked up as a Texan for his career, but he would also reduce his cap number for 2011 by as much as $6 million dollars. That could mean signing one more much needed player in free agency for a run at the postseason in 2011.
**Authors Note: As I wrote this article, reports started to surface that the new collective bargaining agreement might be drastically different than previously reported. Specifically, the $120 million cap might instead be the salary FLOOR with no hard cap for the first couple of seasons.
This would obviously remove the need to restructure Mario Williams’ deal for the purpose of reducing the Texans cap number in 2011, but I feel that it would still be wise to extend him as soon as possible to avoid letting him leave via free agency next year.