Saturday, March 8, 2008

June 1st Designation

6:20pm EST

June 1st is an important date in the NFL. Players cut before this date, must have any unamortized signing bonus accelerated to the current year. Players cut after this date, have any unamortized signing bonus money accelerated to the next season. Several years ago, before teams got the hang of the salary cap, June 1st cuts were a big deal and there would be several quality veterans that would be cut on this date. With the large salary cap increases (42% increase in the last three years) and the fact that teams have learned to manage their cap much better, there isn't as great of a need to wait until June 1st to cut players.

With the most recent CBA extension, there was a new rule implemented. It allowed teams to designate up to two players as June 1 cuts, release them immediately and have the cap implications treated as if the player(s) were cut on June 1st. Both the owners and the players wanted this designation. The owners because they could release players now, free up a roster spot to sign veteran free agents. The NFLPA wanted this rule, because it allowed the players to be free to negotiate a contract earlier in free agency instead of having to wait until being officially cut on June 1 to look for a new team. In the past, most teams had used most of their current year cap space by June 1st and had little cap space to sign these players. Players released after June 1st often times had very limited options.

I see two potential candidates for possible June 1st designation

Kalimba Edwards

Edwards was a healthy inactive for the final two games of the 2007 season, he's due a base salary of $3.9M and $100,000 workout bonus. The Lions are not going to pay that kind of cash to a player that they didn't even think could help their team late in the 2007 season. In 2006, Edwards signed a 5 year contract and received an $5M signing bonus. $1M is allocated to each year ($5M/5 years) and $1M is already accounted for in the Lions cap costs for 2008, while another $1M is allocated to 2009 and 2010. If Edwards is released outright or traded, the Lions will save $2M against the cap ($4M in compensation less the $2M allocated to 2009 and 2010). If he's designated as a June 1st cut, the Lions will save $4M against the current year cap on June 1st and have $2M of dead cap in 2009. Dead cap is having a cap cost for a player without having the player on the team.

Kenoy Kennedy

The Lions have recently drafted two 2nd round safeties, one in each of the past two years, Gerald Alexander in 2007 and Daniel Bullocks in 2006. They recently signed former Tampa Bay Buccaneers safety, Dwight Smith to a two year contract and signed Tampa Bay Restricted Free Agent, Kalvin Pearson to an offer sheet (The Bucs have until mid next week to decide to match or not). The Lions have never carried more than four safeties and Kennedy looks to be the odd man out. In 2005, the Lions signed Kennedy to a 5 year contract and gave him a $3.4M signing bonus, $680K allocated to each season ($3.4M/5 years). He's due $2.7M in base salary for the current season. The base salary of $2.7M and the 2008 portion of the signing bonus is included in the Lions current year cap figure. If Kennedy is traded or released outright, the Lions will save $2.02M against the 2008 cap ($2.7M less the $680K allocated to 2009). If they release Kennedy and designate him as a June 1 cut, they'll save $2.7M against the current year cap and have $680K of dead cap space in 2009.

Based on what the Lions have done thus far in free agency, leads me to believe that they probably designated Fernando Bryant as a June 1st cut.

Fernando Bryant

When Bryant was cut on 02/25/08, he had two years remaining on his contract. Back in 2004, Bryant signed a 6 year contract with the Lions, he received a signing bonus of $7M, which was prorated proportionately over the entire 6 years of his contract ($1,166,667 per year). In 2008, Bryant was due to receive a base salary of $3.35M, a roster bonus in early March of $500K and his current year cap cost was scheduled to be $5.017M (3.35M+500K+1.167M). When he was released (assuming the Lions didn't use the June 1 designation on him), they saved his current year compensation of $3.85M less the unamortized portion of his signing bonus allocated to 2009, for a net savings of $2.683M. If Bryant was treated as a June 1 cut, the Lions would save an additional $1,167M.

Travis Fisher, Chuck Darby and Brian Kelly have all recently signed three year contracts and George Foster signed a one year deal. Cap costs for the recent signings will be calculated when more details become available.

Estimated Cap Status $8M Under

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