Looking at the New York Jets Salary Cap Part 2- Restructures and ExtensionsTweet
Welcome to Part 2, of what is essentially a mini book on the Jets salary cap! You can read part 1 right here.
Nick Mangold- Mangold carries a cap charge of $9,117,100 in 2013 with $3 million due in the form of a roster bonus on the 3rd day of the league year. Clearly he is not going anywhere in 2013 and the Jets should simply guarantee the roster bonus and prorate it over the next 5 seasons, reducing his cap charge to $9,117,100 and only increasing his future cap charges by $600,000 per season. You could go further and convert more of his base salary to a bonus to gain more cap room, but I would not do that . I am getting nervous about Mangoldís long term prospects with the team. His play has been down two seasons in a row and I fear that he hasnít allowed his body to heal right the last two years. Nick has an incredibly high cap charge for a center in 2015 in what is essentially a true extension/renegotiation year. If you go more than this conversion amount it gives the Jets no outs from the contract in 2015 and I think they need to keep those outs in place.
2013 Savings: $2.4 million Cap; $0 Cash
2014 Savings: ($600K) Cap
Santonio Holmes- Set to count $12.5 million against the cap in 2013, Holmes represents the third largest cap hit on the team. Holmesí contract is one of those I often talk about that has built in flexibility due to the fact that the Jets used a large guarantee rather than prorated bonus in structuring his deal. While he has almost no trade value the Jets could opt for the prorated bonus method to bring his numbers back in line with where they would have been had they used that structure in 2011. I probably would not opt for that but weíll discuss it.
In some ways Holmes probably should go in the paycut or release category, but ego is involved with him and even a paycut on paper is going to have to be a reshuffling of money to the backend of his deal. Holmes is set to earn $11.25 million in salary plus a $250,000 workout bonus. Of that money $7.5 million is fully guaranteed and $250K is guaranteed for injury, but being that he is injured the Jets are probably stuck with that payment so its $7.75 million in guarantees. That all sounds bad, but letís look deeper and see where the Jets have some power.
If released Holmes will count for $11.5 million in dead money. While that is a high figure the Jets will gain $1 million in cap space. Thatís a little power, that one would think is offset by the need to cut Holmes a $7.75 million dollar check. Unlike most of their other contracts, though, Holmesí guarantee was reported to be of the much weaker variety in that the team receives offset credits if he signs with another club. How does that matter? If the Jets cut him the Jets pay him $7.75 million. He is going to sign with another team. For how much? Considering injury, ineffectiveness in 2011, and a bad reputation around the league $4-$5 million a year would be the most I think he would earn. Since he canít double dip his max earnings are likely $7.75 million this year. The Jets get credits for salary earned so that $1 million in savings can quickly grow to $4 or $5 million and their cash obligation reduce to $3 or $4 million. Thatís power. It renders the $11.25 million base salary worthless .
What that means is the best financial future for him is tied to staying with the Jets both in 2013 and an opportunity to earn his $9.5 million in 2014. So in my mind the difference between $7.75 and $11.25 immediately comes off the books. Like I said he is going to want the contract to still say he makes his $45 million so you simply roll that $3.75 million into 2015 as a roster bonus. By doing this we donít touch his 2014 cap number while lowering his 2013 cap charge to $9 million. Now some may say why not just release him. While I could see that point he still is a talent and the Jets do need something on offense in 2013. While I do not think he fits at all in a WCO system maybe you can get something out of him. I look at that as different as Paceís situation where you could probably replace him with a warm pulse. The dropoff between Holmes to Clyde Gates is huge, no matter how much Holmes mopes around the field.
Do you want to cut more out of Holmesí cap? There are two avenues by which we can do that. One of the good things about a player being injured is that you can work with his contract to skirt the salary cap for a season by using in game roster bonuses as a replacement for salary. Holmes was only active for 4 weeks in 2012 so only ľ of the total roster bonus would count on the 2013 cap if the Jets went that route. This is what they did with LaRon Landry last year to save on cap space.
Now the negative with that move is that I donít think his side would be as willing to accept a pay reduction since there is danger that the bonus money will not be earned. To make it work you would have to do something that most of the fanbase would be against and that is guarantee an offsetting amount of salary in 2014, a guarantee that would void only upon playing a certain number of games in 2013. How would that work in practice? You would pay him a base salary of $4.3 million in 2013 plus his $250,000 workout bonus. Those salaries are earned regardless of injury. You would convert the remaining $3.2 million into per game roster bonuses worth $200,000 per game in which he is on the gameday active list. Because he was only active 4 games in 2013 only $800,000 of the roster bonuses count towards the Jets 2013 cap with the rest only affecting the cap at the end of the season. This brings his cap charge down to $6.6 million. I could see doing that since the only pain in 2014 is if he doesnít play 16 games in 2013 because he would be more difficult to cut. The $200,000 per game was just for illustration and you could do any number you want as long as his base salary is at least $840,000 in 2013. I like this idea if he is staying here.
The other option is to go all in on Holmes and decide you definitely want him here in 2014. What you do in that case is take the $7.5 million base, reduce it to $840,000 and convert the remaining $6,660,000 to a signing bonus. That reduces his 2013 cap charge to $4.56 million, but it increases his 2014 cap to $12.97 million and his 2014 dead money to $6.94 million. I donít like either of those numbers. Even if he plays well it puts you right back to square 1 with his contract. I donít think he is worth the risk of this move even if it means short term health. Im going to aim for a paycut and a ďlets play ballĒ mentality with the contract.
2013 Savings: $5.9 million in Cap and $3.5 million in Cash
2014 Savings: $0K Cash and Cap
David Harris- Overpaid with no escape for the Jets as more or less his entire salary in 2013 is guaranteed with no offsets so he has no reason to give anything up for the Jets. $13 million as a cap charge for Harris is ridiculous. You could shuffle some of his money into 2013 and take $10 million in cap charges each season, but that seems foolish. You could go the void clause route, but that also seems foolish for the future. Really I think this is a situation where you have to look to extend Harris and get his value back in line with the marketplace. A few years ago I thought Harris was worth around $6.5 million a year which makes much more sense than his $9 million a year he earns now. The realistic guarantee for an ILB is just under 30% so on a 3 year extension my guess is we are looking at $19.5 million in new money and $5.9 million in new guarantees.
How do I accomplish this? I guarantee the next two years base salaries at $1.4 million a year and then prorate the current $9.5 million in guarantees plus a new $3.1 million to fulfill the remainder of the new contract guarantees. This gives the Jets major cap relief in 2013 and minor cap relief in 2014. It maintains a slight escape in 2015 and a realistic escape in 2016. Here is how I would potentially structure the deal:
2013 Savings: $6.98 million in Cap and ($3.1) million in Cash
2014 Savings: $980K in Cap and $3.5 million in Cash
Antonio Cromartie- I donít think the team is good enough anymore to justify Revis and Cromartie, so my feeling is if the decision is made to keep Revis the Jets need to trade Cromartie, a move that must be made within the first 3 days of the League Year. That move saves the Jets $8.25 million in cap space in 2013 and $10.75 million in 2014. If Revis is going to leave the team then it means the Jets need to make the full commitment to Cromartie and extend him. I think the market for corners at his level is around $9.75 million a season with about 45% of the contract guaranteed. My guess is you would be looking at a 4 year new money total of $39 million and 6 year total contract worth $58 million. What would a guesstimate structure look like:
Such a deal, in which the 2013 and 2014 base salaries are now guaranteed, guarantees him a roster spot in 2014, which he did not have before, and most likely 2015. Thatís a takehome of $31.15 million in cash for Cromartie from 2013-2015 which is a pretty fair number. Once 2016 rolls along its anyoneís guess what happens.
2013 Savings: $2.19 million in Cap and ($10.25) million in Cash
2014 Savings: $1.19 million in Cap and $4.3 million in Cash
Mark Sanchez- Of course I saved the best for last. I think we all agree that the dead money charge associated with cutting Sanchez, over $17 million in 2013, is simply unreasonable. In a prior posting I outlined the realistic trade market which is probably going to still hit us with $14 million in dead money. So the bottom line is that barring a miracle the Jets are stuck so we need to make the most out of a bad situation and do what we can to reduce his $12,853,125 cap charge. Now what I am going to propose is based on the thought that the Jets can not trade him this season.
I am going to reduce Sanchezí base salary to $715,000, give him the remaining $7.535 million in the form of a signing bonus and also fully guarantee and prorate his $500,000 workout bonus. What does this do? It reduces his 2013 cap charge to $6,826,875 while increasing his 2014 cap by $2,008,750. If a miracle happens and Sanchez is the man the added money onto the future cap is no big deal. If he stinks well the dead cap in 2014 rises from $4.8 million to $10,826,250. While that number is difficult it is far better than the $17+ million in 2013 if we release him. It gives us an avenue to actually release Mark in September if he simply canít play and becomes a distraction to the team. I like the idea of helping my team now and dealing with the dead money in 2014, which still represents a savings of his current 2014 cap number of $13.1 million.
Now if the Jets believe there is a trade market for Sanchez I would prorate less of the deal and have him keep around $3 million in salary that transfers to the trade partner. Under that scenario Sanchezí 2013 cap is $8,540,625 and the dead money in 2014 is now $9,112,500. As I type that out that may be more reasonable and a safer play, but that is a decision that the Jets have to make as it pertains to his perceived trade value. I think he is so damaged that a trade may be very difficult, so Idopt for more immediate cap room, but either is acceptable.
2013 Savings: $6.026250 million in Cap and $0 in Cash
2014 Savings: ($2.00875) million in Cap and $0 in Cash
Weíll wrap this all up in part 3Ö.