Expiring CBA could impact free agent market this spring

Looking forward into the 2020 season, the Seattle Seahawks are sitting in a relatively healthy salary cap position. They have their core leaders, Russell Wilson and Bobby Wagner, along with other key members of the team, such as Quandre Diggs and Tyler Lockett, under contract, while also projected to have about $60M in cap space, before making any cap cuts.

That $60M number seems likely to increase before the actual start of free agency in March, as there are a handful of players under contract for 2020 who could be released. Namely, Justin Britt and Ed Dickson, who are both on injured reserve, could be released to save a combined $11.75M in cap space. For both Britt and Dickson, 2020 would be the final year of their contract, so the expiring CBA would not impact their release at all. However, for teams that decide to move on from a player who is under contract past the 2020 season, the fact that there is no agreement in place beyond 2020 could complicate matters for the team’s cap.

Specifically, as Joel Corry lays out, with no agreement currently existing that covers the 2021 season, teams will not be able to defer dead money using a post-June 1 designation.

What that means is that a team, such as the Jacksonville Jaguars, which is currently projected to be over the cap for next season and needs to cut players or renegotiate contracts to come into compliance, could be somewhat hamstrung.

Typically, teams can release players with a a post-June 1 designation, a designation which pushes all but the current year’s worth of dead money onto the salary cap of the subsequent season. Hypothetically, purely as an example, say Duane Brown decides he wants to retire after this year, so the Seahawks agree to release him in order to prevent any dispute about any possible recoup of the remaining signing bonus from his 2018 extension. Normally, in such a situation, the team would have two options. The first is to release Brown and take the full amount of dead money, $4M, in the current season. The second option would be to release Brown with a post-June 1 designation, recognize the 2020 dead money portion in 2020, $2M, with all remaining dead money, the other $2M, going against the cap in 2021.

However, because there is no CBA in place that covers the 2021 season, there is currently no salary cap in place to absorb that dead money moving forward, and as such there is no option to push dead money into the 2021 season. Now, I don’t expect Brown to retire. It’s certainly a possibility, but not one I anticipate. That said, he’s one of the few Seahawks available to use in such an example because he’s one of the handful of Seahawks who is signed for multiple seasons beyond 2020, so please don’t take this as any kind of prediction that he will walk away after this year.

If this is unlikely to affect the Seahawks because they have very few players signed through 2021 or beyond, what is the big deal? Well, the impact on the Seahawks could be through the impact seen to other teams. Every offseason in February and early March, teams begin to release players as cap casualties, with many of these players being designated as post-June 1 releases. This, obviously, allows the prior team to have money to play in free agency and look to replace their prior expensive mistake with a new, expensive potential mistake.

However, if teams are unable to move push dead money forward, there could be a reduction in the number of players waived with a post-June 1 designation. That’s not huge, but it would have a secondary effect in that teams would have less cap space available in free agency. Before anybody gets excited, however, that teams being tight on cap space could impact the free agent market and keep player salaries suppressed, let me just go ahead and nip that in the bud right here and now. Teams are currently projected to collectively have well north of $1.5B available cap space next season, and that’s before releasing any players for cap reasons.

How it will impact teams, however, is that all teams will need to have a little bit larger salary cap reserve in season during 2020 than they normally would. The reason why is that typically, when a team releases or trades a player after June 1, any dead money automatically gets charged to the team’s salary cap in the subsequent season. So, for example, the Detroit Lions traded Quandre Diggs this year, and will recognize his $3,583,334 in dead money against the cap in 2020. However, if that trade had taken place next year, the Lions would have had to recognize that full $3,583,334 against the cap this season.

That becomes important on roster cuts day at the end of training camp. While teams will occasionally cut expensive players at the roster cuts deadline, the majority of players released at the end of camp are younger players and draft picks. That is important because the signing bonuses for Day 3 draft picks, while not large, are also not always small.

As a fourth round pick, Phil Haynes, for example, received a $691k signing bonus. Had the team waived him at the end of training camp this season, they would have taken a $172k dead money hit in 2019, with the remaining $518k coming in 2020. However, without the ability to push this dead money out, in 2020 a team cutting a fourth round pick will have to eat roughly $700k in dead money. By no means is that a huge amount, but if a team somehow were to miss on all four of its Day 3 selections, it could be looking at a couple of million in dead money against the cap next season. Again, this is not the end of the world for most teams, but for teams like the Jaguars, Minnesota Vikings and Atlanta Falcons which are all projected to be over the cap, it could prove to be a bit of a pain.