While sports leagues across the country suspending or cancelling the games scheduled for the immediate future, the NFL offseason is, so far, continuing to proceed as scheduled. As of writing the league has yet to make any modifications to the schedule surrounding the start of the new league year and free agency. However, with as rapidly as things have changed in recent days, there is no guarantee that things will proceed as scheduled.
That said, Thursday reports emerged that the Seattle Seahawks were bringing in free agent tight end Jordan Reed, formerly of the Washington Redskins, for a visit. Reed has shown the ability to be a dangerous threat in the passing game, however, a long history of concussions has prevented him from demonstrating his full potential.
The ethical debate regarding whether a player with such a history of head injuries is no doubt up for debate. However, what is not up for debate is how Reed’s injury history could allow the Hawks, or any other team to keep Reed’s 2020 cap hit low. To understand what could make adding Reed as a potential receiving threat so attractive, it is necessary to turn to the CBA and how incentives are accounted for in a team’s salary cap situation during the offseason.
Specifically, when an NFL team rosters a player with a lengthy injury history such as that of Reed, the team will commonly use per game roster bonuses to reduce the financial risk surrounding signing the players. The Seahawks have done this in the past with multiple players, including Ziggy Ansah, D.J. Fluker, Mychal Kendricks and K.J. Wright just this past season. By signing these players to contracts with large per game roster bonuses, to determine the cap hit for such a player, the CBA calls for the per game bonuses to be categorized as either likely to be earned (LTBE) or not likely to be earned (NLTBE).
The difference between the two is whether a player hit the bonus threshold in the prior season, and how they are accounted for. So, for example, during the 2019 season Fluker had the potential to earn up to $1M in per game active roster bonuses at $62,500 per game for which he was active. Over the course of the season he was active for 14 of 16 games, and his contract carries the exact same $1M in per game bonuses for 2020.
Thus, for cap purposes for the upscoming season, his cap hit would typically be calculated based on 14 per game bonuses as LTBE which would count against the cap and 2 per game bonuses which would be categorized as NLTBE and would not count against the cap. If Fluker appeared in fewer than 14 games, at the end of the season the Hawks would receive a salary cap credit of $62,500 per game under 14 games for which Fluker was active. The formula, for those math nerds out there would be:
2021 salary cap credit = (14 - 2020 Games Active) X $62,500
Now, that is what would typically happen in a normal season if Fluker appeared in fewer than fourteen games. In contrast, if he appeared in exactly 14 games, there would be no salary cap adjustment. Lastly, if he played in more than 14 games, as soon as he was active for a 15th or 16th game, the Hawks would immediately recognize a $62,500 cap charge.
As noted, however, as of right now 2020 is not set to be a normal season for cap purposes. Specifically, because 2020 is the last year of the 2011 CBA, special cap rules are in place. One of those cap rules is that all bonuses are categorized as LTBE and will count in full against the cap until such time as they become NLTBE. Referring back to the Fluker example from above, for 2020, instead of 14 per game roster bonuses counting against the cap, all 16 would count against the cap to open the season. Then, as the season goes along, if Fluker were to miss a game, the Seahawks would then immediately receive a $62,500 credit against the salary cap.
This applies to all teams and all players for the 2020 season, unless the players approve the proposed CBA. If the proposed CBA is approved, then the rules revert back to the normal prior season lookback methodology for 2020. That means the players vote for the proposed CBA, which is currently set to end Saturday at midnight, is important for multiple reasons.
First, it’s obviously important because if teams have to recognize all incentives as LTBE, it eats up a not insignificant portion of the salary cap across the league for 2020, reducing the cap space available to free agents set to hit the market next Wednesday. In addition, knowing which set of cap calculations are in effect for the 2020 season will be crucial to teams looking to sign a player like Jordan Reed.
Reed, who spent the entire 2019 season on IR played in zero games. Thus, if the old rules are in effect, a team such as Seattle could sign him to a contract that carries a $1M base salary, with $2M in per gameday 48 active roster bonuses, with an additional $2M in gameday 55 man roster bonuses. (Author’s note: 48 and 55 are used rather than 46 and 53 because the only way the old rules will be used are if the proposed CBA is adopted, and if it is adopted roster expansion will result in 48 gameday actives of the 55 players on the roster.) This is the structure of contract the Seahawks used with Kendricks in 2019, and a team carrying Reed into 2020 would recognize only the $1M base salary during the offseason.
In short, that’s why Reed could be such an attractive option for teams willing to take a risk on his health this offseason. Any team willing to take the risk associated with his injury history is likely to make the contract incentive laden, but how those incentives will be accounted for cap wise won’t be known until the outcome of the NFLPA’s vote on the proposed CBA is announced. That makes any announcement on Friday unlikely, with voting not set to close until midnight Saturday.
However, the start of free agency Wednesday at 4:00 New York Time also marks the deadline for restricted free agent tenders. That means reaching agreement with Reed prior to the opening of free agency could allow the Hawks to replace Jacob Hollister at an offseason carrying cost below that of even the lowest RFA tender. That situation gives the Hawks leverage with both Reed and Hollister, as well as any other tight ends they might be speaking to including Luke Willson. In short, while there won’t likely be any announcements today regarding a contract for Reed, don’t be surprised if something is reported next week because deadlines spur deals.