For months it was estimated that the 2013 NFL salary cap figure would be $121 million. This week, multiple reports have confirmed that the salary cap figure for 2013 will be $123.9 million. (please click on link).
This is good news for teams that were tight in available cap space going into the free agency signing period, including the St. Louis Rams. The additional $3.3 million over the 2012 salary cap (the actual salary cap figure for 2012 was $120.6 million) may not appear to be a significant amount on the surface. However, it could have an impact on signing one of our own free agents (ex. Danny Amendola, Steven Jackson or William Hayes), signing a free agent from another team or restructuring a contract/cutting a player from the Rams current roster.
St. Louis Rams 2013 Individual Cap Hits
|Player||Position||Base Salary||Signing Bonus||Other Bonus||Cap Figure|
|2012 Available Cap Rollover||247,000|
|2013 Total Cap Hits||115,033,835|
Available Salary Cap Space
2013 Salary Cap - 123,900,000
2013 Total Salary Cap Hits - 115,033,835
Available Salary Cap Space - 8,866,165
Terminology And Calculations
Available Salary Cap Space - Is the amount of money the Rams have remaining to spend on player contract obligations without exceeding the salary cap. The calculation to determine the available salary cap space is: The dollar amount of the salary cap, plus the available cap rollover from 2012, less the dollar amount of current active contracts (cap hits), less the dollar amount of "dead money" cap hits.
Dead Money - Is the amount of money that still must be counted as cap hits in the current year for players that are no longer with the team. These amounts consist of guaranteed money/bonuses that were outstanding for 2013 (in some cases beyond 2013). The Rams are in a very good position going forward into 2014 with respect to dead money. 2013 is the last year for any dead money attributable to Jason Smith.
Salary Cap Figure (Hit) - Is any contractual obligation that counts against the salary cap in a particular year. It is the sum of a players base salary, signing and/or other bonuses and any incentives deemed to be earned.
Available Cap Rollover - Is the amount of the preceding years available cap space not used in that year. The amount carried forward by the Rams from 2012 is 247,000. Salary cap provisions allow for the carryforward to be added to cap space for the current year.
The Salary Cap - Is the maximum amount a team can have in total cap hits without incurring penalties imposed by the NFL. These penalties can be financial in nature and/or include the loss of draft picks. A team must be under the maximum before the start of the current season.
Signing vs Other Bonuses - A signing bonus can be defined in its literal sense. The signing bonus can be spread out (for cap purposes) evenly over the life of a contract. Other bonuses include roster, incentive, etc. bonuses that occur in different years of a contract and in varying amounts.
Observations, Implications And Clarifications
1. It had been reported over the past two weeks or so that the Rams were in fact over the salary cap. I had commented and reported that the Rams were 1.1 million over the cap (rounded off). Two major events occurred in the intervening two weeks that brought the Rams available cap space to where it is as of this writing: Steven Jackson is voiding his contract for 2013. This added 7.0 million to the available cap space figure (his 1.899 million bonus had already been accelerated to count as a 2012 cap hit). The announcement of the salary cap for 2013 (123.9 million) was 2.9 million over the estimated amount of 121 million, a figure that had been used for quite some time in calculating available cap space. These two events added 9.9 million to the Rams available cap space; hence the figure of 8.8 million in cap space at present.
2. The Rams currently have 46 players under contract and 19 players eligible for free agency.
3. Practice squad players do not count as cap hits because they are free agents. In the Rams case, all eight of their practice squad players from 2012 were signed to contracts on December 31, 2012. As such, they all count against the salary cap at the present time.
4. None of the 19 players eligible for free agency count against the salary cap at present, for they are not under contract. Only when (or if) any of them are re-signed will their contracts count against the salary cap for 2013.
5. When contemplating how the Rams should spend their available cap space money please bear in mind the following: the Rams will need to begin the coming season with approximately 2 million in cap space as a reserve, in the event of having to sign players to replace anyone sent to the injured reserve list. In addition, the available cap space figure, at present, does not include the amount it will cost to sign the Rams incoming rookie class. The 2012 rookie class cost 6.68 million to sign. A reasonable estimate for 2013 would be 7 million. They (the rookies) are not likely to be replacing many existing contracts on the team, as the Rams only have 46 players under contract (7 short of the 53 man roster).
6. It is commonplace in the TST community to suggest that the Rams restructure bigger contracts to free up cap space. I am a firm believer that this is a poor business practice. It is the chief reason why many teams end up in perilous cap space situations. In addition, it sends the message to prospective free agents from other teams (and the Rams own players) that the Rams organization does not honour their contracts. Kevin Demoff has stated on many occasions that the Rams are committed to the "pay as you go" approach to contracts, one that ensures a minimal amount of dead money counting against the cap. I have included a link to an article published on TST (RVB October 14, 2011) that quotes Kevin Demoff regarding the matter of restructuring contracts.
7. Many on TST have suggested signing various free agents from other teams in addition to re-signing some of our own free agents. Given the current available cap space (and the need to have a reserve/sign our rookie class), for all intents and purposes the Rams are currently at zero with respect to projected available cap space. In order to sign/re-sign free agents, the only other means available (aside from restructuring contracts) for increasing cap space is to cut players currently under contract with the Rams.To give you an idea of the parameters regarding how much cap space can be created, listed here are the contracts of players that would be big enough to be considered prime candidates for cutting: Quintin Mikell (6 mil), Wayne Hunter (4 mil), Harvey Dahl (4 mil),Eugene Sims/Matthew Mulligan (2 mil). The total cap savings if all five of these players are cut is 16 million. It gives you an idea of what it would take (and the decisions that would have to be made) to create enough cap space to sign/re-sign players such as Phil Loadholt, Jake Long, Steven Jackson, William Hayes, Danny Amendola, Jared Cook, Dustin Keller, Andy Levitre etc.
8. Much commentary has been made in regard to Kevin Demoff being the only person who truly knows the Rams cap situation and cap space figure. With regard to planning and cap strategy that assertion would be correct. It is not correct with respect to available cap space figures. Every financial transaction that affects the salary cap must be reported to the league office and the NFLPA as it occurs. It then becomes public knowledge. There is a time lag between the transaction actually occurring and it being made public knowledge, so we never get to hear or read about it in real-time. However, we do find out about these transactions in a timely manner. There are no "secrets".
Eric Nagel, one of the great writers here on TST, asked me to keep the TST community updated on the cap situation on a regular basis through these posts. I appreciate his support and the faith he has in me to do this on an ongoing basis. Thanks Eric!March 6 Update - The Rams have released Wayne Hunter, adding 4 million to the available cap space total earlier in this post.
Sources: Rotoworld, Spotrac, NFL.com