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Salary Re-Capping: The Post-June 1 Designation And Quintin Mikell

USA TODAY Sports

On June 2, 2013 10 NFL teams will be gaining cap space for 2013 by means of an NFL rule known as the "post-June 1 designation"(please click on link). These ten teams released a total of 11 players with a post-June 1 designation. This designation relates to releasing a player before June 1, dead money, and the acceleration of pro-rated bonus money as a cap hit against the current years salary cap. The Rams were not among the ten teams that used the designation on a player, although they likely gave it consideration when Quintin Mikell was released.

The Rams released Quintin Mikell on March 11, 2013. His release was timed to coincide with the opening of the free agency signing period, and was done to create much needed cap space. The cap space created was instrumental in allowing the Rams to sign both Jake Long and Jared Cook early in the free agency signing period. The accompanying chart presents Mikell's entire contract as it stood at the time of his release:

Year Base Salary Signing Bonus Option Bonus Cap Hit
2011 1,000,000 1,000,000 2,000,000 4,000,000
2012 1,000,000 1,000,000 2,000,000 4,000,000
2013 6,000,000 1,000,000 2,000,000 9,000,000
2014 7,000,000 1,000,000 2,000,000 10,000,000

In my March 11, 2013 cap space article I detailed the effects of Mikell's release on the Rams salary cap position: (please click on link)

As noted, Quintin Mikell will be cut by the Rams today. The salary cap savings will be 3 million for 2013. Many will wonder why there is only a 3 million cap saving when Mikell had a 9 million cap hit for 2013. The reason for this is the way his contract was structured by the previous regime, when he was signed in 2011. The contract included a signing bonus of 4 million and an option bonus of 8 million. The Rams chose to spread each of these bonuses out equally over the life of the contract. In addition, the Rams back-loaded his salary to the 2013 and 2014 years
Cutting Mikell notionally removed the 9 million cap hit for 2013. However, the 3 million in bonuses for 2013 still count against the cap for 2013 as dead money. In addition, because he was cut before June 1, the 3 million in bonuses for 2014 are accelerated to count against the cap for 2013 as dead money. The net effect of cutting Mikell is a 3 million cap saving for 2013 and a 10 million cap saving for 2014. This contract illustrates the perils of back-loading a contract and spreading out bonuses over the length of a contract. Quinton Mikell's signing and contract is a fine illustration of how the business practices of the prior regime pale in comparison to those of the current front office.

The Rams had a decision to make regarding how they would treat Mikell's release for cap purposes. The league allows each team to designate up to two players per year as a June 1 cut, even though the player has been released well before June 1. Designating Mikell as a June 1 cut would have allowed the Rams to spread out his remaining bonuses/dead money evenly across 2013 and 2014 (3 million each year) instead of taking all 6 million in dead money as a cap hit in 2013. The Rams chose to take the entire 6 million as a cap hit for 2013 and not use the designation.

Given their tight cap space situation at the time, why did the Rams elect to forgo using the designation on Mikell? The answer lies in how the June 1 designation mechanism works. When you designate a player as a June 1 cut he remains on the roster and his current contract remains on the books (in its entirety) as a cap hit until June 1. The salary part of the contract does not come off the books until June 2, nor is the player officially released until that time.

The accompanying chart breaks down the various scenarios:

Year Signing Bonus Option Bonus Salary Saved Cap Hit
Actual
2013 2,000,000 4,000,000 -6,000,000 6,000,000
2014 -7,000,000
June 1 Designation
2013 1,000,000 2,000,000 -6,000,000 3,000,000
2014 1,000,000 2,000,000 -7,000,000 3,000,000
2013 Cap Hit Until June 1
2013 1,000,000 2,000,000 6,000,000 9,000,000

The first part of the chart breaks down what the Rams actually did with Mikell's release. His initial 2013 cap hit of 9 million was reduced to 6 million (a 3 million savings). The dead money for both 2013 and 2014 counted as a cap hit for 2013.

The second part of the chart suggests what would have happened to the Rams cap space after June 1 if the Rams had applied the June 1 designation to Mikell's release. The Rams would have saved 6 million in cap space this year, as the 2014 dead money (3 million) would have only counted against the cap in 2014.

The last part of the chart breaks down what the cap savings would have been to the Rams before June 1 by using the designation on Mikell. Until June 1 the cap savings would have been zero.

The Rams handled the release of Quintin Mikell the way they did because it allowed them to be in a far better cap position during the early part of the free agency signing period. Again, this helped facilitate the signings of Jared Cook and Jake Long. As an added bonus, the Rams should have little trouble staying under the cap in 2013, precluding the need to have created the additional 3 million in cap space the designation would have allowed. In addition, it means 3 million less in dead money counting against the cap for 2014. Another masterful job done by the Rams front office!

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