Giants Get Under the Cap

The Giants were entering the 2013 season with limited salary cap space.  During the offseason only a team’s top 51 salaries, better known as the “Top 51” rule, count on the cap.  When the season begins salaries of the 53-man roster, practice squad, physically unable to perform (PUP) and players on reserve/injured (IR) count on the cap and make up the majority of salary space used.

With the final roster set and the inclusion of salaries which were not on the cap, but now are, the Giants had $3.2 million in space with 67 contracts (53-man roster, 5 IR, 8 practice squad, 1 PUP)  to be accounted for according to NFLPA records.  

At no point in time is an NFL team allowed to go over their salary cap number. This is why teams need to have enough “working capital” to avoid having cap problems due to unexpected costs mostly because of injury.  When a player is injured and moved to the IR his salary goes with him and counts.  Of course that player is replaced on the 53-man roster and the new player’s salary will now count as an additional cost which was not accounted for at the beginning of the season. 

The Giants felt that $3.2 million in cap space would be cutting it close to make it through the year, so they restructured guard Chris Snee and punter Steve Weatherford’s contract to create more cap space heading into the season.

Neither player took a reduction in pay but they did allow the Giants to change their contracts in a manner allowed under NFL salary rules which would provide relief.  In both cases the players base or paragraph five salary, paid week-to-week, over the 17 week season was reduced, Snee by $2.5 million and Weatherford by $900,000.  The Giants converted that money into signing bonus giving each player a check in that amount after signing the restructured deal.  The signing bonus money was then spread out or prorated throughout the player’s contract saving the Giants $1.925 million this year. 

Here’s how it works:

Snee is signed through 2014 so his signing bonus was prorated over two years, 2013 and 2014 counting $1.25 million in each year.  Bonuses are prorated over the life of the contract up to a maximum of five years but portion of the prorated monies fall in the year which the bonus was paid.  So the Giants pushed Snee’s 2014 cap charge up $1.25 million but save that amount this season. 

Weatherford is signed through 2016 so his bonus $900,000 was prorated like this $225,000 added to 2013, 14, 15, 16 caps saving the Giants $675,000 this year as that amount was pushed forward.

This type of restructuring does have a down side, first the player now counts more on future caps lessening space available for those years, second any remaining prorated money will accelerate or be added together on the current years cap if that player gets released.  

The Giants now have about $5.1 million in salary cap room and that should be enough to make it through the season while restructuring of this type are common they do need to be used with the potential downsides in mind.