Russell Street Report Salary Cap The Ramifications of Cutdown Days

COUNTDOWN TO WEEK 1

Key Dates, Deadlines and Salary Cap Ramifications of Cutting Down to 53

As Training Camp progresses and September approaches, several key NFL calendar dates become important and have great significance for the building of the team’s roster and for its Salary Cap.

OVERVIEW

Several key factors are already in effect and have already come into play.

Rule of 51

At this time of the offseason, a team’s Salary Cap is determined by the “Rule of 51”. The Rule of 51 is in effect because team rosters now total 90 players (or more if some players are on Injured Reserve) and it would be impossible to fit all 90+ players under the Cap. As such, the league’s CBA dictates that only the highest 51 Salary Cap numbers (and all bonus prorations for players outside of the top 51 and all dead money from players released) counts against the Cap at this time. This is the Rule of 51. The Salary Cap table illustrates how the Rule of 51 operates.

Waivers

As Training Camp and the Preseason progresses, teams will make adjustments to their rosters. While often used interchangeably, there is actually a distinction between “releasing” a player and “waiving” a player. Players with 4 or more years of service time (known as “vested veterans”) are released and immediately become free agents. Players with less than 4 years of service time in the league (known as “non-vested veterans”) are “waived” and subject to a 24-hour waiver period. Teams must make waiver claims for such players and the player is awarded to the team with the highest waiver priority (presently based on draft order; based on team records after week 3 of season). If a player goes unclaimed on waivers, he becomes a free agent.

Injured Reserve/Injury Waivers

An injured vested veteran can be immediately place in Injured Reserve (IR) and does not need to pass through injury waivers. On the other hand, at this point of the offseason, a non-vested veteran must first be “waived-injured” and if he pass through waivers unclaimed, he can then be placed on IR. Injury waivers ends with the first cutdown date (September 1st), so teams, wary of another team poaching an injured player, many wait until the first cutdown date to place non-vested veterans on IR. This fear of poaching is likely the reason that the Ravens have yet to place valued non-vested veterans like DE Brent Urban and S Matt Elam on IR at this point. For a more detailed explanation of the Waiver rules, see here.

Once the player is on IR, he does not count against the 90 man roster limit and a new player can be signed to take his place.

Split Contracts

Most undrafted free agents (UDFAs) and lower round draft picks have split contract, which means if they end up on a reserve list (IR or PUP), they will receive a lesser base salary. Some veterans (vested or not) on 1–year deals may also have split contracts. This has presently come into play with two players the Ravens have already place on IR (CB Julian Wilson and WR Cam Worthy). When TE Allen Reisner is played on IR, his base salary will drop from $660K to $388K.

IMPORTANT DATES

WORKOUT BONUS CHARGES

The CBA dictates that players are entitled to receive pay for attending team organized offseason workouts. For 2015, this amount is $195 per workout. Some veteran players have negotiated for additional workout bonuses to be included in their contracts. The CBA further dictates that from the beginning of the league year in March until Training Camp begins, the team’s Salary Cap is charged with the maximum amount of possible offseason workout bonuses. For 2015, this amount was $561,600. Once training camp begins, that amount is removed and the actual amount of workout bonuses earned is applied to the team’s Cap. This has already occurred and the team had a total workout bonus charge of $288,419.

DOWN TO 75

The 1st cutdown date is set for 4:00 p.m. on the Tuesday after the team’s 3rd preseason game. This year that date is Tuesday, September 1st. At that time, the team must remove 15 players from its active roster. This is largely accomplished by cutting players. Teams can also remove players by placing them on IR (injury waivers no longer apply) and/or moving players from Active/PUP to Reserve/PUP, meaning that the player is out for at least the first 6 games of the season.

DOWN TO 53

The 2nd cutdown date is 4:00 p.m. on the Saturday after the team’s final preseason game. This year that date is Saturday, September 5th. This is when, if not already activated, the team will have to decide on the PUP status of TE Dennis Pitta and S Terrence Brooks. If they are not ready to be added to the 53-man active roster, they will then likely be moved to Reserve/PUP list. The team will also cut players and place players on IR to get down to 53.

ESTABLISHING PRACTICE SQUAD

At Noon on Sunday, September 6th, the waiver period for players released in the final cutdown expires. At 1:00 p.m. that day, teams may begin signing players to their practice squads. Teams’ practice squads may consist of 10 players. The minimum salary for a practice squad player in 2015 is $6,600 per week (or $112,200 if on the PS for entire season). This year, the NFL has removed its prohibition on guaranteeing money or giving signing bonuses to potential PS players. This could mean that teams will now compete for PS players, as opposed to past gentlemen’s agreement to not poach another team’s PS players. Here is a link to the practice squad eligibility rules.

IR-DTR

Also after 4:00 p.m. on the Tuesday following the final cutdown (September 8th this year), teams may designate one player to be place on Injured Reserve, but with a designation to return (IR-DTR). This player must be on the team’s 53-man active roster after the prior day’s cut down to 53. Any player placed on IR-DTR, whether designated on September 6th or at some point later in the season, must sit out of practice for 6 weeks and is then allowed to practice for at least 2 weeks before being activated. The player cannot be activated before having sat out for at least 8 weeks. This may be an option for either S Matt Elam or DE Brent Urban, if the team’s medical staff feels that one of them can return at some point during the season. Otherwise, the team may decide that they would be better off holding that IR-DTR designation open to possibly be used on another player who is injured later in the season.

CAP COMPLIANCE – END OF RULE OF 51

At 12:00 a.m. on the Thursday before the first regular season game (Sept 10th this year), the Rule of 51 expires and teams must have all players – 53-man roster, IR, PUP, IR-DTR, PS – fit under the Cap.

The Ravens presently are $8,229,832 under the Salary Cap. As of now, if there are no other IR additions (fingers crossed), the team would have to count 53 players on the active roster + 3 on IR (Wilson, Worthy, Reisner) + 2 on PUP (Pitta, Brooks) + 10 PS players (total of at least $1,122,000) under the Cap. So, that’s 68 players who would count against the Cap. This is why the present $8M+ in Cap space will likely be reduced to around $5M in surplus Cap space at the beginning of the season.

This, though, is dependent on who makes the final roster. A surprise cut of a higher salaried player (who is currently among the top 51 salaries on the team) who would be replaced by a lesser salaried player (who may not presently even count against the top 51) will help create more of a surplus.

OTHER MISCELLANEOUS FACTORS

GUARANTEED SALARY FOR VESTED VETERANS

Any vested veteran (at least 4 years of service time) who is on the team’s 53-man roster for the first game of the season is entitled to termination pay (if he’s never received termination pay before), which means that his base salary is essentially guaranteed for the year. This is why you will see teams releasing marginal veteran players prior to week 1 and then immediately re-signing them early the following week. There is also an in-season termination pay that applies to vested veterans signed during the season, which essentially guarantees the player 25% of the salary they would have received if not for being released (again, if they haven’t already received termination pay).

INJURY SETTLEMENTS

Teams can work out injury settlements for players who have been placed on IR, but who aren’t expected to be injured for the entire season. This allows the team to save some cash (and Salary Cap space) and allows the player the opportunity to try and catch on with another team later in the season, as opposed to remaining on IR for the entire year. The amount of an injury settlement is based on the number of weeks the player is expected to be unable to practice or play.

Teams may also release a player from IR later in the season when the player has been deemed medically fit to return to playing (i.e. he must be able to pass a physical). This is essentially the same as an injury settlement as the player has already been paid while on IR, but again, saves the team some cash and Cap and frees the player to try and find a job on another team’s active roster or PS.

IN SEASON WAIVERS

Prior to the trade deadline, waivers applies as explained above and vested veterans and non-vested veterans are still treated as they have been since March. After the trade deadline on November 3rd, though, all players – whether vested or non-vested – are subject to waivers. This presumably gives all teams an equal shot at obtaining the player via the waiver system and protects the competitive balance aspect of the waiver system (i.e. giving lesser teams an opportunity to obtain talent).