Understanding 2014 Post June 1st Cuts

March 12th, 2014 by Michael Ginnitti

USATSI_7644005_160074578_lowresUSA Today Sports – Matthew Emmons
 
One of the more complex phrases prevalently used this time of year is the Post June 1st release. I’ll do my best to explain this in layman’s terms as it most often applies to a player.

Real Example:
The Cowboys recently released WR Miles Austin, designated him a Post June 1st Release. He carries $7,855,600 in total dead cap right now, $2,749,400 of which is allocated to the 2014 cap, $5,106,200 if which will accelerate to the Cowboys’ 2015 cap.

The first thing to note is that Austin is being released on March 12th, and being designated a June 1st release. Per the rules of the CBA each team has the option to designate two players per year in this manner. The catch here is that Austin’s current contract must stay completely active on the Cowboys’ books until June 2nd. This means his original $8,249,400 cap figure will remain on the Cowboys salary cap until this time.

One June 2nd, all Post June 1st Designations are properly allocated in this manner:

  • Any bonus money allocated to the current year (2014) + any guaranteed salary throughout the remainder of the contract turns into 2014 dead money. In the case of Austin this includes the $2,749,400 in restructure bonuses.
  • Any bonus money allocated to the remaining years of the deal (2015+) are accelerated into 2015 dead money. In the case of Austin this means $5,106,200.

 

Currently Designated June 1st Releases

Player Team Pos. 2014 Cap 2014 Dead Money 2015 Dead Money
Miles Austin DAL WR $8,249,400 $2,749,400 $5,106,200
Thomas DeCoud ATL S $4,800,000 $600,000 $1,200,000
LaMarr Woodley PIT LB $13,590,000 $5,590,000 $8,580,000
Carlos Rogers SF CB $8,094,531 $1,494,531 $1,494,531
David Baas NYG C $8,225,000 $3,225,000 $3,225,000
Daryn Colledge ARI G $4550000 $2,275,000 $2,275,000

 

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9 Responses to “Understanding 2014 Post June 1st Cuts”

  1. Cowboy7832 says:

    The main question ppl are asking is why would a team designate a player post june 1st cut instead of just waiting untill june 2nd and cut him.

    The answer is because it keeps them out of ota/practices and keeps that player from getting offseason bonuses for participating in these things with this team.

  2. ngo says:

    The question he is asking is this: what benefit does the team have by announcing the cut early as a June 1st cut rather than just waiting until June 1st? The period between the early cut and June 1st appears to help the player and not the team.

  3. ola says:

    You are not “declaring” the FA will be ready and available to be on the market on June 2nd. You are CUTTING the guy on the date March 12th or whenever before June 1st. The team is letting this guy go so he can move on with another team, usually because of a combination of skills declining and a bloated contract that is hurting the team against the current cap, it was based on his past performance and potential to keep that performance up. Any combination of factors it was a big and bad contract the team wishes to be rid of and the player can go on and be a part of another team, but the money involved is so large that the team will get very little relief on the cap and they can see in the next year’s cap they will have a balloon of cap space due to expiring contracts of others or past dead money coming to an end, OR this new TV contract that spikes up the cap amount as the amount of income of the league goes up billions it gives millions more cap room to each team in turn.

    The team can then cut the guy let him be on the way, get cap relief after June 1st but have that space be more significant than if he were a straight cut. They can then rollover that space savings into next year, again a year that the cap for them will be better and the second half of the payers dead money will hit. Mostly spreading the dead money is for benefit of the team to make space in the current year for re-signings/rookies coming in, post-June 1st FA/camp bodies, veteran FA cuts in camp, etc that the team can take advantage of with the better cap space again more than if they straight cut the player w/o designated him a June 1st cut.

    The advantage is almost always a team that is cap-strapped in the current year and wanted more money in the year so they can do a little more in player dealings and then have the remainder in the next year so that the cap can absorb it better when it is more able to do so.

  4. Jeffrey Taylor says:

    Explain the term dead money.

    • Lance says:

      Hi Jeff:

      “Dead money” is a term used to designate money in the cap that counts against a player who is no longer with the team. To understand better, it is important to know how the cap works in the NFL.

      In most basic terms, there are two types of salary: guaranteed money, and salary. Let’s imagine a fake player (Player A) who signs a 4 year deal. It has a $4 million signing bonus, and then salaries of $1 million (year 1), $2 million (year 2), $3 million (year 3), and $4 million (year 4).

      The total value of the contract is $14 million (4 (signing) + 1 + 2 + 3 + 4 = 14). However, he gets that signing bonus the day he signs the contract. So in year 1 of the deal, he’s getting $5 million– 4 for the bonus, and 1 for the salary. In year 2 of the deal, interestingly, he’s just getting $2 million– just salary. And so on.

      That’s real life. But for the salary cap, they do things differently, and spread the cost of the signing bonus over the length of the contract. In this case, $1 million a year ($4 signing /4 years = $1 million a year). So Player A’s CAP HIT for year 1 is $2 million– the $1 million salary, and the prorated cost of his bonus– also $1 million.

      Got it?

      So now, “dead money”. Let’s say that after year 2, the coaches decide that Play A is no good– or not worth the money, anyhow. And so then, they cut him. IN real terms, this just means they stop paying him money. But in CAP terms, it is a different story. This is because that signing bonus was prorated over 4 years, and they have 2 years left.

      In this situation, that prorated amount is accelerated to the year of the cut– so that $1 million for year 3 and $1 million for year 4 counts now as $2 million in year 3 against the cap– EVEN THOUGH THE PLAYER ISN’T WITH THE TEAM. Hence, “dead money”. The special “June 1st” thing is a special way negotiated where a team can cut a player but still spread out (somewhat) the effects of the cap hit that comes with that dead money.

      Complex stuff, but I hope this helped you understand…

  5. Derek says:

    Question,

    To what advantage is it for a team to designate in advance of June 1, particularly this early, that a player will be a post June 1 cut if there is no advantage as far as cap availability “now”. It seems it would be a disadvantage to the team by allowing other teams know in advance that a potential add will be available and to “set aside” some cap money for the purpose of pursuing said individual.

    • Steve says:

      Designating and releasing the player early benefits the player, because it allows him an opportunity to sign with another team. It is a move that helps both sides, the player and the team.

      • Derek Paret says:

        I can see how it would benefit the player, but not how it would benefit the team to announce it early.

        • dan says:

          The benefit to the team is that the cap hit of releasing the player is spread out over two years, rather than 1. So looking at LaMarr Woodley, rather than having a single cap hit of $13,590,000 for 2014, now he’ll have a $5,590,000 cap hit for 2014, and a $8,580,000 for 2015. This helps a team that’s really hurting for cap space, such as the Steelers and Cowboys by giving them a little more breathing room for the current year.

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