Understanding Dolphins Dead Money

[So Be]

Some posters are confused on how dead money works and the team getting the use of it back. Here's a simple explanation.

Most dead money comes from a signing bonus. If a player gets a $5M bonus for a 5 year deal, teams can split the hit over the term of the contract at $1M per year. If a player is cut or traded after 2 years, the contract is over, and they take the hit on the last 3 years all at once.

They then get that cap space back the following year.

 

[dolpns13]

Damn that's an awesome explanation. . Jk

 

[So Be]

Damn that's an awesome explanation. . Jk

Hit send by mistake. Corrected it. :)

 

[Kdawg954]

Some posters are confused on how dead money works and the team getting the use of it back. Here's a simple explanation.

Most dead money comes from a signing bonus. If a player gets a $5M bonus for a 5 year deal, teams can split the hit over the term of the contract at $1M per year. If a player is cut or traded after 2 years, the contract is over, and they take the hit on the last 3 years all at once.

They then get that cap space back the following year.

Except for June 1st cuts . . . which would give savings in 2015, but that savings would be enforced on the 2016 cap. Essentially, June 1st cuts are great for ensuring you have enough cap to sign your draft class and pick up whatever 2nd hand free agents from June until the season starts.

 

[AL R]

One thing for sure these contracts are becoming all about the guaranteed money. It's getting to the point that most if not all players don't see the end of a contart they sign.

 

[Kdawg954]

One thing for sure these contracts are becoming all about the guaranteed money. It's getting to the point that most if not all players don't see the end of a contart they sign.

Which is why Mike Wallace is in a VERY winning position in 2015. Him and his agent have no reason to take a paycut . . . it's just business. If Miami cuts him, he knows he can get on with another team, probably not get $10 million a season, but can get $7 or $8 million and get another ****load of guaranteed money.

Next year, that changes a bit, as Miami is in a better position to cut him and Wallace needs to show that he is deserving of another big payday.

 

[So Be]

Except for June 1st cuts . . . which would give savings in 2015, but that savings would be enforced on the 2016 cap. Essentially, June 1st cuts are great for ensuring you have enough cap to sign your draft class and pick up whatever 2nd hand free agents from June until the season starts.

Yeah, that and also having some space for injury replacements. I'm thinking that we need $3M for the draft, and would like to have another $7M or so for late cuts and insurance.

 

[AL R]

True, he holds all the cards at this time unfortunately. It's a little ironic it was reported they approached Wallace about a pay cut when they knew that answer already, or should have, but not Hartline about one and he was open to one supposedly. It speaks volumes about what they really thought about Hartline.

 

[So Be]

One thing for sure these contracts are becoming all about the guaranteed money. It's getting to the point that most if not all players don't see the end of a contart they sign.

Agreed. Some posters are confused on how we get the cap space back. It's just taking future guaranteed money to be paid over time on the cap, and taking the hit all at once. Then you get to spend the space again.

 

[Kdawg954]

True, he holds all the cards at this time unfortunately. It's a little ironic it was reported they approached Wallace about a pay cut when they knew that answer already, or should have, but not Hartline about one and he was open to one supposedly. It speaks volumes about what they really thought about Hartline.

It made much more sense for Hartline and I'm sure he would of taken one. He and Drew had to know that he wasn't a $7.4 million receiver. I think they saw the 4.2 in dead space if cut and played hardball . . . . and lost . . . if they were even approached by the team to take a paycut . . . which is hard to believe they didn't considering the QB does vouch for Brian.

Wallace is gambling that the 9.6 million "dead space" figure is too much to overcome to just be cut outright, and like I said, even if Miami is crazy enough to cut him at that number, he'll find another team, get another nice pay day and be good with that.

He's in the winning position right now.

 

[So Be]

It made much more sense for Hartline and I'm sure he would of taken one. He and Drew had to know that he wasn't a $7.4 million receiver. I think they saw the 4.2 in dead space if cut and played hardball . . . . and lost . . . if they were even approached by the team to take a paycut . . . which is hard to believe they didn't considering the QB does vouch for Brian.

Wallace is gambling that the 9.6 million "dead space" figure is too much to overcome to just be cut outright, and like I said, even if Miami is crazy enough to cut him at that number, he'll find another team, get another nice pay day and be good with that.

He's in the winning position right now.

I go back to my 2 year thinking on cap space cuts. Sure, we would much prefer to not take a $9M hit this year but, we get that back next year. It would not affect any signing of new players but, will affect having space on one year deals.

I would look more to his fit and play over the cap hit.

 

[Kdawg954]

I go back to my 2 year thinking on cap space cuts. Sure, we would much prefer to not take a $9M hit this year but, we get that back next year. It would not affect any signing of new players but, will affect having space on one year deals.

I would look more to his fit and play over the cap hit.

Of course it effects the signing of new players. You sign Cobb to a 5 year, $50 million deal. You are more than likely take a $10 million cap hit this year in addition to the next 4 years. Plus you have to deal with Mike Wallace's $9 million this year. Yes, you won't have to deal with Mike Wallace's anymore next year . . . . . but I'm worried about 2015. And Miami needs to worry about 2015 also as they have a QB going into his 4th year and you need to make sure you give him stuff to work with and seeing all this dead cap space means there is less to work with in 2015.

 

[So Be]

Of course it effects the signing of new players. You sign Cobb to a 5 year, $50 million deal. You are more than likely take a $10 million cap hit this year in addition to the next 4 years. Plus you have to deal with Mike Wallace's $9 million this year. Yes, you won't have to deal with Mike Wallace's anymore next year . . . . . but I'm worried about 2015. And Miami needs to worry about 2015 also as they have a QB going into his 4th year and you need to make sure you give him stuff to work with and seeing all this dead cap space means there is less to work with in 2015.

I cannot recall any player, on a long term deal, getting his average in the first year. They normally range between 25 and 50% of the average. Just look at Wallace, Albert, and Wake costing a combined $10M the first year. Players don't care if they get the money this year or next. They believe Ross and the NFL are good for it. :)

 

[JTC111]

Some posters are confused on how dead money works and the team getting the use of it back. Here's a simple explanation.

Most dead money comes from a signing bonus. If a player gets a $5M bonus for a 5 year deal, teams can split the hit over the term of the contract at $1M per year. If a player is cut or traded after 2 years, the contract is over, and they take the hit on the last 3 years all at once.

They then get that cap space back the following year.

Just to be clear because there was some confusion on this issue in another thread, teams get the cap space back that was being taken up by the dead money in the previous year; they don't get additional cap space on top of what the league allows. For example, if the cap is $140 million and we have $5 million in dead money, our working cap for that season is really only $135 million. When the season is over, that $5 million in dead money no longer affects our cap.

 

[So Be]

Just to be clear because there was some confusion on this issue in another thread, teams get the cap space back that was being taken up by the dead money in the previous year; they don't get additional cap space on top of what the league allows. For example, if the cap is $140 million and we have $5 million in dead money, our working cap for that season is really only $135 million. When the season is over, that $5 million in dead money no longer affects our cap.

Absolutely correct.