Kansas City Chiefs Mock Offseason Part 1: Cap Space Creation
Kansas City Chiefs general manager Brett Veach is going to have an unusually difficult job to do this offseason.
The 2021 salary cap will be no lower than $180 million for the upcoming season and could land a bit higher than that. Regardless of the final number, it seems all but certain that there will be a significant drop from 2020's $198.2 million cap.
Even considering the fact that Chiefs are carrying over $5 million in salary cap space from 2020, the current range of outcomes for next season means the Chiefs are at least $18 million over the cap entering the offseason.
With a long list of pending free agents, no salary cap space, and a roster that needs retooling, this offseason is daunting for Veach and Co. However, it's not as insurmountable as it seems.
Over the next few weeks, I will be doing a deep dive into a mock offseason that shows how the Chiefs can navigate the salary cap and retool the roster for another Super Bowl run. Obviously, this mock offseason will not predict how the Chiefs' offseason will go exactly, but it is a good thought experiment to fully realize what the Chiefs are facing. This week's focus will be on the first thing the Chiefs will need to accomplish: create some salary cap space.
If you have not already read my series about NFL contracts from last offseason, it is a necessary primer for this article and future mock offseason articles and it can be read here.
The Top 51
Before getting into the fun stuff, there is one roster rule that needs highlighting: The Top 51 contracts rule.
When the salary cap was established, the NFL realized it was not feasible for NFL teams to stay under the salary cap in the offseason. This was mainly due to NFL teams signing training camp bodies and speculative depth players up to the maximum of 90 players teams are allowed to sign in the offseason. A rule was needed.
This is why teams operate under the Top 51 rule in the offseason, where only the top 51 contracts on a team’s roster count towards their salary cap. This has a whole host of implications.
First, if a team is under 51 players on a contract, then their current salary cap space is not truthful. To get a better idea of what the team's salary cap would look like, take the number of roster spots left until the team reaches 51 contracts and multiply that by the minimum base salary (for this year, the minimum base salary is $660k).
For example, Tampa Bay only has 45 players under contract currently. That means their current salary cap space of $18.5 million would go down to $14.54 million, shown by $18.5 million - ($660k * 6). Tampa's cap space can go lower, as the Bucs could add contracts to their roster that are not the base minimum, but this is a much better snapshot of the Buccaneers' salary cap as it currently stands than the $18.5 million figure.
In the same vein as the above example, but in reverse, when a team has 51 or more contracts, new contracts added to the roster need to take into account the contract that gets knocked out of the top 51.
Let's say the Chiefs’ 51st contract is a $660k minimum base salary contract. The Chiefs then decide to re-sign Byron Pringle to a one-year/$1 million contract. For salary cap purposes, the Chiefs have not subtracted $1 million from their salary cap space. They actually subtracted $1 million - $660k = $340k. So, in this example, only $340k would be taken away from the Chiefs’ cap space.
Teams operate under this Top 51 contracts rule from the beginning of the league year until the first day of the regular season, and it warps offseason accounting to a huge degree. It is how teams can seemingly fit smaller level re-signings under the salary cap and is something every NFL fan needs to keep in mind.
Now, it is time to put our knowledge of NFL contracts to work.
The Cuts
We'll be using a salary cap of $185.6 million for this mock offseason, which includes carry-over cap space from 2020. This means the Chiefs start the offseason $23.48 million over the cap.
There will probably be a few cuts to some previously important players.
If the salary cap did not decrease this year, the Chiefs could have gone through this offseason without any additional cuts. However, due to the salary cap falling, it seems unreasonable and financially irresponsible to make all the salary cap space needed just from restructures. Some players will have to go.
One player that will be noticeably absent from the mock offseason is defensive end Frank Clark. That is by design. Clark is incredibly difficult to move this offseason.
Cutting Frank Clark would charge $39 million in dead cap space in 2021, costing $13 million in cap space.
Cutting Frank Clark with a June 1 designation would charge $25.4 million against the Chiefs cap and gain $500k in cap space.
Trading Frank Clark would charge $20.4 million in dead cap and gain $5.4 million in salary cap space.
None of these figures are ideal. It is hard to imagine that Clark is not a Chief in 2021. The smartest thing to do with Clark is do nothing, hope he plays better in 2021, and if he doesn't, then decide his fate next year when the numbers are more favorable for a release. In 2021 though? There is not much to do unless Clark takes a bonafide pay cut.
It is possible to have a functional offseason, even with Clark’s contract on the books as-is, with only a few cuts.
In this mock offseason, the Chiefs only cut two players.
Left tackle Eric Fisher is such an obvious cut on the surface that it feels almost destined to happen. Fisher will be coming off a late-season Achilles injury on the wrong side of 30 and is in the last year of his contract. By cutting Fisher, the Chiefs would save $11.3 million after replacing his contract in accordance to the Top 51 rule.
It would not be shocking if the Chiefs and Fisher get some sort of contract resolution sorted out, spreading out Fisher’s cap hit over a year or two so he can stay on the roster, but it feels like a long shot and mistake. A sad end for a player who has been a Chief for a long time, but the NFL is a business. Chiefs cap room: -$12.17 million
In the spirit of “the NFL is a business”, cutting running back Damien Williams is also a move that is depressing on the emotional side of the game. Business is business though, and the Chiefs would add $1.5 million in savings, which makes Williams a good mid-level cut to help retain some players at more important positions. Cutting a player like Williams is going to be a common roster move this offseason for other teams as front offices try to claw back some salary cap room from veteran contracts. This is why many in the NFL media are predicting this offseason could be rough for veterans around the league. Chiefs cap room: -$10.55 million
Fisher and Williams are the only two cuts needed to get to a respectable salary cap number at the end of the salary cap creation phase. No, cutting right tackle Mitchell Schwartz was not done in this mock offseason. It felt like a more interesting exercise to try and go through an offseason with Schwartz on the roster. His return in 2021 feels truly uncertain, so waiting it out and seeing how the roster ends up with him on the team feels like a believable, likely exercise.
Even with the cuts above, the Chiefs are still over the cap. In order to find the rest of the money needed, more salary cap space will have to be added through restructures.
The Restructures
Restructured contracts are not the end of the world.
Despite the negative aura surrounding restructures, due in large part to the salary cap apocalypses happening in Philadelphia and New Orleans, restructures are an incredibly powerful tool.
There are three players who are likely targets for the Chiefs to restructure.
I wrote about quarterback Patrick Mahomes’ contract last offseason and its unorthodox construction. That unorthodox construction can already help the Chiefs create cap space.
Mahomes’ contract is a bank the Chiefs can borrow from a couple of times over the life of the deal if they wish. Keeping the borrowing to only when it is necessary is the key, but this offseason is a time it is needed.
For this mock offseason, $15 million of Mahomes’ roster bonus in 2021 will be restructured into a signing bonus. The $15 million is spread out over the maximum of five years on his deal and saves $12 million in 2021. Chiefs cap room: $1.344 million
Tight end Travis Kelce's contract is very strange in hindsight. Kelce will make $13.25 million this year but will only make $7.5 million next year. Kelce also has no guaranteed money in his deal after this season, despite having three years left on the deal. To smooth this contract out and reward an all-time Chief with guaranteed money, Kelce gets a restructure to the tune of $10 million in total restructure money to save $8 million against the 2021 salary cap. Chiefs cap room: $9.344 million
Defensive tackle Chris Jones is the last restructure needed to make salary cap room. Jones’ restructuring is a bit scarier due to him only having three years left on his contract, but good savings can be found. It is hard not to imagine that Jones is not in the Chiefs’ future plans, so the restructuring still feels safe. Even if the worst happens and the Chiefs need to cut Jones next offseason, they can still do so, saving $19 million in salary cap while having $6.8 million in dead money. Chiefs cap room: $15.344 million
Summary
At the end of cuts and restructures, the Chiefs are now $15 million under the worst-case salary cap of $180 million. This required only a few cuts and restructures and no major moves outside releasing Eric Fisher.
Looking into the future, the restructures have done very little down the road to the Chiefs' future caps. In 2022 and 2023, the Chiefs added $8 million per year on Mahomes, Jones, and Kelce’s contracts. After that, it’s only $5 million a year till the end of the five-year period the restructure was spread out over.
This amount of borrowing from the future is entirely sustainable.
There are rumors that the salary cap will explode in 2022 due to the increased revenue share from the CBA, more lucrative TV deals and the return of in-person attendance. Over the Cap estimates the salary cap to be $227 million and other estimates have come in around that number as well. When this happens, will the Chiefs really care about $8 million tied up in three of their best players? No, they will not.
If the Chiefs wish to cut more players and make some more salary cap room, releasing players like Chad Henne, Dorian O’Daniel, and Anthony Hitchens (with a June 1 designation) are other plausible options. The savings on these types of moves are minuscule though, and it seems the Chiefs like those three for their roles on the team and believe the savings would not outweigh the cost.
While $15.343 million in salary cap space seems like very little to work with, the Top 51 rule will extend that money further than it seems at first glance. The Chiefs' offseason will look a lot like last year, as they will make signings and re-signings that seem to defy the math of the salary cap.
In the next part of the mock offseason series, we will attempt to simulate those physics-defying roster moves.
Read More: The Art of NFL Contracts: The Basics
