With projections of the 2021 NFL salary cap set to drop this year--the range has been anywhere from $175 to $180 million--the last thing a team wants to do is rack up the dead money.
Dead money, defined as the leftover part of a contract (usually the remaining prorated signing bonus and any remaining guaranteed money) that remains on a team’s books once it terminates a player’s contract.
Having a lot of dead money on the books doesn’t necessarily spell doom and gloom for a team—last year, the Rams, Titans, and Washington Football Team all placed in the top-10 league-wide in dead money yet still made the playoffs. At the same time, in 2019, the Kansas City Chiefs, the Super Bowl champions, finished second behind the Colts in dead money.
But when a team has a lot of needs and a lot of money not available to use, that’s usually not a recipe for success.
So far, the New York Giants rank 21st in dead money ($3.222 million), which I below the league average of $4.862 million. At the end of January, I did a cap projection for the Giants in which I was able to clear over $41 million in cap space, $31 .649 million of that coming before June 1 and the balance after.
I want to revisit one of the suggested transaction from that article, that of offensive tackle Nate Solder, whom I remain convinced is headed toward retirement. There is another mechanism in play where the Giants can gain some immediate cap relief while not having to wait until after June 1 to benefit.
First, Solder was a high-risk COVID-19 opt-out. As such, he received a $250,000 stipend from the league, a total that counted against last year’s salary cap but which doesn’t have to be repaid (unlike those who voluntarily opted out and received the $150,000 stipend, which does have to be refunded to the team and would be counted as a cap credit).
Because he opted out, his contract tolled, meaning that instead of expiring after the 2021 season, it is now set to expire after the 2022 season. Thus if he and the Giants part ways, New York would save $6 million and be charged $10.5 million in dead money if Solder is a pre-June 1 transaction, or save $10 million with $a 6.5 million dead money charge in 2021 and a $4 million dead money hit in 2022.
As I noted in my original projection, if the Giants designate Solder a post-June 1 transaction, they’d have to wait until June 2 to have access to the savings. That wouldn’t be so bad as it would be newfound money that could be used to sign their rookie class while also having some left over for the season.
But if the Giants are gung-ho on adding a No. 1 receiver and re-signing Leonard Williams and Dalvin Tomlinson, then it’s no longer prudent to wait. Instead, the Giant could deploy the same tactic the New Orleans Saints used with quarterback Drew Brees, which is lower the base salary to gain instant and more relief.
Assuming Solder were contemplating retiring, the Giants could lower his base salary from $9.9 million to the veteran minimum for a player with 10+ years of accrued experience ($1.075 million) in Solder's case. That would free up $8.825 million instead of the $6 million the Giants would get if Solder were designated as a pre-June 1 transaction.
Unfortunately, lowering the base salary doesn’t affect the prorated signing bonus, which would still leave a $6.5 million dead money hit this year and a $4 million hit next year if he’s designated as a post-June 1 cut or a $10.5 million dead money hit if they rip the bandage off beforehand.
The advantage, though, to lowering the base salary is it frees up money for them to use right away—and how nice would it be if the Giants, in free agency, could find a way to keep both Leonard Williams and Dalvin Tomlinson and add a top-notch receiver?
If Solder is planning to continue his career, then such a move wouldn't really make sense unless the Giants were to convert the $8.8 million to a signing bonus to be prorated over the remaining life of the contract. But if retirement is in Solder's future, he, like Drew Brees did for the Saints, can help the Giants out financially by agreeing to a similar arrangement.
What's next for the Giants this off-season? Sign up for our FREE newsletter for all the latest, and be sure to follow and like us on Facebook. Submit your questions for our mailbag. And don't forget to check out the daily LockedOn Giants podcast, also available for subscription wherever you find podcasts.