June 1: just another day
June 1 -- a date that has gone from being one of the flashpoint dates in the NFL year – has come and gone with little incident. Now, in the uncapped 2010, June 1 is just another date on the calendar, the beginning of the slowest month of the year in football.
The proration temptation
To review, in the Cap system of the NFL prior to last year – the year before the year without a Cap -- teams could defer the Cap charge on players with large unamortized bonus proration. By releasing – or trading or retiring – players after June 1, teams would take the Cap hit in the subsequent year. Thus, the team could not only remove the player’s salary from their Cap and but also only count that year’s prorated bonus amount, with the rest of the accelerated bonus dumped into the following year’s Cap.
As an example, say a player was signed to a six-year contract with a $12 million signing bonus ($2 million proration per year on the Cap) and released following two seasons (Javon Walker, anyone?). In past years, were he released prior to June 1, the team would take an $8 million hit in the year of release, as four years of accelerated bonus proration would immediately hit their Cap. Were he released after June 1, the team would count $2 million in the year of release and $6 million in the following year.
This mechanism, as you might imagine, caused some teams prone to credit card spending to become addicted to pushing out debt. Like other tools to use proration on signing bonuses for short-term gain, the NFL’s Cap has always been a soft cap, a “yarmulke”, if you will, with built-in methods of circumventing, er, maneuvering around it.
Cutting two cords
With the Packers, I was involved in releasing players after June 1 and signing those released (Hardy Nickerson and Tim Couch come to mind). I especially remember one release. After enduring four years of a bloated contract for receiver Antonio Freeman, we released him (we later re-signed him for a minimum contract) on the day my son was born, June 3, 2002, as I called in the transaction from the delivery room. I cut two cords on that day.
Death row players
The problem with the June 1 date was that teams made decisions to release players in February yet held them on their roster until June to defer the Cap charge. This created uneasy situations of players “on death row” waiting for June. With the 2006 renegotiation of the CBA, the NFL allowed teams to release up to two players per team in March and not have the Cap charge until the next season, an alternative to “permissions” for teams to talk to players under contract while waiting for the guillotine. The permissions were ostensibly about trades, but in truth there was no trading to it, it was beginning the negotiation for when they were released.
From a Cap management standpoint, I never liked the June 1 date. I always believed in the “pay-as-you-go” approach and taking our medicine rather than deferring it (obviously in cases like Freeman, we had no choice). Using the June 1 date repeatedly created a vicious cycle of built-up future Cap problems. However, once the Cap went up significantly with the 2006 CBA extension and teams became more careful with their spending, the June 1 date became less and less meaningful.
No meaning today
And now it has no meaning. Yes, there was the unique case of OJ Atogwe of the Rams, a special case who was a Franchise tag player in 2009 and due a high tender of 6.976M on set free in the open market, which he now is although still negotiating with the Rams to see if they have the best offer. And there are some re-issues of restricted free agent tenders, procedural matters for discontented players who have not signed their tender offers.
But from a Cap standpoint -- since there is no Cap -- the date lost meaning starting last year, as teams were not allowed to defer into an uncapped year.
The aforementioned Walker is one of those cases where teams truly benefited by the absence of a Cap, thereby the absence of Cap acceleration. Walker and his $8 million of acceleration, as well as his former teammate JaMarcus Russell and his $12 million of acceleration simply fade into the wind in this uncapped year. The Raiders, as well as other teams releasing players with previously high bonus proration –
Joey Porter, Alan Faneca, LaDanian Tomlinson, etc. – are able to push the “File Delete” button for Cap acceleration in this unique year, with no Cap consequences to the players’ release. However, there is a potential caveat: there are rumblings out there about some sort of retroactive Cap accounting in the new system of the NFL, whenever that system is, that will hold teams accountable for actions such as these.
June 1 may be gone forever
One day, however, and that day will hopefully be soon, there will be that new system and it will likely include a Cap. The better question is what kind of tools such as the June 1 deferral will be part of that Cap. I know the NFL wants to tighten up and “harden” its Cap if and when it returns, and the June 1 date is one of those tactics that truly soften the Cap. In my opinion, we will have a Cap again in 2011 but June 1 will have no significance in that Cap.
So hello and goodbye to June 1. Maybe for good.
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