What is the June 1 release deadline and how does it affect the Salary Cap?
If a player is released after the CBA-mandated deadline of June 1st, the team gets the benefit of being able to spread the Salary Cap hit – or dead money – over two years. When a player is released after June 1, the team is relieved of paying that player’s base salary for the year in which he is released (and all future years) and the only amount that counts against the team’s Cap in that year is the player’s bonus proration for that year. The remaining unaccounted-for bonus prorations accelerate against the Cap in the following year.
So, for example, when a player receives a 5-year contract, with a $10M Signing Bonus, that bonus is prorated over the 5 years and counts $2M in each year. That $2M, plus the player’s base salary (and any roster bonus) counts in that year as the player’s Cap number.
[RELATED: Ravens Salary Cap Details (Just Updated)]
If a player is released prior to June 1st, all the bonus prorations that have yet to count against the Cap accelerate and count as “dead money” against the Cap. So, in the above example, if the player is released prior to June 1st of the 3rd year of the contract, the team will take on $6M in dead money (the $2M bonus prorations for the 3rd, 4th and 5th years of the contract).
With a post-June 1 release, the team will only have to account for that year’s bonus proration and all future prorations will end up counting in the following year. So, in the above example, instead of having to eat $6M in dead money in the 3rd year of the contract, the team would only have to carry $2M in dead money against the Cap for that year (which is that year’s Bonus proration), but would have to account for the other $4M in dead money against the Salary Cap in the following year.
In the simplest terms, when a player is released after June 1, the team’s Cap savings for that year is the player’s Base Salary (designated “P5” in the CBA), while the player’s bonus proration for that year is all that remains to count against the Salary Cap. The balance of the player’s bonus prorations will count in the following year.
Post-June 1 retirements and trades are treated the same way as a Post-June 1 releases.
Can teams release players prior to June 1 and still get post-June 1 Cap treatment?
Yes, teams are allowed to designate two (2) pre-June 1 releases for post-June 1 Salary Cap treatment. However, for the team, there really is no great advantage to using this designation because the player still fully counts against the team’s Salary Cap until after June 1st, at which point the player’s Cap number is treated as a post-June 1 release.
This provision was put in place to allow players to be released earlier than June 1 and hit the free agent market before teams have spent all of their free agent money and while teams are still looking to sign veterans to fill out their rosters. It’s essentially just an accommodation for the players and of little benefit to the team.
Will the Ravens use a post-June 1 release on any of their players?
In recent years, the Ravens have shied away from using post-June 1 releases; however, they did use the designation on Safety Bernard Pollard last year.
This year, with it appearing that the Ravens are going to be tight against the Cap, it’s very possible that the Ravens could use a post-June 1 release.
The most likely player to face a post-June 1 release is WR Jacoby Jones. As mentioned here in January, Jones’ diminished role in the offense and fumbling issues in the kicking game could make him expendable. But, because Jones just signed a new contract last year, there isn’t a lot of Cap savings ($750K) if released prior to June 1. This would mean that if the Ravens do decide to part ways with Jones, a post-June 1 designation may make the most sense. A post-June 1 release would allow the Ravens to create $2.5M in Cap space in 2015 (and facing a tight Cap, they are going to need to find ways to create Cap space), while having to carry dead money of $875K in 2015 and $1.75M in 2015.
Another name that is thrown around as a possible post-June 1 release is CB Lardarius Webb. This one is a much tougher call and will likely come down to 2 questions for the Ravens – (1) is Webb worth paying him his 2015 base salary of $8M and (2) do they think Webb will be a Raven in 2016 (when he is again due a base salary of $8M)?
If the answer to both of these questions is “no,” then a post-June 1 release would likely make the most sense. A post-June 1 release would provide the Ravens with $8M in Cap relief in 2015, but cost them dead money of $4M against the 2015 Cap and $6M against the Cap in 2016.
That $6M in dead money in 2016 will be a tough pill to swallow and may save Webb for another year.
Which brings us back to that 2nd question above.
The reason why Webb being on the team in 2016 is important is that if they decide to keep him in 2015, but expect to not keep him in 2016, then the Ravens are still going to have to deal with the $6M in dead money when he is released in 2016. So, in that case, that means that either way, they are going to have $6M in dead money to deal with in 2016.
And, that kind of circles them back to the question of whether he is worth paying $8M this year.
If the Ravens do decide that Webb’s play no longer warrants a $8M salary, it is likely that they would attempt to get him to accept a paycut before releasing him. While Webb may no longer be a $8M/year CB – and may not get that from anyone else either – he still may be a $4M- or $5M/year CB. Getting a lower Cap number, along with other Cap moves made elsewhere, may be enough to keep Webb around. Of course, it takes “two to tango” and if Webb refuses to lower his Cap number, the Ravens may have no choice but to release him.
But, as mentioned above – and this is important to remember – there is no immediate Cap relief or Cap savings when a player is released in March with a post-June 1 designation, because the CBA mandates that the player – although free to sign with another team – will still remain on the team’s Salary Cap until June 2nd.
So, in Webb’s case, that means that the $8M in savings isn’t available until June 2nd, at which point free agency for quality free agents has been over for months. So, while many articles and websites may be touting releasing Webb using a post-June 1 designation as a way to create Cap space to sign or re-sign free agents, that money isn’t really that helpful, especially for a team that is already tight against the Cap.
So, if you see someone claiming the Ravens can make $20M in Cap space, in part by releasing Webb, that projection clearly does not take into account just how the post-June 1 release designation works.
