DEAD MONEY: noun; the unaccounted for portion of player bonuses; a drain on a team’s cap dollars in a given season; a stunning reminder of players who for a variety of reasons don’t play to the level of their contracts.
Surely we jest, well at least in part…
But in all seriousness, recently, much has made of the more than $21M in dead money that is currently counting against the Ravens’ Salary Cap. That amount represents over 15% of the league-wide Salary Cap of $143.28M. While the league average for dead money is around $14M, the Ravens have the 5th largest amount of dead money counting against their Cap and are one of only 7 teams that are currently carrying more than $20M in dead money.
Two common beliefs seem to come from these discussions:
- That when 2016 arrives and the $21M+ is gone from the Ravens’ Cap, then the Ravens will have $21M+ in additional Cap space to work with.
- That the $21M is a major reason for the team’s poor season and has been a major impediment to the team’s ability to construct a deep, talented roster.
Neither of these – especially belief #1 – are particularly accurate.
The first is essentially a myth and there are definitely some misconceptions about the second – and just how much the dead money altered the team’s ability to sign players and improve its roster.
THE MYTH OF $21M IN ADDITIONAL CAP SPACE IN 2016
It is a common refrain (and belief) that “the Ravens will have plenty of Cap space next year after the $21M in dead money comes off the books.”
Unfortunately, this simply isn’t true and is probably one of the most misunderstood aspects of what dead money means to the team’s Salary Cap and its application for the future.
Simply put, the dead money on the 2015 Cap has basically no impact on the 2016 Cap – one way or another – and certainly does not mean that the team will immediately have $21M+ in additional Cap space to spend in 2016.
The misconception probably comes from the all too frequently repeated mantra that “$21M in dead money will come off of the books” after this season. While it is true that there presently isn’t $21M in dead money counting on the 2016, it was never there to start with, so there’s no $21M to come off of the 2016 Cap in the first place.
The reason for this is that each year’s Cap calculation is its own separate calculation. Each year sees players’ salaries increase, so you can’t simply say that the removal of the dead money will create space the following year. So, because the number of players under contract for each year and the cost of those players from year to year are not static, there really is no correlation between the dead money on one year’s Cap to that of the next year.
For example, (in rough numbers) the Ravens are presently about $3M under the 2015 Salary Cap of $143M and that includes over $21M in dead money. That means that the 75 players that are presently on the roster (53, PUP, IR, PS) account for around $119M towards the Cap ($143M – $3M – $21M). Now, compare that to 2016, where the Ravens already have over $144M committed to the Cap for the 46 players currently under contract (which includes just $208K in dead money). So, as you can see, the determination of the Cap space isn’t about dead money, but about the cost of the players that are presently under contract for 2016.
And, the $21M in dead money on the 2015 has absolutely no bearing on that 2016 Cap commitment and the corresponding Cap space for the team.
SOME MISCONCEPTIONS ABOUT 2015 DEAD MONEY
Now, to be clear, no team wants to have to carry $20M+ in dead money and it most certainly has had an effect on the team’s ability to strengthen its roster, but just how much of an impact it really has had on the Ravens’ 2015 season is up for debate.
The main reason for this comes from the two players who take up the most of that dead money – Ray Rice (9.5M) and Haloti Ngata ($7.5M).
Obviously, Rice was a unique situation that the team never could have anticipated, but if Rice’s legal problems never had happened and Rice had a rebound season in 2014, he’d likely still be on the team and would be counting $7.75M against the Cap. So, with Rice on the team in 2015, there would not be a lot of difference between what he would have counted against the Cap versus what he’s currently counting as dead money.
Now, there would have been a ripple effect though, as the team, if Rice had played well in 2014, wouldn’t likely have re-signed Justin Forsett and he wouldn’t be counting $1.6M against the Cap. As such, while there would be less counting toward the Cap (and it wouldn’t be counting as dead money) and impact of the dead money from Rice ($9.5M) really isn’t that much different than what Rice (less Forsett) would have cost if he was still on the roster ($6.15M). There is a $3.35M difference, so that would help, but it’s not a $9.5M difference as some would believe.
On the other hand, if Rice had had a poor 2014 and the team would have decided to part ways with him prior to the 2015 season, the team would still have had to deal with the same $9.5M in dead money. So, while Rice’s release was due to extraordinary circumstances, the Ravens may well have arrived at this same spot had Rice not performed well in 2014 (although, a post-June 1 release would have cleared more space for 2015, but at the expense of Cap space in 2017).
Ngata’s situation is even more clear-cut. In the last year of his contract, Ngata was set to have a Cap number of $16M and a base salary of $8.5M. Because 2015 is the last year of his deal, the $7.5M of dead money was going to count against the Cap one way or another. If Ngata was still here under a contract extension, that amount would have still counted as part of his Cap number.
So, while the amount of dead money is high and certainly has had an impact on the team, the actual impact is probably not as great as it would appear because much of that money was going to count against the Cap one way or another. Again, certain not an ideal situation, but under the circumstances, likely pretty much inevitable either way.
