Key Dates, Deadlines and Salary Cap Ramifications in 2017
As Training Camp approaches, several key NFL calendar dates become important and have great significance for purposes of building the team’s roster and its Salary Cap.
Several key factors are already in effect and have already come into play:
• Rule of 51 – At this time of the offseason, a team’s Salary Cap is determined by the “Rule of 51”. The Rule of 51 is in effect because team rosters now total 90 players (or more if some players are already on Injured Reserve) and it would be impossible to fit all 90+ players under the Cap. As such, the league’s CBA dictates that only the highest 51 Salary Cap numbers (and all bonus prorations for players outside of the top 51 and all dead money from players released) counts against the Cap at this time. This is the Rule of 51. The RSR’s Salary Cap table illustrates how the Rule of 51 operates.
• Waivers – As Training Camp and the Preseason progress, teams will make adjustments to their rosters. While often used interchangeably, there is actually a distinction between “releasing” a player and “waiving” a player. Players with 4 or more years of service time (known as “vested veterans”) are released and immediately become free agents. Players will less than 4 years of service time in the league (known as “non-vested veterans”) are “waived” and subject to a 24-hour waiver period. Teams must make waiver claims for such players and the player is awarded to the team with the highest waiver priority (presently based on draft order; will be based on team records after week 3 of the regular season). If a player goes unclaimed on waivers, he becomes a free agent.
• Injured Reserve/Injury Waivers – An injured vested veteran can be immediately placed on Injured Reserve (IR) and does not need to pass through injury waivers. A non-vested veteran, though, cannot be placed directly on IR. A non-vested veteran must first be “waived-injured” and if he passes through waivers unclaimed, he can then be placed on IR. Injury waivers end with the final cut down date (September 2nd), so teams, wary of another team poaching an injured player, may wait until that date before placing non-vested veterans on IR. This fear of poaching is likely the reason that the Ravens have yet to place a valued, non-vested veteran like CB Tavon Young on IR. Here’s a more detailed explanation of the Waiver rules.
Once the player is on IR, he does not count against the 90 man roster limit and a new player can be signed to take his place.
• Split Contracts – Most undrafted free agents (UDFAs) and lower round draft picks have split contracts, which means that if the player ends up on a reserve list (IR or PUP), he will receive a reduced base salary. Some veterans (vested or not) on 1–year deals may also have split contracts. As an example, a rookie (UDFA or later round draft pick) who is place on IR will likely see his base salary reduced from $465K down to $348K.
• TRAINING CAMP OPENS – Veteran players report to Training Camp on Wednesday, July 26th, with the first full team practice set for the following morning.
• WORKOUT BONUS CHARGES – The league’s CBA dictates that players are entitled to receive a daily stipend for attending the team’s organized offseason workouts. For 2017, this amount is $215 per workout. Some veteran players have negotiated for additional workout bonuses to be included in their contracts. The CBA further dictates that from the beginning of the league year in March until Training Camp begins, the team’s Salary Cap is charged with the maximum amount of possible offseason workout bonuses. For 2017, that amount is $619,200. Once training camp begins, that amount will be removed from the team’s Cap and the actual amount of workout bonuses earned by the players will be added to the team’s Cap. This usually operates to create a minimal amount of Cap space because the players rarely reach the maximum amount of possible offseason workouts.
• FIRST PRESEASON GAME – The Ravens host the Redskins at home on Thursday, August 10th.
• DOWN TO 53 – In past years, the NFL had two (2) cut down dates, by which teams first cut down from 90 to 75 players and then a week later cut down to the final 53. Earlier this year, the NFL and NFLPA agreed to get rid of that first cut down date. So now, teams will be able to maintain their 90-man roster all the way until after the final preseason game and then cut down to 53 by 4:00 p.m. on the Saturday after the final preseason game. This year that date is September 2nd. At that time, teams must either cut players or place them on a reserve list (IR or PUP) to get down to 53.
• ESTABLISH PRACTICE SQUADS – At Noon on Sunday, September 3rd, the waiver period for players released in the final cut down expires. At 1:00 p.m. that day, teams may begin signing players to their practice squads. Teams’ practice squads may consist of 10 players. The minimum salary for a practice squad player in 2017 is $7,200 per week (or $122,400 if on the PS for entire season). In 2015, the NFL removed its prohibitions on giving guaranteed money and/or signing bonuses to potential PS players. This means that teams will sometimes compete for PS players, as opposed to the gentlemen’s agreement to not poach another team’s PS players that generally existed prior to the rules change. Recent years have also seen an increase in teams paying PS players a weekly salary that is greater than the minimum PS salary. For instance, last year, the Ravens paid several players over the minimum ($6,900 in 2016), most notably, WR/KR Keenan Reynolds, who received a weekly salary of $16,500 ($280,500 for year). Here’s a link to practice squad eligibility rules.
• New IR Rules – In 2012, the NFL for the first time in recent memory, allowed teams to designate a player (one player) who had been placed on IR to return to the active 53-man roster later in the season. Under the prior rules, once placed on IR, a player’s season was over. In 2016, the NFL removed the need to designate a single player as “designated to return” and allowed teams to decide at any given time which player they wanted to have return from IR. This year, the NFL has extended the ability to return a second player from IR. One key qualification though is that to be eligible to return, the player must be placed on IR after 4:00 p.m. on the day after the final cutdown date. As such, to be eligible, most players must be on the initial 53-man roster before being placed on IR.
Any player designated to return must have been on IR for at least 6 weeks and, once designated to return, is then allowed to practice for at least 2 weeks before being activated. The player cannot be activated until he sits out at minimum, those 8 weeks.
• CAP COMPLIANCE – END OF RULE OF 51 – At 12:00 a.m. on the Thursday before the first regular season game (Sept 7th this year), the Rule of 51 expires and teams must have all players – 53-man roster, IR, PUP, PS – fit under the Cap.
By our calculations, the Ravens presently have around $4.34M in Salary Cap space. As of now, there is only one IR candidate (Tavon Young), so the team would have to count the 53 players on the active roster + Young on IR + anyone that starts the season on PUP + 10 PS players (total of at least $1,224,000) under the Cap. So, that’s means that as of now, at least 64 players would have count against the Cap at the beginning of the season. Based on those 64 players, the present Cap space would be reduced to around $845K in surplus Cap space as of the beginning of the season. See “2017 September Projection” tab on the Salary Cap Breakdown
But, as we know, with the inevitability of training camp and preseason injuries on the horizon, the number of players that will likely need to be held under the Cap is going to go up and more Cap space is going to be needed.
This estimate, though, is dependent on who makes the final roster and a surprise cut of a higher salaried player (who now counts amongst the top 51) to be replaced by a lesser salaried player (who may not presently even count against the top 51) would help create more of a surplus. Regardless, it’s seems pretty obvious, though, that the team is going to have to make some contract adjustments to create the needed Cap cushion to carry into the season to accommodate the need for in-season injury replacements and perhaps, just to be under the Cap on September 7th.
OTHER MISCELLANEOUS FACTORS
• GUARANTEED SALARY FOR VESTED VETERANS – Any vested veteran (at least 4 years of service time) who is on the team’s 53-man roster for the first game of the season is entitled to termination pay (if he’s never received termination pay before) if he is released at any point later in the season. This means that his base salary is essentially guaranteed for the year. This is why you will see teams releasing marginal veteran players prior to week 1 and then immediately re-signing them early the following week. There is also an in-season termination pay that applies to vested veterans signed during the season, which essentially guarantees the player 25% of the salary they would have received if not for being released (again, if they haven’t already received termination pay).
• INJURY SETTLEMENTS – Teams can work out injury settlements for players who have been placed on IR, but who aren’t expected to be injured for the entire season. This allows the team to save some cash (and Salary Cap space) and gives the player the opportunity to try and catch on with another team later in the season, instead of remaining on IR for the entire year. The amount of an injury settlement is based on the number of weeks the player is expected to be unable to practice or play.
Teams may also release a player from IR later in the season when the player has been deemed medically fit to return to playing (i.e. he must be able to pass a physical). This is essentially the same as an injury settlement as the player has already been paid while on IR, but again, it saves the team some cash and Cap and frees the player to try and find a job on another team’s active roster or PS.
• IN SEASON WAIVERS – Prior to the trade deadline, waivers apply, as explained above, and vested veterans and non-vested veterans are still treated as they have been since March. After the trade deadline on October 31st, though, all players – whether vested or non-vested – are subject to waivers. This presumably gives all teams an equal shot at obtaining the player via the waiver system and protects the competitive balance aspect of the waiver system (i.e. giving lesser teams an opportunity to obtain talent).