Plus Salary Cap Ramifications as Training Camp Approaches
With the opening of Training Camp just a few weeks away, it’s once again time to take a look at the important upcoming NFL calendar dates that will have great significance for the building of the Ravens’ 2021 roster (and its Salary Cap).
Several key factors are 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. RSR’s Salary Cap table illustrates how the Rule of 51
WAIVERS – As Training Camp and the Preseason progress, teams will inevitably make adjustments and tweaks to their rosters. While often used interchangeably, there is actually a distinction between “releasing” a player and “waiving” a player. Players with four or more years of service time (known as “vested veterans”) are released and immediately become free agents. Players will less than four 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; priority will begin to be based on team records after Week 3 of the regular season). If a player goes unclaimed on waivers, he becomes a free agent. For a more detailed explanation of the Waiver rules, CLICK HERE.
PHYSICALLY UNABLE TO PERFORM (PUP) LIST – Players coming off of injury or offseason surgery will often start Training Camp on PUP. This is often just precautionary and the player will return a week or two into Camp. There are two PUP lists – “active” and “reserve.” A player on PUP can work out and rehab with the team but is prohibited from participating in team drills. In order to be removed from PUP later in training camp or prior to the beginning of the season, a player must be initially placed on “active” PUP. If the player is not ready to come off of PUP before the start of the season, he will be transferred to “reserve” PUP and must miss a minimum of the first six games of the season. To be placed on either PUP list, the player must go on PUP at the beginning of Training Camp. Once a player has participated in a practice, he is no longer eligible for either of the PUP lists.
INJURED RESERVE/INJURY WAIVERS – A 2018 NFL By-Laws change has made it no longer necessary to place non-vested veterans (players with less than 4 accrued seasons of service time) on Injury-Waivers before placing them on IR. In the past, the need for Injury Waivers caused teams to risk losing the player to a waiver claim and on occasion some teams took advantage of this to poach players. As such, teams would often continue to carry the player on the 90-man roster until the final cutdown in order to not risk losing the player. The new By-Law solves this issue and non-vested veterans can now go directly onto IR without having to first pass through Waivers.
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 one–year deals may also have split contracts. As an example, a rookie (UDFA or later round draft pick) who is placed on IR will likely see his base salary reduced from $660K to $415K.
TRAINING CAMP OPENS – Veteran players report to Training Camp on Tuesday, July 27th, 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 2021, this amount is $275 per workout for veterans ($135 from rookies). 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 2021, that amount is $792,000. 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 PS GAME – The Ravens have three (3) preseason games this year, starting on Saturday, August 14th, when the Ravens host the Saints.
CUTDOWN TO 53 – In past years, the NFL had two (2) cutdown dates, by which teams first cut down from 90 to 75 players and then a week later cut down to the final 53. Starting in 2017, the NFL and NFLPA agreed to get rid of that first cutdown date and teams cut all the way from 90 to 53 by 4:00 p.m. on the Saturday after the final preseason game. This year, though, in response to possible lingering COVID-related issues, the league and PA have agreed on three (3) cutdown dates. Teams must cut to 85 players by August 17th, to 80 by August 24th and then down to 53 by August 31st. At that time, players must either go on IR or be cut.
ESTABLISHING PRACTICE SQUADS – At 4:00 on Wednesday, September 1st, the waiver period for players released in the final cutdown expires. Upon receipt of the league’s daily transaction report on the 1st, teams may begin signing players to their practice squads. Teams’ practice squads may consist of 12 players. The minimum salary for most practice squad players in 2021 is $9,200 per week (or $156,400 if on the PS for the entire season), however teams are allowed to sign two (2) players to the Practice Squad with no limit on their service time. Those players make $14,000 per week (or $238,000 if on the PS for the entire season). For practice squad eligibility rules, CLICK HERE.
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. In 2017, the NFL extended the ability to return from IR a second player. Any player designated to return must have been on IR for at least six weeks and, once designated to return, is then allowed to practice for at least two weeks before being activated. The player cannot be activated before having sat out for at least eight games.
One caveat: Only players who are on the original 53-man roster before being placed on IR are eligible to return from IR. Any player then placed on IR after 4:00 on Sunday, September 1st, is eligible to be one of the 2 players who can be recalled from IR later in the season.
CAP COMPLIANCE, END OF RULE OF 51 – At 12:00 a.m. on the Thursday before the first regular season game (Sept 9th this year), the Rule of 51 expires and teams must have all players – 53-man roster, IR, PUP, PS – fit under the Cap.
The Ravens will open Training Camp with around $8.5M in Salary Cap space. After a healthy set of OTAs, the Ravens presently only have 1 player on IR. So, as of now, the team would have to count the 53 players on the active roster + anyone who starts the season on PUP + 12 PS players (total of at least $2.04M) under the Cap. That would mean that, as of now, 66 players would count against the Cap at the beginning of the season.
But, as we know, Training Camp and preseason injuries are inevitable, so the number of players that will end up counting against the Cap is going to go up and in turn, that will eat into the team’s present Cap space.
OTHER MISCELLANEOUS FACTORS
GUARANTEED SALARY FOR VESTED VETERANS – Any vested veteran (at least four 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 November 2nd at 4:00 p.m., 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).