Findings of a Chiefs Fan Who #gotaclue

Denny Medley-US PRESSWIRE

Well, Chiefs fans, for those of you who read my article last week, you should’ve walked away knowing a little bit more about salary cap management. You may or may not have jumped to my rallying cry to show the player and team some love, and let the NFL world know that when they go up against the Chiefs they’re not just going up against the players and coaches, they’re going up against every Chiefs fan that bleeds red and gold.

Whether you did or not certainly depends on the individual. Some of you may be too disgusted by Clark Hunt and Scott Pioli’s management of your beloved Chiefs to look past your perception of them and root for the players. After all, Hunt and Pioli are cheapskates (to use the nicer term), right?

Well, according to Spotrac.com, it appears that, of the 32 NFL teams, the Kansas City Chiefs are spending the most cap dollars of any team on active player contracts in 2012.

I’ll wait for you to seek medical attention for your broken jaw; mine slammed pretty hard off of my desk, too…

That was not a misprint: the Kansas City Chiefs, owned by Clark Hunt and family, managed by Scott Pioli, appear to be paying the most of any team on active player contracts this season. Take a look for yourself:

Rk.

Team

Total Active Contracts

Rk.

Team

Total Active Contracts

127,933,241

105,287,029

CHI

126,358,124

HOU

103,155,468

NYJ

125,227,294

MIN

102,975,537

123,707,285

PHI

102,821,893

DEN

117,001,639

DAL

102,014,104

DET

116,158,991

WAS

100,947,807

NYG

111,211,940

TEN

99,407,782

PIT

111,016,166

ARI

99,013,354

JAC

110,538,183

BAL

98,095,030

109,348,529

CLE

96,861,684

ATL

109,067,644

STL

96,283,634

CAR

108,688,191

95,961,861

107,837,787

SEA

95,477,975

MIA

106,579,214

CIN

92,477,712

106,384,272

OAK

84,747,000

BUF

105,705,583

IND

79,641,342

Source: Spotrac.com

Now, I want to be clear. Spending “the most cap dollars… on active player contracts” does not necessarily mean that the Kansas City Chiefs are using/accounting-for the most cap dollars overall, it means that they’re paying the most cap money towards players currently on the team.

What does that mean?

Though most news outlets will report cap space availability for teams, this is a new day and age, and comes with it a new CBA, wherein available cap space money can be rolled into the next year without the need for teams to exploit loopholes*. This will affect how much cap dollars a team can spend on its players in a given season. This can really alter each team’s cap room which, in turn, will make cap space availability numbers a little less useful without context.

*It used to be that NLTBEs were accounted into the cap during the season they were set, and were the only cap dollars that could be rolled over, provided the player the NLTBE was assigned to didn’t earn it. So to rollover remaining cap monies, teams could make a ridiculous NLTBE late in the season that had no way of happening, say setting an NLTBE in Week 15 that would have your 3^rd string QB receiving all remaining cap dollars if he could throw 10 TDs by the end of the season. He, of course, wouldn’t, but since the NLTBE was accounted for, but not met, the money could be rolled over into the next season. The new CBA made adjustments to this by just letting teams rollover cap dollars without the need for trickery, and having NLTBEs count against the next season’s cap should they be met.

Ex: Let’s say Team A rolls over $1 million from last year’s season into this year’s season, and Team B rolls over $20 million. If after spending, both teams find themselves with a cap availability of $1 million, it won’t be because both teams spent the same amount of money. Rather, Team B would’ve spent more money as it spent both the league defined cap, plus $19 million of the $20 million it rolled over; whereas Team A would’ve only spent the league defined cap, and just didn’t touch its rollover.

But even that is only a portion of how people can confuse salary cap availability with money spent by the club on its active players’ contracts. In the NFL’s salary accounting policies and procedures, there is a certain thing that negatively impacts a team’s salary cap, that doesn’t seem to get a lot of media attention: dead money.

What is dead money? (you ask because you don’t use contractions)

Dead money is generated when a player leaves a team (usually by being cut, but sometimes through retirement or a trade*) and certain parts of their contracts were either guaranteed or solely within the club’s responsibility to pay (e.g. signing bonus). It gets its name because, even though the player is no longer with the team, and therefore doing the team no good, the money must be absorbed and paid for by the club, and it does cause a cap hit. So any dead money that exists keeps a club from spending that much more money on players who are (or can be) signed to the 53-man roster.

*For those left wondering, whether you thought to ask yourself or not, players willfully leaving, or willfully being allowed to leave, via FA don’t generate dead money, as their contract would’ve been fully satisfied, and there’d be no money left unpaid for a team to absorb.

Ex: Team A and Team B each have a salary cap of $100 million (for the purposes of this example there were no rollovers). Team A has dead money to the tune of $10 million. Team B has dead money to the tune of $2 million. After spending the money on this year’s team, it’s reported that Team A has $1 million in cap availability and Team B has $5 million in camp availability. At face value, and since availability gets reported much more heavily than dead money figures, it appears that Team A is spending more money on their current team than Team B. This is an incorrect assumption. After deducting each team’s dead money from their initial cap, Team A had $90 million to spend for the year, and Team B had $98 million. So though Team A appears on the surface to have spent more money on current player contracts (what with $1 million left compared to Team B’s $5 million left) doing the math shows that Team A has actually only spent $89 million on this year’s roster [$100 million (cap) – $10 million (dead money) – $1 million (available money)]; whereas Team B has actually spent the greater sum having devoted $93 million cap dollars on this year’s roster [$100 million – $2 million – $5 million].

Let’s take a look at each team’s dead money figures:

Rk.

Team

Dead Money in 2012

Rk.

Team

Dead Money in 2012

462,449

DEN

5,359,943

DET

467,645

CLE

6,254,856

519,336

STL

6,290,277

CIN

1,240,266

JAC

7,672,336

1,442,125

SEA

9,059,852

CHI

2,043,840

PIT

9,648,021

2,117,187

MIN

9,675,205

TEN

2,320,218

9,873,578

2,594,766

BAL

10,215,625

NYJ

2,724,951

BUF

11,634,582

NYG

3,024,749

DAL

12,635,743

ARI

3,276,475

MIA

15,197,987

ATL

3,526,774

HOU

16,382,685

PHI

4,921,269

17,962,912

CAR

5,296,573

OAK

21,757,394

WAS

5,357,521

IND

37,896,499

Source: Spotrac.com

It should be noted that $460,000-520,000 in dead money is pretty well par for the course for any team in a given year, just due to cuts to fringe players. Here you’ll see the Chiefs have the 7^th least amount of dead money affecting this season’s cap with $2,117,187. Interestingly enough, Demorrio Williams accounts for $1.6 million of this figure, with the remaining $517,187 being spread between 7 different (former) players with Gabe Miller accounting for the second highest figure ($148,875) and Brandon Bair, the least ($4,666).

Another pitfall in using cap availability in judging how much a team is spending on its players’ contracts is, as I touched on last week, that LTBE goals will, for accounting purposes, appear as cap hits on the current season’s salary cap, but whether or not players will earn this/these goal(s) is, of course, not a guarantee until it happens.

So to a common observer who a) doesn’t consider how rollovers affect the cap, b) doesn’t consider dead money and c) doesn’t consider how things such as LTBEs must be taken into account, it’s a quick and easy jump to assume that the more cap space a team has available, the less money that team is spending on its current team. This is the Kansas City Chiefs’ current plight. Fans see that $14.5 million in cap space is remaining, the third most in the league, and assume that Clark Hunt and Scott Pioli are cheap bastards (to use the less nice term). Many Chiefs fans are furious that they’re not spending more. However, as stated at the beginning, of all 32 teams, the Kansas City Chiefs appear to be spending the most cap money this season towards active player contracts.

But how can that be? Wasn’t it just reported back in February that the Chiefs had $63 million in cap space remaining?

At the time that that report was released a few things were taken into account that increased that figure, while several things were not taken into account that would lower that number. Basically, the reported figure was artificially larger than it actually was.

Namely, the $63 million figure included the $24 million (approx.) that the Chiefs rolled over from last season*, but it did not include contract escalators (which, by the way, tend to be non-negotiable devices built into contracts) which amounted to approximately $18 million. Nor did this figure include the money the team was required to pay out to players for NLTBEs offered to them and achieved during the 2011 season and estimated to be about $5 million. Nor did it include money for RFA Tenders (which really wound up just being Jovan Belcher’s for $1.9 million).

*The Chiefs announced through their official team site that they were rolling over $20 million; however sites such as NFL.com, ESPN & Spotrac reported the rollover as approximately $24 million. Given these sites reputability and independence from the organization, we’ll assume the higher number

After deducting the values that were not deducted prior to the report’s release, the Chiefs’ so-called available funds dip to about $38 million (a much more believable figure). Now deduct for Routt’s signing, Dwayne Bowe’s franchise tag and Jovan Belcher’s RFA Tender and we’re down to about $22 million, which is what was reported just before free agency.

Now deduct for the signings of Winston, Boss, Hillis, Quinn, and the rookie class, deduct for the re-signing of Travis Daniels, add money that was freed up through the restructuring of Tyson Jackson’s contract, deduct for Abram Elam and Edgar Jones, and we’re down to $16.5 million. As suggested in last week’s article, it is likely that the $2 million differential between this $16.5 million and the current $14.5 million is due to LTBEs being set for this season.

Okay, so now I see how they went from $63 million to $14.5 million, but if how much the Chiefs are paying on active player contracts is correct, it only appears to be about $8 million over the league defined cap… Pioli just did an interview a week or so ago where he said the Chiefs were spending about $20 million cash over the cap this season.

You are correct in your observation that the contracts amount to about $8 million over the league’s defined base cap. That being said, Scott Pioli is correct that the team is spending about $20 million cash over this same cap.

Alright, now you’re just $*%#@!# with me.

There is a difference between how much cap dollars a team spends in a given season, and how much “committed cash” it spends in a given season. While some things, such as base salary, workout bonuses, roster bonuses, etc., count equally towards both cap dollars and committed cash [Ex: $1 million base salary accounts for $1 million towards the cap and $1 million towards the cash], other things, such as signing bonuses and option bonuses, are accounted for differently.

Ex: Eric Winston signed a 4 year deal that comes with an $8.4 million signing bonus. The entirety of this signing bonus was given to him right away; however, it’s prorated over the course of the 4 year deal so that it hits the cap equally each contract year. So this particular deal is hitting the cap by $2.1 million this year, but hits the committed cash by $8.4 million this year.

Obviously, Winston’s contract isn’t the only contract lending to the difference in cap dollars and committed cash, but at least you can see how the difference comes about.

__________

So, are Pioli and Hunt cheap bastards? Looking at cap availability alone one would think “yes”; however, everything else seems to indicate otherwise. When the Chiefs announced the rollover of last year’s cap space into this season, Clark Hunt stated that the rollover money would be put to use in continuing to re-sign the Chiefs free agents, as well as to go out and sign some free agents from other teams.

The FO lived up to Clark’s word.

Beginning the 2011 season, the Chiefs had 27 players set to hit FA this past offseason. By controlling the player budget enough that Pioli had some idea of how much money could be rolled over, he was able to re-sign Hali and Flowers to extensions early on in the season, and re-signed Succop to an extension in December (and look how huge that turned out being this past weekend). The team also brought back Brandon Siler, Cory Greenwood, Jake O’Connell, Travis Daniels and Amon Gordon (with only Gordon not working out… by the way, no dead money was generated by Gordon’s short-lived contract). Bowe received the Franchise Tag and Jovan Belcher an RFA Tender which, though not as good as extensions, were at least enough to assure their return to the team (and had some other team picked up Bowe at the cost of 2- 1^st Round Picks, or Belcher for the cost of 1- 2^nd Round Pick, something tells me us fans could’ve lived with it). Of the 17 players that hit FA but were not retained, Carr and Orton are likely the only two to complain about. Six were contemplating retirement, four were just terrible, one couldn’t stay healthy with the Chiefs, and four were still perceived as desirable enough to be picked up. The Chiefs, in turn, picked up Routt, Winston, Boss, Hillis, Quinn, Abram Elam, and Edgar Jones as far as players on roster and hitting the cap go. They also picked up Kyle McCarthy, Martin Rucker and Jacques Reeves who all find themselves on IR and don’t count against the cap.

That’s a pretty good offseason. To be where they’re currently at cap-wise, but to have retained Carr, likely would’ve meant no Routt, no Boss and no Winston. To use more of the cap than is currently available (say by re-signing Carr but still signing Routt, Boss & Winston) means making a tougher time of re-signing the Chiefs pick of next seasons 17 scheduled free agents, and not having much money available to take advantage of other teams’ cap casualty cuts (i.e. next year’s Routts, Boss’s & Winstons).

Some of you might not like to hear it, or even want to accept it (even after all the work I just put in showing how they’re spending money and spending it wisely), but it appears the money isn’t being pocketed, and the current regime isn’t likely to end anytime soon. In fact, it looks like things are getting in order (non-Pioli-negotiated contracts are on the way out) and Pioli & Co. are just hitting their stride. But it should be a positive to know that Clark Hunt does care about the team’s success more than he cares about pocketing the money. Now if only the coaches and players can maximize their talents and do it on a consistent basis, we might just have ourselves a team worthy of championships…

Well, Addicts, if nothing else you’ve come away from this knowing more about your favorite NFL team. Maybe you’ve already given up too much hope to reverse the lynch mob, but the management seems to be giving all they can to the team and the fans; looks like it’s time for the team and the fans to reciprocate. While the team leaves it all out on the field on Sunday, why don’t we be there to back their efforts, and give Philip “Cry Me A” River(s) another miserable Arrowhead experience. GO CHIEFS!!!

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