Sep 15, 2013; Kansas City, MO, USA; Kansas City Chiefs strong safety Eric Berry (29) runs for yardage after recovering a fumble from Dallas Cowboys running back Lance Dunbar (25) (not pictured) during the second half at Arrowhead Stadium. The Chiefs won 17-16. Mandatory Credit: Denny Medley-USA TODAY Sports

Restructuring Eric Berry, Tamba Hali's Contracts Makes the Most Sense for the Kansas City Chiefs

Here’s a quick exercise to give you an idea of where the Chiefs are with their cap space. There are two rules: 1. Every player with dead money attached to them – money against the Chiefs salary cap even if they are cut – stays on the roster, and 2. Everyone with no dead money attached is cut.

The point here is to simulate the Chiefs need in improve the entire quality of the roster. Kansas City doesn’t just need to upgrade at starting safety and find a starting defensive end, they also need better depth in the front seven and along the offensive line. The Chiefs not only need to improve on Tyson Jackson and Kendrick Lewis, they also need to improve on Rishaw Johnson and Dezman Moses.

This isn’t a perfect way to simulate this need, but it is quick and effective for the point this post will attempt to make.

Anyway, there are seven players whom I made exceptions to the rules for in this exercise. Colin Kelly was cut even though he carries a $667 dead money tag. Why? Because he’s Colin Kelly and it is $667.

Six players without dead money attached to them were kept: Alex Smith (team is working out an extension), Derrick Johnson (he’s Derrick Johnson), Anthony Sherman (cheap and one of top fullbacks in the NFL), Thomas Gafford (KC just re-signed him and teams traditionally don’t have a lot of turnover at long snapper), Ron Parker, and Marcus Cooper (otherwise the roster would have only four defensive backs) were the six players kept for reasons explained in the brackets.

After the cut-down, the Chiefs have 35 players on their roster. Add in the Chiefs’ six draft picks and the total increases to 41, leaving the Chiefs with 10 open roster spots. Under this scenario – assuming a $5.5 million rookie pool (a likely over-estimation) – the Chiefs would have about $3.884 million in cap room to spend to fill those 10 empty spots. (Note: Only the top 51 contracts count against the salary cap.)

Simple Breakdown

35 Roster Spots: $113,409,585
Dead Money: $3,506,490
6 Draft Picks: $5,500,000
Total Remaining Cap Space: $3,883,925

This scenario leaves the Chiefs filling out the rest of the roster with guys they find off the streets. In other words, Kansas City could not be a significant player in free agency and most all of their improvement is going to have to come via the draft.

Now, as stated earlier, there are flaws with this game. For instance, if the Chiefs select two wide receivers in the draft then one could assume a Donnie Avery release, which would open up some cap room and reduce the open roster spots by one. (However, the open cap space wouldn’t come until well after most of the top free agents have signed.) No, this isn’t a perfect way to break down the Chiefs salary cap situation, but it gives us an idea of what the Chiefs are up against.

But if you’ve been reading Arrowhead Addict every day then you already knew the Chiefs were up against it when it comes to the salary cap. This exercise is intended to quantify in a different way how little room the Chiefs have to work with from a different perspective – less than $4 million to fill 10 roster spots. So, keep this number in the back of your head for a few minutes.

When there is a lack of salary cap space, the instinct is to cut or trade one or more of the players taking up significant cap space. The problem with the Chiefs is they only had one guy on the roster worth cutting – Dunta Robinson – and they’ve already let him go.

We discussed last week how difficult the situation at the top of the roster is when it comes to top salary cap eaters. All five players who make up the top of the salary cap hits are in one way or another locked into the 2014 roster: Dwayne Bowe, Eric Berry, Tamba Hali, Brandon Flowers, and Alex Smith.

Trading Brandon Flowers or Eric Berry sounds great in theory, but it ignores some key issues. While letting Flowers go would open up $3.5 million in cap room, it also opens up the problem of having to replace Flowers on the roster. Good luck finding a Pro Bowl-caliber cornerback while also upgrading another spot on the team for less than $3.5 million in cap space.

There are some good arguments out there about how Flowers isn’t a perfect fit for Bob Sutton’s system. I understand those arguments and even agree with some of them. However, those arguments in some ways ignore the flaws of the 2013 roster. For example, we all want to upgrade the wide receiver position because of the lack of quality play from the group. It stands to reason if the wide receiver play was really bad (which, again, we all agree with) then it probably had an affect on Alex Smith’s play. It is not out of the realm of possibility Alex Smith’s numbers would have been better if he had an average receiving unit to work with last season.

Same could be said for Flowers, who in no way shape or form was getting help from Kendrick Lewis at the end of the season. Additionally, Flowers was played out of position several times by being lined up against bigger receivers because the roster did not possess a corner better qualified to cover them. Think about the Denver games: If Sean Smith is on Demaryius Thomas and Marcus Cooper is on Wes Welker then who else would you rather have cover Eric Decker? Ron Parker? Quintin Demps? Dunta Robinson? And I know some of you don’t even want Cooper on Wes Welker.

Kansas City lacked the appropriate cornerback depth to keep Flowers where he should have been in those games: Covering Wes Welker. Instead, he was forced to cover Dez Bryant and Decker because the Chiefs didn’t have a better option.

Then there is the lack of actual financial help cutting Flowers brings. Remember the sub-$4 million cap number with which the Chiefs had to fill 10 open roster spots? The per player cap space allocation for those roster spots is about $388,393 per open roster spot. Cut Flowers and the empty roster spots increases to 11 while the per open roster spot figure increases to only $671,266. Losing Flowers isn’t worth adding less than $300k to your per player allotment. Additionally, $671,266 is not enough to land a quality replacement for Flowers and improve the team in other areas while also filling out the roster.

Same can be said for the other four players at the top of the Chiefs salary cap list. Yes, you can save money by letting them go, but good luck replacing the quality of their play at a low enough cost in order to fill other holes on the roster.

Reality for the Chiefs is pretty simple: Kansas City needs Hali, Berry, Flowers, Bowe and Smith on the roster as much as they need some of the cap room they occupy.

The best way to keep those five and open cap space is to restructure and/or extend their current deals. Good news is there is a lot of money to be saved with some savvy deals. Both Berry and Hali have only two years left on their current contracts, and the Chiefs will have leverage with both of them if they can convince Smith to sign an extension.

One proposed idea for Smith is to let him play out the 2014 season under his current deal and then franchise him each of the next two seasons while the Chiefs look for a young, long-term solution at quarterback. The problem with this is Smith will have a salary cap number of around $17 million in those two franchise years, which is an absurd amount of cap space to be occupied by Smith. Also, Justin Houston becomes an unrestricted free agent at the end of the 2014 season. If Smith is occupying the franchise tag then the Chiefs will have almost no leverage and no safety net in contract negotiations with Houston.

Signing Smith to an extension means the Chiefs can keep the franchise tag open, but it also means they can control the cap hits in 2015 and 2016 to something far more manageable than $17 million. John Dorsey can give Smith a contract which keeps the cap number more manageable for the next three years while also giving the team an out should they find a young franchise quarterback.

With this in place, Kansas City can go to the negotiating table with Berry and Hali with the goal of getting both of their cap numbers down to around $8 million. Succeed in getting Hali and Berry down to an $8 million salary cap number and the Chiefs will have opened up an additional $7,084,406 million in cap space for the 2014 season. How likely is this to happen? Better than you would think.

Remember, a player’s goal is to add as much guaranteed money to their contract as possible. Right now, Hali is guaranteed less than $6 million for the remainder of his deal, with that number shrinking to $2 million 12 months from now. Should he restructure his deal now, he could add another $2 million or more in guaranteed money, while also theoretically making his team better.

Same situation for Berry. The structure of football economics means it is highly unlikely he will see free agency any time soon. Right now he is healthy and coming off of back-to-back Pro Bowl appearances. Knowing he’s going to be franchised anyway (because Smith won’t have the franchise tag), and also knowing another ACL injury could be right around the corner, cashing in on guaranteed money if given the opportunity would be the wise business decision. The money may be distributed differently, but the guaranteed cash it what matters to him. Oh, and he also helps out his 2014 team by opening up more salary cap space.

This brings us back once again to the sub-$4 million cap number. Add the $7 million in savings from the new Berry and Hali deals and the Chiefs will have $10,968,331 to work with for 10 open roster spots when free agency hits in March ($1,096,833 per open spot). That is a number the Chiefs can work with to improve the roster, and it would not cost them one of their best players to open up the space. Nearly $11 million in cap space means the Chiefs could make a run at Jeremy Maclin or Arthur Jones and re-sign Geoff Schwartz, an option that currently does not exist. What $11 million means is the Chiefs can build on the 2013 roster as opposed to recycling it, which means the Chiefs will have a better roster (in theory) in 2014.

Kansas City’s best chance at repeating their success from 2013 is to get new deals done with Hali, Berry, and Smith. Otherwise, they’re going to take a step backwards in 2014.

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  • Stacy D. Smith

    Great post, Ben. A successful offseason for Dorsey is definitely going to involve a couple of restructures. As much as I’d like him to restructure, Flowers had his turn just last season. Bowe just got his extension last season so he’s probably off the table as well. You’re right about Berry and Hali.

    • Ben Nielsen

      Thanks, Stacy.

    • Tristian

      Agreed. This is a big season for the chiefs contract wise too not just on the field. If hali gets hurt again or just dosent produce and berry struggles in coverage again against elite players how can we justify paying them $8 million apiece? Its going to be interesting but like I said b4 Sutton has to be able to put players in a position to succeed no matter what the circumstances. We will see. But I hope we free up the $11 million because we have needs for sure

      • Nicholas Abuhl

        Wasn’t berry the second leading tackler this last season? The guy is a freak of nature athlete. Who’s only going to go up as he enters his prime in the next few years, he is constantly thrown down in the box and has to sort through picks and blocks every game. His coverage skills were shaky last season but, his coverage skills progressing incredibly after he had spent the season a few seasons ago covering. Of course his skills will diminish slightly with the position he’s being put in. The guy didn’t allow a touchdown in the first what? 8 games or something ? He’s well worth the 8 mil, while I do believe if he restructured it would help the team as a whole. Secondly Tamba Tamba Tamba . Love him. But he’s leaving his prime. Restructured is needed.

    • KCMikeG

      Great post Ben. After the way Bowe played he should offer a restructure!

      • Troy Utt

        I disagree Mike… Bowe should offer a refund!

        • KCMikeG

          Agreed! But since that will never happen he should be more than willing to be more reasonable this year. If he steps up and plays worthy of his money then he will have settled his debt and we should reward him. I’m more than a little shocked how so many want to just give him a pass for last year. Even after all of his big talk before the season nobody held him accountable.

  • berttheclock

    Meanwhile, in other news, Comcast is merging with Time Warner in 2014. In 2015, look for Comcast to outbid Direct TV for Sunday Ticket.

    Now, back to, as Stacy correctly states, the great post by Mr Nielsen.

    • Ben Nielsen

      Comcast and TWC merging is like the Raiders and Broncos merging – I hate them both passionately.

      • berttheclock

        Yeah, I await the new “Ka-ching, Ka-ching” of my Comcast bill. I recall the time the media mogul in Denver claimed the day was coming when the hoi polloi would write out two checks for both cable and telephone services, one to him and the other to Bill Gates. Well, that mogul owned cable rights in Seattle when I lived there and he was taken over by Comcast. Now, I write one check to Comcast for their bundle. If not for sports and On Demand which my wife prefers, I believe we would go the way of friends living on the Washington coast and have Magic Jack for phone service and pick up Hulu, Netflix and other services and dump Comcast. I have another friend who knows how to by-pass and he picks up ESPN, while, other friends tell me to even dump our computer and just use a tablet or some Galaxy setup. Funny thing is when we moved to Vancouver, WA and had the Comcast tech out to install everything for us, he spent the majority of his time demonstrating how he only used his Galaxy and told us he would never have cable.

        • Ben Nielsen

          It’s all one big scam.

  • mattU

    I agree that restructuring Berry and Hali makes sense, but trading Flowers and cutting him have different effects on the freed cap space. Cutting him saves 3.5Mil as you have eluded to, but trading him saves 7.5Mil (my understanding is the only thing the Chiefs are stuck with in a trade is the prorated signing bonus, which is 3Mil in 2014)…I’ve seen no one suggest cutting Flowers. For the 2015 season, a Flowers trade would save 8.5Mil. The question is whether a Flowers trade is a real possibility, and that’s debatable. I like Flowers, but 10+Mil/year is pretty steep for someone not matching up against #1 receivers…My guess is any potential trade partner will either be a zone scheme or a man-scheme that allows him to match up with #1s.

    • Ben Nielsen

      The Chiefs would save $7 million against the cap if they traded Flowers after June 1st. If they traded him today, they would only save $3.5 million against the cap.

    • berttheclock

      Two problems with Flowers, this past season. First, he is a Cover Two d-back and Sutton’s system did not fit him. Secondly, there were those nagging injuries. If Dorsey can find a Cover Two team willing to take him, then, trade him.