Everything a team pays a player eventually goes against that team's cap and sometimes that cap hit comes after the player is gone. That's 'dead money': a cap hit for a player that isn't even on the team. There are two ways that happens that I can think of:
1.) When a player gets a signing bonus the money is paid Day 1, but the cap hit is spread over the life of the contract (up to 5 years). So if that player gets cut or traded before all the signing bonus is accounted for it will simply count against the cap after the player is gone.
2.) If a player gets cut while there is still guaranteed money on his contract the team still has to pay the guy and the money goes against the cap.
I can run thru a few scenarios using Allen Robinson's deal (shown below from [
overthecap.com] )
Looking at the 'Prorated Bonus' column you can see that AR got a $14M signing bonus but the cap hit is spread over 5 years at $2.8M a year. You can also see that he has no salary in years 4 and 5. Those are referred to as void years and only exist so that bonus can be spread over the maximum of 5 years. Otherwise, if it was just a 3 year deal the cap hit would be $4.76M a year for three years ($14M divided by 3 instead of 5). This strategy saves $1.87M of cap space in '22, '23, and '24 but creates a cap hit in '25 of $5.6M when those final 2 Prorated Bonuses come due. That $5.6M is 'dead money': if AR plays out his contract and signs elsewhere in 2025 the Rams will have a cap hit attributed to him of $5.6M even though he's no longer with the team.
What if the Rams cut AR after the 2022 season? They still have to pay him his $15.25M guaranteed salary for 2023 ($10M Base Salary and $5.25M Roster Bonus). Plus they still have to account for the $2.8M Prorated Bonus in each of the last 4 years of his deal for a total of $11.2M. Combined, cutting AR after this season would result in a $26.45M cap hit in 2023 even though AR wouldn't be on the team. Dead money ...
The Rams could designate that cut as a 'post June-1' cut if they wanted to, even if they cut him before June 1. Doing that would only charge the 2023 cap hits to the 2023 cap and everything else would go against the 2024 cap. (i.e., the $15.25M guaranteed salary for 2023 and the $2.8M Prorated Bonus would count against the 2023 cap to the tune of $18.05M. The other three Prorated Bonuses totalling $8.4M would go against the 2024 cap. It's still $26.45M total dead money, but sometimes splitting the hit over two years makes that bitter pill easier to swallow.)
What if the Rams traded AR after the 2022 season? Well, his new team would be on the hook for his guaranteed salary so the Rams would be out from under that. But those 4 remaining Prorated Bonuses have to be accounted for. If the trade happened before June 1 all 4 remaining Prorated Bonuses would count against the 2023 cap: $11.2M in dead money. But if the trade actually occurred after June 1 only the 2023 Prorated Bonus would count against the 2023 cap ($2.8M) and the other three would count against the 2024 cap ($8.4M). It's $11.2M either way, just different accounting depending on when the trade took place.
And note: a team can cut a guy any time and call it a 'post June-1 cut' if they want to split the cap hit. But a player actually has to be traded after June 1 for it to be a 'post June-1 trade'.
As to how dead money affects the cap you probably already figured it out: if the Rams cut AR after this season that $26.45M cap hit would go against next year's $225M cap, leaving them with $198.55M to allocate to players actually on the team. This is obviously a handicap compared to teams that have the full $225M available to them.
If there's anything that needs clarification or if you have any other questions just lmk! (and that goes for anyone reading, not just Coy!!)
AlbaNY_Ram
Edited 2 time(s). Last edit at 06/08/2022 10:11AM by AlbaNY_Ram.