How the Redskins turned a two year cap penalty into a three year punishment
November 19, 2013 in Redskins Personnel
In the days leading up to the free agency period of 2012 the Redskins were hit with a $36 million cap penalty due to their actions in moving money around to circumvent future capped years. The penalty would be allowed to be broken up into two $18 million cap hits to "lessen the burden". Given a loss of nearly 1/6 of the cap the Redskins could have shown financial restraint and not spend wildly in free agency. It would have been a minor setback, but would have protected the team going forward. Instead the Redskins still spent significant free agent dollars, signing players at max value and putting money into future years. This turned the Redskins two year penalty into a three year punishment.
Though it was meant to help the Redskins by having it structured as a two year penalty, in reality the Redskins extended the pain of the penalty by splitting it up. As we've seen in the past with the Redskins continually pushing the financial burden down the road eventually catches up with you. In fact it is typically better recognize sunk costs and clear them off the books sooner rather than later. When you can clean the books, it can set you up going forward. We've seen a number of teams in recent years clear out a bunch of bad contracts all at once to give them a clean slate going forward. The Indianapolis Colts did this most notably in 2012 where they had $38 million in dead cap money and another $19 million in the expiring contract of Dwight Freeney. Instead of trying to extend Freeney or keep some of the players instead of having dead money, the Colts basically ate $58 million in cap space which allowed them to go on a spending spree in 2013. The Redskins could have done the same thing and eaten the full $36 million in 2012 (even if it wasn't official with the carry over rules they could have just spent $18 million under and that would have wiped out the 2013 penalty). That would have meant not spending big money on guys like Brandon Meriweather, Josh Morgan, Adam Carriker and one or two other moves, but it would have been best for this team long term.
The Redskins took the opposite approach and structured a lot of contracts that would end up hurting the Redskins 2014 cap situation. Josh Morgan, London Fletcher and Brandon Meriweather were given voidable years after two seasons, which means that the Redskins will take a $7 million cap hit just to have them off the team next season. The Redskins also backloaded a deal with Adam Carriker that will cost them $3.66 million to cut him after this season. To get rid of four players who have contributed extremely little to the Redskins over the past two years the Redskins will have to pay over $10.6 million in dead money. The Redskins also handed out 5 year contract extensions to offensive linemen Will Montgomery and Kory Lichtensteiger which was considered a bit questionable at the time (especially Lichtensteiger). While the money isn't huge, the Redskins would owe $2.2 million on Lichtensteiger and $1.5 million on Montgomery if they were to be released.
Another curious situation is the money they pushed forward on some existing contracts. The two biggest ones they did this were on defensive linemen Barry Cofield and Stephen Bowen. By restructuring Cofield the Redskins pushed $2.5 million forward, meaning that Cofield will cost an extra $800K in each of the next three years. Bowen represents an even more problematic situation. Restructuring Bowen bumped up his cap hits for the next two years from $5.9 million in 2014 and $6.9 million in 2015 to $7.02 million next year and $8.02 million in 2015. It also meant that if they were to cut Bowen next year, instead of the $3 million dead cap hit they would have taken without the restructure it will now be $5.04 million with the restructure. That is an extra $2 million the Redskins will need to eat this year that they wouldn't have had to.
If you add up the cap hits (just the extra part for Bowen), for getting rid of Morgan, Fletcher, Meriweather, Carriker, Lichtensteiger, Montgomery and Bowen it totals $16.4 million. If you want to add the extra money on Coefields deal over the next three years you are just under $19 million (though only $17.2 million affects them this year). So while they will have plenty of cap room to spend this upcoming season, it could have been so much more. Right at a time when the Redskins need it the most. Whether you feel the cap penalty was the Redskins fault or not, their response to it was short-sided and is hampering the Redskins ability to succeed in 2014 and going forward.