Is Using void years good for football?

[CPA_MM]

Most NFL fans believe the NFL salary cap levels the playing field between clubs regarding resources for players. If that were true, how can one club with $174M of the available cap for the season afford sixteen players with contracts paying = > $5M per year (Eagles), and another club with $213M of the available cap can only afford eight(Chiefs)? 

 

I can best illustrate the problem by comparing quarterback contracts.

 

One salary cap extreme is Jalen Hurts's contract with the Eagles. He signed an extension that runs through the 2028 season. The agreement has seven void years. The first void year is the 2029 season, with an assigned $98M cap. The contract is also heavily backloaded. Every season, the amount of cash Hurts receives exceeds the season's cap charge. Hurts contract costs $43M yearly, but the cap charge for the 2023 season is $6M. 

 

On the other end of the salary cap strategy spectrum is Patrich Mahomes of the Chiefs. He signed an extension that runs through the 2031 season. The agreement has two void years with no cap assigned. The Chiefs wrote the contract with Mahome heavily backloaded. Unlike Hurts, only three of the twelve seasons (through 2031) have cash exceeding the cap charged. Mahomes' contract cost $3M less than Hurts' at $40M. The cap charge was $37M compared to Hurts of $6M.

 

The Eagles will have an advantage of low cap costs at quarterback through the 2028 season because of the use of void years. Hurts contract is only one example. Of the 15 highest-paid Eagle players, thirteen have void years as part of the contract with a $327M cap assigned. The Chiefs have none.

 

Teams using void years on contracts can afford $40M to $60M more in contracts. Clubs can delay dead cap implications because of void years for years. Is this good for football?

[Llevron]

What is the drawback for the eagles? Is this just an area where they are smarter than the chiefs or is there a reason the chiefs arnt doing it? 
 

I feel like if everyone dies it, it’s still a level playing field. But maybe that’s because I don’t fully understand what it is from your description. You have brought this up before, and I have been looking forward to if this new regime would dive into them so I could see how you feel about it then. 
 

Though I’m always worried that this only works for some teams and for others it’s beyond the spirit of the cap or whatever 

[Conn]

It’s fine, everyone can play by the same rules. The salary floor ensures that no one gets too cheap, either. The teams who do this pay the piper eventually (when those void years eventually hit and the player is no longer with you or is no longer foundational, they will feel it—it may as well be dead cap when that happens), and are willingly putting off that pain to try to win now. 

[Silvernon]

The rules are collectively bargained, so there's nothing wrong with playing by the rules.

[88Comrade2000]

Cap also usually goes up a little each year. Think early projections for 24, cap goes up 15 million.

[FootballZombie]

The Eagles just took a proactive approach. Every season the teams with the high cost QBs will restructure their leading man's deal to create more space.

 

Barely any QB that costs a ton gets what they are scheduled to get. Its how business is done now to account for massive deals at QB.

[Ball Security]

I wish we could void 2023.

[Rufus T Firefly]

Philadelphia is just borrowing form the future to pay the resent. Many teams do that in different ways. 

 

Every.team has an opportunity to do so. They will have to account on the cap for money they are spending eventually. That's their choice.

 

It's only really stupid when a non-contending team does it. Like Washington. The fact that this team will have less cap space in the future because they wanted more space now when they had no chance to contend should anger every one of their fans. 

[philibusters]

In an ideal world I would probably limit void years to say 2 years, but everybody is playing be the same rules.   Basically using void years allows you to extend a Superbowl window from 1 or 2 years to like 5 years.  Eventually the Eagles will ahve to pay the piper on Hurts contract, though that could be 8 years into the future when the cap is 30% higher meaning the hit is much easier to take, but eventually they are going to have to go thorugh a true rebuild.

[Jumbo]

Hard to say. My void years were 1972-1983 and I don't remember enough to offer a solid opinion. They couldn't have been too bad cuz I didn't die but not sure how it affected football.

[NickyJ]

To this day, I still have no idea what void years are, or how teams are able to restructure deals. What does restructuring do? The articles always say that the teams free up cap space for next year by restructuring, but if a team is nearly maxed out on its cap, what are they doing to compensate next year's cost?

 

I kind of gave up trying to figure it out and now I just think it's bearded clean-shaven, business-suit-wearing men in the sky who wave magic pens that print money. To make cap space, they just have to want it hard enough.

Edited December 14, 2023 by NickyJ

[Conn]

50 minutes ago, NickyJ said:

To this day, I still have no idea what void years are, or how teams are able to restructure deals. What does restructuring do? The articles always say that the teams free up cap space for next year by restructuring, but if a team is nearly maxed out on its cap, what are they doing to compensate next year's cost?

 

I kind of gave up trying to figure it out and now I just think it's bearded clean-shaven, business-suit-wearing men in the sky who wave magic pens that print money. To make cap space, they just have to want it hard enough.

It’s all funny money accounting but when a player is “restructured” to make cap space in the current year, their salary is being converted into a singing bonus. Meaning they get all of it at once as a chunk payment rather than as a series of game checks—which the players and agents like—and the cap accounting can be spread over the X number of years that the restructuring covers. 
 

So a player due $16M in salary this year could restructure, turning it into a lump sum payment and spreading the cap hit over X number of years. Which makes the current year cap hit go from $16M to whatever. So if the signing bonus cap hit is spread over 4 years, that $16M cap hit becomes a $4M cap hit each of the next four years, or however they want to structure it. Depends how they structure it, and there are certain rules about how you can spread the cap hits out, etc. 

 

Void years are totally different and are basically “empty” years on the contract that the player isn’t actually under contract for, but their signing bonus is spread into those years for cap hit purposes as well. So a contract with a $50M guaranteed signing bonus could be a 3 year contract with 2 void years slapped on the end, which would in effect be spreading the cap hit out over 5 years instead of 3 even though the non-guaranteed salary portion of the contract only spans 3 years. It’s all cap numbers vs actual cash payouts and does get complicated. 
 

The main thing to remember is that signing bonuses always get spread out over the life of the contract as cap hits, and void years extends the number of years those cap hits are spread over to allow for smaller cap hits. But it all eventually gets paid out and if you go too crazy with it it’s not much different from having tons of dead cap, where you’re spending cap space in the future on guys who aren’t even on the team.