The team that once abhorred restructuring contracts has become one of the most notable at doing so.
For lack of a better cliche, the Steelers are kicking the can down the road again after they restructured the contracts of David DeCastro and Stephon Tuitt the past week. It created more than $13 million of salary cap space for this year, but that $13 million will eat into future years’ salary cap space.
They have done it for quite some time now after resisting a move that other teams embraced long before them. Dan Rooney bemoaned it years ago, calling it “cash over cap” because it meant teams actually doling out more money in one year than the salary cap number.
It’s all perfectly legal by the NFL collective bargaining agreement and it helped the Steelers keep some of their best players. Now, they are doing it in an obvious attempt to accommodate a new contract — or franchise tag — for Le’Veon Bell.
Omar Khan, who joined the Steelers in 2001 and became their chief negotiator (and now VP of football and business administration), is the one believed to have persuaded the Rooneys to restructure contracts in order to create room, but they did not dive deeply into it until 2011.
It’s quite simple really. The NFL counts salaries and other bonuses in one year against that year’s salary cap. But a signing bonus — which the player usually receives immediately or is guaranteed to receive the same year — is spread out over the life of the contract for cap accounting purposes. So, if a player receives a $5 million signing bonus on a five-year contract, the cap cost for it is $1 million per year.
The signing bonus trick can be used not just when the contract is first signed. That is how it worked with DeCastro and Tuitt and with most restructurings. The Steelers turned most of their 2018 salaries and roster bonuses into signing bonuses. That reduced the cap hits this year and pushed them off into the future.
The thinking is the salary cap will continue to increase and those future cap hits can be more readily absorbed. Some predict a $10 million jump in the cap per team this year.
Some teams have gotten into trouble by overdoing it to where they had little choice but to cut players. The Steelers, so far, have not been forced to really rid themselves of prime players because of the cap.
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The Steelers truly seem intent on keeping Le’Veon Bell and, indeed, signing him to a long-term deal. Art Rooney II and Kevin Colbert over the past two weeks even seem optimistic it will happen.
So, the player who turned down a contract last August that would have paid him more than $30 million over the first two years with an average of more than $12 million annually, may actually get what he wants, or very close to it.
The Steelers are now $7,647,724 under the salary cap by Over The Cap figures. That counts only their top 51 contracts until the start of the season when all contracts count — 53 on the roster, those on injured reserve, those on the physically unable to perform (PUP) list and the practice squad.
The franchise tag on Bell this year would cost $14.54 million, all against the cap and as you can see, they have only about half that much now. Creating more cap room would be simple by restructuring more contracts or by cutting several borderline veterans.
But they actually could sign Bell to a multi-year deal right now with the cap room they reportedly have at the moment.
Say they were willing to give Bell an average of $15 million over four years or $60 million total. It could break down like this: $24 million to sign, $1 million salary this year and subsequent salaries of $10 million, $12 million, $13 million.
The $24 million bonus would count $6 million annually against the cap over each of the four years. So his cap this year would be $7 million — that $6 million from the bonus plus the $1 million salary.
Bingo. That is, if they want to pay him that much. It not only would give him an average of $15 million annually, but virtually guarantee him $35 million in the first two years. If they could come to terms on, say, a four-year deal that averages $13-14 million, so much the better.
Naturally, they would still need to create more room to sign others since a $7 million cap hit in 2018 for Bell would leave them only $647,724, but that should be no problem.
Is he worth it? It may not matter what anyone else thinks; they seem intent on keeping him.
First Published: February 16, 2018, 5:00 p.m.
