One of the most common topics being discussed this time of year around western New York water coolers and in the circles of Bills Mafia is how much cap space Brandon Beane has to work with to improve the Bills’ roster. Estimates range between $80-$90M, depending on where you look, but for our purposes, we will use the $81M referenced by our friends at Spotrac.com. Although we’ll spend a great deal of time between now and March 18th, the start of the new league year, fawning over the shiny new pass rushers, wide receivers, and outside linebackers they may splurge on, I want to focus today on a few details of the current collective bargaining agreement (CBA) that impact how much Buffalo needs to spend, and also why they may not have quite as much available as the simple math shows.
First is the Cash Spending Floor, often referred to as the ’89 Percent Rule’. The common misconception with this is around the timing and cash spending versus cap hit.
To summarize, the Cash Spending Floor is a NFL CBA rule that mandates every team must spend a minimum of 89-percent of the salary cap in cash in a rolling four-year period. This impacts the Bills because large pieces of the dead cap ‘medicine’ that Brandon Beane took in 2018, to the tune of a record $70+ million, impacted the salary cap but NOT the actual cash spent by the team. As a frame of reference, again from our friends at Spotrac.com, the Buffalo Bills have been 14th, 29th, 29th and 25th over the past 4 years in cash spending in the NFL. With no further expenditures, they are slated to be 29th once again in 2020 with that 2016 year where they were ranked 14th about to fall off the rolling four-year period. So the good news is, according to these calculations, the Bills have to spend in excess of $50M+ in cash this offseason just to get back to the minimum floor. *Pause to allow Bills fans to stop fist pumping and greedily rubbing their hands together over the impending spending spree*
Here is where the ‘but’ comes in that I referenced earlier, about why the Bills may not have quite as much available to them as that shiny $81M implies, and that is the 30-percent rule. With no obvious extension in sight for the current CBA, several rules come into play that apply to the ‘Final League Year’ of the CBA. These are logical in the sense that players want to be protected from owners kicking the can down the road to a season that may not, in theory, even exist if a new CBA is not reached. This now applies to the 2020 season, and no rule is more impactful for the Bills than the 30-percent rule. The specifics of the CBA read:
What this boils down to is that no team could sign an inflated deal with all the real money to be paid out in future years but with an artificially deflated 2020 salary to squeeze it under the salary cap. On one hand, this is not an issue for the Bills because Brandon Beane has, intelligently, not been one to use inflated signing bonuses and low salary numbers to squeeze in deals. If anything, he has shown the opposite with modest signing bonuses but healthy first year salaries to entice the player to sign, while still maintaining a great deal of team-friendly flexibility in future years.
The reason that I bring this up is that it has a much larger impact on extending our current players than it does on impending new free agent additions. That impact comes in the form of how to structure contracts with Matt Milano, Dion Dawkins, and Jordan Poyer. Each player has a current deal that is significantly below market — Milano and Dawkins due to their rookie contract structure and Poyer due to the lower-level second deal he signed to come here from Cleveland off of an injury. These players’ 2020 base salaries are slated as $2.144M for Milano, $2.95M for Poyer, and a paltry $985K for Dawkins. The normal CBA handling of deals like these would be to allow their base salaries to continue for 2020 and give them each healthy signing bonuses this spring, but for deals that begin in 2021 and the subsequent years beyond. This gives the players cash now as an incentive to sign but spreads out the financial impact throughout the life of the contract. However, Milano, Poyer, and Dawkins are all slated for deals anywhere between $10M, optimistically, and upwards of $16M, depending on position, meaning that, at minimum, they would have to have 2020 salaries in excess of $7-8M in order to have the incremental 30-percent increases in the subsequent years that would comply with the CBA.
This adds a layer of complication that will force Brandon Beane to either restructure the final years of their deals, along with the signing bonus, or to defer those extensions altogether. Either way, Bills fans need to slate a good chunk, possibly as much as $30-$40M of that shiny pile of available cap space, purely to the extensions of those players. You’ll notice that I didn’t go into the case of Tre’Davious White, as his fifth-year option provides the cushion to agree to terms while staying within the 30-percent rule, but it obviously takes up another substantial chunk of money if agreed to.
Before we get into the opportunity to re-sign the 2019 expiring deals of several pending free agents the Buffalo Bills have, these two CBA rules bring additional context to a very muddy financial picture in today’s NFL. We can all anticipate that the Buffalo Bills will be cutting some substantial checks this offseason, to the tune of $50M+ at a minimum, but I believe a greater portion of that — potentially over half of the available cap space — will need to be allotted for upcoming extensions of franchise-pillar players whose deals don’t expire until after the 2020 season.
Join us for our next piece, which will be looking at those pending free agents, which we think should be brought back to Buffalo, and what we project their market values to be.