Needless to be said, we’re all thinking about Nick Fairley the person first and foremost. This is just football and his personal well being and health is in question – so that’s the priority. His heart ailment threatens more than his football career, potentially, and of course he has to take that seriously. That said, this is a Saints blog that focuses on the “on the field” stuff mostly, so we’re going to take a look at how is potential retirement would affect the team’s cap. It’s not great in the sense that a retirement works the exact same way as a team releasing a player from a cap perspective. In that FAQ link you can scroll down to the “How does the release or retirement of a player affect the Salary Cap?” section to cross reference. And of course you never want to release a player after he signs a big free agent contract. The last time the Saints released a player with a relatively freshly minted deal, it wrecked their cap for a while. Thanks Junior. But this isn’t nearly as crippling as the Galette situation. So here’s how the numbers look with Fairley:
Fairley signed a 4 year, $28 million deal with an $8 million signing bonus ($9 million guaranteed total). The yearly breakdown of his contract can be found here. Releasing him this season would create an additional $6 million of dead money. That’s because Fairley counts $3 million against the cap now but the Saints would be forced to pay all his guaranteed money ($8 million bonus plus $1 million of salary) up front against the cap. So that totals $9 million, minus the $3 million he already counts against the cap = $6 million additional. So basically the Saints would be paying $9 million in cap space to Fairley to be retired in 2017 and not play a single down, which is $6 million more than what they’d be charged against the cap if he played. It’s brutal but that’s the reality of his threatening condition on the Saints financially. Right now the Saints are around ~8.6 million to ~$9.5 million under the cap with their top 51 (depending on which site you trust), so Fairley retiring would make them between $2.0-$3.5 million under instead. So while that’s a major bummer, the team isn’t likely to make huge moves at this point and they are somewhat set up to absorb this. Still, injuries during the season would force them to sign veterans and you never know what becomes available at final cuts and what kind of contracts you’d want to create to sign them. The Saints would be a lot less flexible to land a random player at any point this season without creating extra space. It’s a major mistake (perhaps unpreventable) and it could force them to extend Vaccaro earlier than they want to to lower his cap his this season, or it could delay giving a new contract to a guy like Willie Snead. It’s major, but not insurmountable. The good news is the Saints would see immediate relief in 2018 – with $6.5 million in newfound cap space. In both 2019 and 2020, they’d have about $9 million in cap space.
More embarrassingly, the Saints are 3rd in the NFL currently in “Dead Money” at almost $17 million. Fairley’s retirement would put them at almost $28 million which would easily put them in 1st by a distance of near $10 million. That’s a song with a way too common refrain.
There is one caveat. This could tie into the “Barry Sanders rule”. Per the Russell Street Report FAQ:
What prevents a player from signing a contract with a huge signing bonus and then retiring the following year?
If a player unexpectedly retires in his prime, while playing under a long term contract in which the team gave the player a signing bonus, the CBA allows the team to attempt to recoup some of that Signing Bonus. This has become known as the “Barry Sanders Rule”.
If the team – usually after an arbitration hearing – is entitled to receive the return of a portion of the player’s Bonus, that amount is credited to the following year’s Salary Cap.
To be clear, though, not every retirement causes the return of bonus money. In fact, teams often sign veteran players to contracts with a number of years that they know will be fully reached. In such cases, the teams never seek the return of bonus money – and likely wouldn’t win in arbitration, anyway. The return of bonus money is only likely to occur when the player essentially retires unexpectedly and without legitimate reason (i.e. injury).
That last sentence in bold/underline seems like it could apply to Fairley. Fairley’s excuse would certainly be legitimate, but very unexpected. So the first question would be – would Fairley voluntarily reimburse some of his guaranteed salary bonus? If not, would the Saints take him to an arbitration hearing in an effort to recoup it? My uneducated guess would be that because Fairley signed the contract in good faith (a pre-existing condition that was never a problem before) and if doctors conclude his condition has somehow worsened since the signing of that contract… an arbitration would probably rule in favor of him keeping his signing bonus. This is the kind of this that guaranteed money is supposed to protect these players against. Sadly, it does no favors to the Saints salary cap.
All this said, another wrinkle is that the Saints could ask Fairley to delay officially “retiring” until 2018 if it’s decided he can’t play. It’s weird to think about how much more flexibility they have financially with Fairley on the team than with him off it. For this reason, they could deal with the cap hit in 2018 and ask him to not file official retirement paperwork until then – if he decides to retire. The Saints could strongly lobby for Fairley to spend 2017 on injured reserve in this case, where he would technically still belong to the team, so they can maintain the cap flexibility in 2017. It would give them less relief in 2018, though, so that’s something they’ll have to weigh. If he decides to retire in 2018 after a year on IR, the cap savings in 2018 would be just $1 million instead of $6.5 million (he counts $7 million against the cap, $6 million of it would be dead money). So that’s a tough question… would the Saints prefer ~$6 million in flexibility in 2017 for ~$6 million less in space in 2018, or less flexibility now for more space later?
Again, I want to reiterate that the priority here is Nick Fairley’s health. The Saints will have to deal with whatever consequence there is for him doing what is best. That said, I’d love to see Fairley back on the football field if his health allows… and the Saints would too from both a cap and on the field perspective.
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