Agent’s Take: How key players opting out affects salary cap for 2020 and beyond, plus more opt-out details

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The NFL and NFLPA finalized language for amendments to the 2020 Collective Bargaining Agreement, which address the COVID-19 pandemic, on Monday. One of the issues resolved involves the procedures for players opting out of the 2020 season because of COVID-19 concerns. Players have until Thursday at 4 p.m. ET to opt out by giving written notice to their teams. Originally, the deadline was scheduled to be seven days after the language was finalized. The opt-out period was shortened because of the lag time between the agreement on the COVID-19 protocols being reached on July 24 and finalization this past Monday.

Two types of opt-outs

Players who decide to opt out will fall into two categories: high risk and voluntary. To be considered high risk, a player must have a confirmed diagnosis of at least one of the Centers for Disease Control and Prevention’s 15 underlying medical conditions for developing severe illness from COVID-19. These conditions include cancer, chronic kidney disease, chronic obstructive pulmonary disease, serious heart issues, sickle cell disease, Type 2 diabetes, liver disease, moderate to severe asthma and hypertension.

A player voluntarily opting out will receive a $150,000 stipend provided he earned a credited season (three or more regular season or postseason games on the 53-man roster, injured reserve or physically unable to perform list) in 2019 or was selected in the 2020 NFL Draft. Undrafted rookies can opt out but won’t receive a stipend. Players opting out voluntarily won’t receive a credited season or accrued season (i.e., a year of service for free agency) for 2020.

The $150,000 stipend is considered a salary advance or loan that will be offset against any money earned in the future from playing in the NFL. Technically, a player would owe his team $150,000 if he never played another down of football after opting out. The lengths a team would go to collect the $150,000 remain to be seen.

The high-risk players will receive a $350,000 stipend, and undrafted rookies are eligible for this stipend. The $350,000 isn’t being considered a salary advance; it’s essentially salary that won’t be offset against future earnings. A credited and accrued season for 2020 will be given to the high-risk players.

The stipend is treated as a not likely to be earned incentive with both categories, so there isn’t a salary cap charge during the 2020 season. The stipend will count against the salary cap after the playoffs end. There is different treatment with the high-risk stipend for undrafted rookies, which are being classified as player benefits costs instead of salary cap charges.

The contracts of players who opt out toll for the season. Essentially, a player’s contract is frozen and will resume in 2021 with tolling. This means a player’s 2020 contract year becomes his 2021 contract year and additional years in the contract also get pushed back one year.  

The deadline exception

The decision about opting out for the 2020 season is irrevocable. This means a player can’t decide to play later in the season after opting out.

The only opt-outs allowed after the deadline are with changed circumstances. A player who receives a new diagnosis for one of the higher-risk factors after the deadline will have the ability to opt out. If a family member of a player who isn’t deemed at high risk is hospitalized or dies from COVID-19, he can also opt out after the deadline. The stipend will be offset against any base salary earned to the point in the season when the opt out occurs with both categories.

A change in circumstances after the regular season starts also serves as an exception to tolling contracts.

How opt-outs affect cap

There can be significant salary cap consequences when a player opts out. A player’s remaining 2020 compensation and 2020 bonus proration will be removed for his team’s salary cap. The 2020 bonus proration also shifts to 2021 with the rest of the 2020 contract year.

Jets linebacker C.J. Mosley can be used to illustrate how opting out works for salary cap purposes. Mosley signed a five-year contract in 2019 running through the 2023 season. His contract now expires after the 2024 season because of tolling.

Mosley was scheduled to make $16 million in 2020 on a $17.5 million salary cap number. His $16 million consisted of a $6 million fully guaranteed base salary and a $10 million fifth day of the league year roster bonus due on March 22 that was also fully guaranteed. The other $1.5 million of his salary cap number was signing bonus proration. His $6 million base salary and $1.5 million signing bonus proration come off New York’s books for this year. The $10 million from the roster bonus remains because it was already earned. The Jets pick up $7.5 million of 2020 salary cap room because of Mosley opting out and his contract tolling.

Mosley was originally scheduled to make a fully guaranteed $16 million base salary in 2021 on a $17.5 million salary cap number. Like in 2020, the remaining $1.5 million was signing bonus proration. Mosley’s 2021 salary is now going to be the fully guaranteed $6 million from 2020. The $1.5 million of 2020 signing bonus proration also moves to 2021. The $150,000 salary advance will be deducted from the $6 million, so Mosley will earn $5.85 million of his base salary in 2021 and have a corresponding salary cap charge. Mosley’s original 2021 salary and bonus proration will shift to 2022. The shift also occurs with the remaining salaries and bonus proration in his contract, which is why it now runs through the 2024 season.

Salary cap ramifications for key players

More than 50 players have already opted out because of COVID-19. The 2020 salary cap ramifications for some of the more noteworthy opt-outs are in the chart below.

Nate Solder OT Giants $19,500,000 $3,100,000 $16,400,000
Ja’Wuan James OT Broncos $13,000,000 $0 $13,000,000
Dont’a Hightower LB Patriots $12,445,313 $0 $12,445,313
Eddie Goldman DT Bears $10,800,000 $3,100,000 $7,700,000
C.J. Mosley LB Jets $17,500,000 $10,000,000 $7,500,000
Star Lotulelei DT Bills $8,100,000 $750,000 $7,350,000
Michael Pierce DT Vikings $5,000,000 $0 $5,000,000
Laurent Duvernay-Tardif OG Chiefs $5,500,000 $750,000 $4,750,000
Marquise Goodwin WR Eagles $4,281,250 $50,000 $4,231,250
Devin Funchess WR Packers $2,265,625 $50,000 $2,215,625

The salary cap savings will come handy for teams since unused salary cap can be carried over from one year to the next and the 2021 salary cap floor will be $175 million. The current salary cap is $198.2 million.

Nate Solder’s new $3.1 million salary cap number comes from a $3 million first day of the league year roster bonus he earned on March 18 and a $100,000 bonus for participating in the virtual offseason workout program. Eddie Goldman’s $3.1 million is also for roster and workout bonuses for the same amounts as Solder’s.

Star Lotulelei’s $750,000 salary cap charge relates to his $500,000 March roster bonus and $250,000 workout bonus. Duvernay-Tardif’s $750,000 is strictly from the roster bonus he received in April when took a paycut from $7 million to $3.5 million for 2020.

Ju’Wuan James, Dont’a Hightower and Michael Pierce’s entire 2020 salaries are being removed. 2020 was going to be Hightower’s final year of his contract. Because of tolling, Hightower won’t become an unrestricted free agent until 2022.

Pierce is a high-risk opt-out because he has asthma. He signed a three-year, $27 million deal, which included a $6 million, with the Vikings in free agency this year. Devin Funchess and Marquise Goodwin’s $50,000 salary cap charges are for participating in the virtual offseason workout program.

The Patriots have been hit hardest by the opt-outs, as eight players have decided not to play this season thus far. A little more than $33.25 million is coming off New England’s salary cap with the eight players opting out.



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