How Much Dead Cap Is Too Much?
When is the cost to move on too high?
When is the cost to move on from a player too much?
When do teams find it much more.. tolerable, and it begins to actually enter the realm of possibility?
The answer to this is what we seek to resolve in this breakdown.
We looked at every single transaction over the past 5 Seasons that generated a Dead Cap hit – all 9,099 of them – to see what can be learned from the numbers to predict the likelihood that a given player is to be cut, traded, or retained based on associated costs. What financial barriers are teams not willing to hurdle, and which do teams gladly step right over?
The Highest Dead Caps Absorbed:
in Dollars ($) and as a % of a Team’s Cap
We’ll start off with a simple look at the maximums observed over the past 5 seasons.
MAX Dead Cap (in %) absorbed in the last 5 seasons: 19.47% of a team’s cap
* we tracked % of a team’s cap, as a team’s individual cap can be different from the NFL salary cap that year as teams are allowed to rollover unused cap from previous years.
How does position affect this, though?
Are there some positions that teams don’t consider valuable enough to justify absorbing high Dead Caps for?
Or, viewed a different way, positions where teams would rather take another year’s gamble on seeing if that player turns out?
• QB: $40,525,000 (19.47% of their team’s cap) – Matt Ryan (2022, ATL)
• G: $9,593,600 (4.60% of their team’s cap) – Trai Turner (2020, CAR)
• C: $12,114,000 (6.37% of their team’s cap) – Rodney Hudson (2021, LV)
• TE: $7,054,833 (3.41% of their team’s cap) – Zach Ertz (2021, PHI)
• WR: $21,800,000 (10.69% of their team’s cap) – Brandin Cooks (2020, LAR)
DEFENSE:
• DT: $13,564,705 (7.19% of their team’s cap) – Marcell Dareus (2018, BUF)
• DE: $16,453,055 (8.45% of their team’s cap) – Robert Quinn (2022, CHI)
• OLB: $24,000,000 (11.43% of their team’s cap) – Khalil Mack (2022, CHI)
• ILB: $12,832,500 (6.00% of their team’s cap) – Zach Cunningham (2022, HOU)
• LB: $9,160,000 (4.36% of their team’s cap) – Roquan Smith (2022, CHI)
• CB: $13,555,882 (6.91% of their team’s cap) – Janoris Jenkins (2019, NYG)
• S: $5,021,008 (2.31% of their team’s cap) – Minkah Fitzpatrick (2020, PIT)
SPECIAL TEAMS:
• P: $2,000,000 (1.08% of their team’s cap) – Thomas Morstead (2021, NO)
• K: $4,375,000 (2.09% of their team’s cap) – Josh Lambo (2021, JAX)
• LS: $1,227,500 (0.59% of their team’s cap) – Rick Lovato (2021, PHI)
Interesting. It seems that some positions like Left Tackle (T), Right Tackle (T) and Safety (S) are largely insulated from being cut and are more likely to end up earning all of their money with the team that gave them the contract. Other positions though, a team can be coaxed out of keeping that player.
Some positions like Cornerback (CB), Defensive Tackle (DT) and traditional Linebacker (ILB & LB) are more likely to be held onto until the later parts of their contract, where a player “is what he is” by that point and teams decide whether that’s enough to keep around the last year or so for a final run.
But going back to the big picture: having the Maximum dead cap that a team was willing to absorb over the past 5 seasons ($40,525,000) doesn’t tell you the whole story. Was this simply an extreme outlier? How common are Dead Cap #’s in this range? To answer this, we should break the Dead Cap hits into percentiles.
Dead Cap Hits by Percentiles:
Percentiles are useful because they tell you how much of the “population” is <this number> larger than.
For example, the 90th percentile would be the number that is larger than 90% of ALL Dead Cap hits in the last 5 seasons.
Here’s how the percentiles break down over the past 5 seasons.
99th Percentile: $7,250,491 || 3.71% of team cap
95th Percentile: $2,287,489 || 1.13% of team cap
90th Percentile: $913,108 || 0.46% of team cap
75th Percentile: $238,836 || 0.12% of team cap
50th Percentile: $91,200 || 0.05% of team cap
25th Percentile: $18,400 || 0.01% of team cap
Dollars ($) Percentiles (among $5M+ hits only || among 2.5%+ hits only):
Idea: But what would the percentiles be among just the bigger hits?
99th Percentile: $28,033,358 || 14.24% of team cap
95th Percentile: $18,825,000 || 9.52% of team cap
90th Percentile: $15,500,000 || 7.71% of team cap
75th Percentile: $10,665,521 || 5.52% of team cap
50th Percentile: $7,543,006 || 3.87% of team cap
25th Percentile: $6,000,000 || 2.97% of team cap
Wow. So it seems very clear that although technically $40,525,000 was the largest Dead Cap hit observed in the last 5 seasons, that number was such a huge outlier that it shouldn’t even be considered remotely normal.
We see that a Dead Cap hit of $7,250,491 would already be larger than 99% of ALL Dead Cap hits observed in the last 5 seasons (2018–2022).
► If we only consider Dead Cap hits of $5M+, then the cost that’d be larger than 99% of such hits would be $28,033,358. So it’s still a huge outlier!
We also see that a Dead Cap hit comprising 3.71% of a team’s cap would be a larger percentage of their cap than 99% of all Dead Cap hits have been.
► If we only consider Dead Cap hits that comprise 2.5%+ of a team’s cap, then a 14.24% team cap hit would be a larger chunk than 99% have been.
The percentages are useful to have as they allow us to use this data for future years too, when the salary caps will be different. If a team had a salary cap of $230 Million, this tells us that if they cut a player that resulted in $8,533,000 in Dead Cap, that’d be larger than what 99% of all dead cap hits resulted in to a team’s cap over the previous 5-year span.
Or, if only considering hits that were above 2.5% of a team’s cap, then if the salary cap one year is $230 Million we can say with certainty that a dead cap hit of $32,752,000 is objectively huge, as this negative result would be larger than 99% of the “big boy” dead cap hits. You could thus use these to gauge how likely such a transaction is to even take place or not. Sports media loves to make up rumors about things that will happen. We now have numbers to cut through the BS.
In this section we alluded to an idea: “what if we focus on just cap hits above actual, impactful amounts?”
In the final section we’ll expound on this idea as, really, players that most people will be familiar with are going to have had contracts with more money on the table. So let’s look at how common it is for teams to take on Dead Cap in various key, significant ranges. This will add more detail and really drive home the different territories you’re entering as a contract enters different stages of its life.
Dead Cap Hits Above Significant Amounts:
• Only 2!
• This comprised only 0.02% of ALL transactions, and only 1.14% of transactions worth $5M+!
How many were between $20 Million and $30 Million?
• Only 6!
• This was only 0.09% of all transactions, and only 3.43% of transactions worth $5M+!
How many were between $15 Million and $20 Million?
• Only 14!
• This was only 0.15% of all transactions, and 8.00% of transactions worth $5M+!
How many were between $10 Million and $15 Million?
• Just 32!
• This was only 0.35% of all transactions, and 18.29% of transactions worth $5M+!
How many were between $5 Million and $10 Million?
• That’s 123!
• These made up only 1.92% of all transactions, but they comprised a whopping 70.29% of transactions worth $5M+!
• For a more granular view in this hot range: $5–7.5M made up 49.14% of Dead Cap hits of $5M+, and the $7.5–10M range made up 21.71% of it.
* astute readers may wonder why the %’s don’t add to the same – this is because there just so happens to be a single transaction of exactly $10,000,000 that is in one range but not the other.
Wow, so it seems that if there’s a Dead Cap hit range to be most wary of, players do not want to be in the under $10M range! This seems to be the threshold where the “business” of the NFL really shows its face. Over the past 5 seasons, teams do not appear to have any hesitation cutting a player once they drop below this.
7 out of 10 players who had $5M or more guaranteed money remaining on their contract were cut as soon as it got into the $5-10M range. Your contract no longer seems to protect you once you’re down here!
As previously mentioned, dollar values can change meaning from season to season as the cap goes up. $5M today won’t buy the same in 7 years. To account for this, if instead of dollar ranges you’d like to see it as a % of a team’s salary cap, then we took care of that as well.
How many took up more than 12% of a Team’s Cap?
• Only 3!
• These made up only 0.03% of all transactions, and only 1.26% of transactions that took up 2%+.
How many took up between 9 and 12% of a Team’s Cap?
• Only 9!
• These made up only 0.13% of all transactions, and only 3.78% of transactions that took up 2%+.
How many took up more than 6 and 9% of a Team’s Cap?
• Just 21!
• These made up only 0.36% of all transactions, and 8.82% of transactions that took up 2%+.
How many took up more than 4 and 6% of a Team’s Cap?
• That’s 49!
• These made up only 0.89% of all transactions, and 20.59% of transactions that took up 2%+.
How many took up more than 2 and 4% of a Team’s Cap?
• That’d be 157!
• These made up only 2.62% of all transactions, but comprised a whopping 65.97% of transactions that took up 2%+!
One last thing we’d like to point out is that we looked at whether draft picks could coerce a team into taking on different cap hits. After analyzing tons of transactions it became very clear that dead cap hits taken on had little to do with the draft pick compensation. Instead, the draft picks acquired simply had more to do with the player being acquired, and what position they played.
► For example: The Texans (in 2022) took on $16.2M in Dead Cap when they traded Deshaun Watson for 3x 1st Rd + 1x 3rd Rd + 2x 4th Rd Picks.
► But the Bears (in 2022) barely received a single 4th Rd Pick for taking on Robert Quinn’s $16.5M in Dead Cap.
► Huge difference in compensation!
Closing Words:
So there you have it. Every season and off-season we wonder if a player is going to get moved (traded or released) or if they’re not going anywhere. One of the biggest components always mentioned is the money – because if you follow the NFL long enough, you learn that if you follow the money and the numbers, you’ll often get the clearest story. We now have numbers that can be used to anticipate and substantiate our thoughts on whether a player will become available, or if their team is likely going to be keeping them because the cost to move on is too high.
So the next time you’re hearing about contracts, guaranteed money and its impact on negotiations, we now have actual numbers to back up why and when players start to get concerned by the choppy waters suddenly around them. They know the sharks are in the water. We now know when those sharks are released into it. At $10-15 Million (or 4-6% of a team’s cap), the chum is thrown in. At $5-10 Million (or 2-4% of a team’s cap): it’s feasting time.