To void is back in vogue in the NFL.
Even in Seattle.
And no, we’re not talking about a touchdown celebration being planned for next season.
Instead, it’s a reference to a tactic teams are increasingly using to do some financial sidestepping in a year with a decreased salary cap.
Due to COVID-19-related losses in league revenues in 2020, each NFL team this year has a salary cap of $182.5 million with which to assemble its 2021 roster. That is down from $198.2 million of 2020, and from the $210 million or so that teams figured they’d have in 2021 before the pandemic hit (and a number that was in mind when teams signed some players to long-term contracts before 2020).
As a reminder, the cap is determined by a formula in which players receive 48-48.8% of overall league revenue.
So, with less cap room available, teams are getting creative. And one way is through the use of what are termed “voidable years’’ in contracts.
What, exactly, is a voidable year?
Here is an explanation from OvertheCap.com, a website that tracks NFL financial issues.
“Voidable contract years are basically fake contract seasons that are simply used for salary cap manipulation,” according to OTC. “… The purpose of the void year is to allow a team to pay a player a signing bonus and prorate for more years than actually exists on the contract. Basically it’s buying on credit with the cap — buy now and pay later.’’
Let’s use the contract of one of Seattle’s newly signed free agents — tight end Gerald Everett — as an example.
As was revealed Thursday, Everett, who played the past four seasons with the Rams, signed a two-year contract worth $6 million guaranteed, which includes a $4 million signing bonus.
However, the contract automatically voids if Everett is on the roster five days after the 2022 Super Bowl (the Super Bowl following the 2021 season). At that point, Everett will become a free agent, meaning he essentially is under contract to Seattle for just the 2021 season.
However, because it is technically a two-year deal, the signing bonus can be spread out over both years — a $2 million cap hit for 2021 and a $2 million cap hit for 2022.
But for all other intents and purposes, the 2022 season doesn’t exist on Everett’s contract. There is no salary for that season. And the only way Everett can be on the roster in the 2022 season is to sign another contract with the Seahawks. The year is there solely as a device to spread out Everett’s signing bonus for cap purposes, bringing down what could have been a $6 million cap hit for 2021 to $4 million but putting the other $2 million on 2022.
Before 2021, Seattle had never used voidable years during the Pete Carroll/John Schneider era and has generally been regarded as a team pretty disciplined about not pushing money out into the future to pay for players now. This has sometimes been to the consternation of fans who wish the Seahawks might spend more heavily in free agency.
But as Joel Corry, a former agent who now writes about NFL financial issues for CBSSports.com, notes, “a lot of teams haven’t done it before this year.’’
Everett is the fifth player Seattle has signed to a contract this month that includes voidable years, the others being running back Chris Carson, center Ethan Pocic and defensive ends Benson Mayowa and Kerry Hyder.
Carson, for instance, signed what was initially reported in some circles as a three-year deal worth up to $24.5 million.
But the third year is a void year, and what Carson really got was a two-year deal that at its base is worth $10.4 million.
The void year, in 2023, allowed Seattle to spread out the $4.5 million signing bonus — money the player receives essentially the minute he signs the contract — over three years on the salary cap. Or, $1.5 million for each of the 2021, 2022 and 2023 seasons even though the total is paid in 2021.
But, similar to Everett’s deal, Carson’s contract officially voids after the 2023 Super Bowl (the Super Bowl following the 2022 season) at which point Carson becomes a free agent and the only way he remains on the roster in 2023 is to sign a new contract with Seattle.
The advantage of the void years is creating more cap space in 2021.
The disadvantage is pushing some of the expense into the 2022 and 2023 seasons in the form of what is called “dead money.’’
That’s another phrase that to the lay person may seem confusing.
So what is dead money?
Again, to let OTC explain it: “Dead money is the amount of cap space that you will still devote to the salary cap even if the player is no longer on the team.’’
To use Carson’s contract as an example, the $1.5 million in signing bonus money that Seattle pushed to the 2023 season by using a voidable year will count against the 2023 salary cap no matter if Carson is on the team — or even if he signs a new contract with Seattle before then. Thus, it’s called “dead money’’ because at this point Seattle can do nothing to remove it. And that means Seattle has $1.5 million less cap room to spend in 2023 for fitting Carson onto the roster in 2021 and 2022.
But the Seahawks and all other teams using void years more often right now are banking on the salary cap jumping significantly the next two years as revenues return to a more normal level — and also as the new TV deals being finalized begin to kick in.
Void years, though, are hardly new. Some teams began using them on veterans in 2011 when the league and players reached a new collective-bargaining agreement that created a wage scale for rookies.
Teams like the Saints and Patriots have used them for quarterbacks Drew Brees and Tom Brady to create more immediate cap space. New Orleans twice reached new contract deals with Brees to push the void years back. But it was a void year that allowed Brady to become a free agent after the 2019 season and eventually sign with Tampa Bay. When it was written in, the expectation of most was Brady and the Patriots would agree to a new deal before the void took effect.
Jason Fitzgerald of OvertheCap.com says that while void years can be enticing to try to win now, “in general, they usually end up hurting and leaving you with tons of dead money for players. That said, this year is unique because of the cap drop and almost everyone is using them because of it.’’
Because the Seahawks have previously avoided void years and also typically avoided long-term deals other than to its own core players such as Russell Wilson and Bobby Wagner, Seattle has usually been among the teams with the least dead money entering each season.
“To the extent possible, they try to keep things clean,’’ Corry said of the Seahawks, meaning, they usually don’t push much money down the road. Of using void years now, Corry said, “I wouldn’t say it’s a good strategy. But it’s maybe more of necessary strategy this year with the cap dropping $15.7 million.’’
Or as Fitzgerald said: “If it’s just a one-year thing, it’s probably not going to hurt them.’’