Every season, we are reminded that many NFL fans don’t fully understand the intricacies of the salary cap for newly-drafted players. It’s during this time that many Kansas City Chiefs fans will ask, “How much will the team need to sign its draft picks?”
Here’s the short answer: it might be a lot less than you think. Let’s examine why this is so — and figure out how much money the Chiefs will really need to sign their draft picks.
How rookies count against the cap
When players are drafted — or when undrafted free agents (UDFAs) are signed after the draft — they immediately count against the salary cap. But whether they are drafted with the first pick or are the last UDFA signed, all of these rookies initially go into the system at the same salary: $750,000. (Small detail: Some UDFAs may be paid relatively small signing bonuses, which also count against the cap).
But until the regular season begins, each team’s salary-cap space is calculated using only the 51 largest cap hits on its roster. So as a practical matter, this means that virtually none of these rookie contracts will immediately reduce any team’s cap space — simply because any team’s 51st-largest cap hit is almost guaranteed to be equal to (or greater than) than $750,000.
For example: at this writing, the Chiefs’ 46th through 51st hits are $750,000; the 43rd through 45th are $870,000. So as free agents are signed over the next few weeks, the 51st-highest cap hit will only increase.
Of course, some of the newly-drafted players will eventually sign contracts for more than the league’s rookie minimum — and some (but not all) will ultimately be among the 51- highest hits. But until those contracts are signed, the drafted players will have no impact on the team’s cap space.
Teams don’t typically start signing these newly-drafted players until June — and they usually do it in reverse order. It’s often well into July before the most-impactful rookie deals are signed.
Even then, the actual cap-space impacts of the new contracts are reduced by another consequence of the offseason’s top-51 formula: a new contract over the top-51 threshold pushes the 51st-highest cap hit below it. In essence, this reduces the cap-space impact of the newly-signed deal by the amount of what becomes the 52nd-highest cap hit.
During the offseason, we see the same thing with free-agent signings. Let’s say the Chiefs sign a player who has a cap hit of $2 million. That contract pushes the 51st-highest cap hit ($750,000) below the threshold; it is replaced by the new $2 million contract. Therefore, the cap impact of the new contract is only $1.25 million.
How much cap space will be needed?
While we don’t know the precise contract figures right now, the rules of the Collective Bargaining Agreement allow salary-cap sites like Spotrac to project the contract values fairly accurately. Let’s see how the cap impacts would shake out if all the team’s picks were signed today.
As we see here, six of the 10 contracts for Kansas City’s draft picks will have cap impacts under $200,000. So rather than the daunting $10.3 million for these 10 players, the Chiefs would need just $2.8 million.
But that’s only if the players were signed today. What if they are signed in June or July — as we expect? By then, Kansas City will almost certainly have signed enough veteran free agents that the 51st-highest cap hit would be at least $870,000. Here’s what that might look like.
Now it would take just $1.9 million to sign the drafted rookies — and that’s the maximum that would be required. That’s because the 10 lowest cap hits won’t all be $870,000. Some will be higher — further reducing the cap impacts of the few rookie deals that will be among the top-51 contracts.
While it’s true that the entire $10.3 million for these drafted players will be needed by the time the season begins, these things also have a way of taking care of themselves.
First, it’s unlikely that the Chiefs will actually select players with all of these picks; some will be traded to other teams as general manager Brett Veach maneuvers through the draft. Some of the drafted players won’t make the final roster. Some veterans will be released throughout the summer, creating cap space for the rookies. And yes... the team could have some cap casualties on final cutdown day.
But what we see here is that there is no immediate need for a big chunk of cap space to sign the rookies. It will be well into July before the contracts with the greatest cap impact will be signed — and even then, the cap impact is likely to be under $2 million.
Then there’s one other factor: the team could end up trading some of its picks to move up (or down) the draft order. If Veach found a way to trade into an additional (or higher) first-round pick, the cap impact of the rookie class would go up. But even in the most extreme case, the team would likely need only need a few million dollars to sign its drafted players — way less than the $10.3 million now projected.
The bottom line
If you’ve been worried about the cap space the Chiefs will need to sign their draft picks, you can stop. Under top-51 rules, it won’t take as much money to sign them as you might have thought — and even when final cutdown day rolls around, it’s probably not something we’ll need to worry about too much; things will likely work themselves out.
In the meantime, keep an eye on Kansas City's draft trades. Trade-ups — especially for picks high in the first round — will be likely to increase the impact that drafted players will have on this summer’s cap space. But trading back will tend to make very little difference in the needed cap space — either now or in the regular season.