Late on Friday evening — while most Kansas City Chiefs fans were still discussing why the NFL had decided the Detroit Lions should be Kansas City’s opponent for the season opener on September 7 — NFL insider Aaron Wilson of Houston’s KRPC-TV reported that the team had signed the first of its 2023 draft picks: fourth-round defensive back Chamarri Conner.
#Chiefs deal for fourth-round pick Chamarri Conner: $4.591 million, including $751,364 signing bonus— Aaron Wilson (@AaronWilson_NFL) May 13, 2023
As Wilson explained, the total contract is worth almost $4.6 million — including a signing bonus of just a bit more than $751,000.
It’s a standard contract for an NFL rookie. In each of its four years, Conner will earn a base salary that is the league minimum for a player of his experience: $750,000 in 2023, $915,000 in 2024, $1,030,000 in 2025 and $1,145,000 in 2026.
So in each one of those seasons, Conner’s cap hit will consist of that base salary plus the pro-rated portion of his signing bonus ($751,368 divided by four): $187,842. That makes his 2023 cap hit $937,842.
If you had read my March 16 Arrowhead Pride article regarding the cap impact of draft signings — or Wednesday’s rundown of Donovan Smith’s contract details, which included a new estimate based on the lowest cap hits then existing among Kansas City’s top-51 contracts — you would have expected that Conner’s contract signing would have no effect on the Chiefs’ salary cap.
This is because his deal is now the 52nd-highest cap hit among the team’s contracted players; under top-51 salary cap rules in place before the final roster cutdown in August, it isn't considered in the team’s cap calculations.
But when the salary-cap site Spotrac included Conner’s contract in its cap calculations over the weekend, the Chiefs’ cap space fell from $2,676,244 to $2,488,402.
Since the cap space was reduced by $187,842 — the precise amount of Conners’ pro-rated signing bonus — it seemed pretty obvious that even though Conner’s contract was below the top-51 threshold, his signing bonus was still reducing Kansas City’s cap space.
I found plenty of articles on the Internet explaining how top-51 salary-cap rules work, but nary a one said anything about this — until I found a single sentence in a Russell Street Report FAQ:
The impact of the Rule of 51 is felt when a teams signs a new player and the former 51st player drops off the team’s Rule of 51 Cap number. For example, this means that if the new player has a Cap number of $1M, his signing doesn’t actually reduce the team’s Cap by $1M, but by the net of the $1M less the base salary of the former 51st player. Any bonus proration for that former 51st player remains.
And that’s correct.
In Article 13, Section 6(b) of the 2020 Collective Bargaining Agreement (CBA), pro-rated signing bonuses are identified as amounts that “shall be included for players whose Player Contracts are not among the Team’s 51 highest valued Player Contracts, tenders and Offer Sheets” in Section 6(a). (Emphasis added).
In the most opaque language I’ve yet encountered in the CBA, it also says UDFA signing bonuses (which tend to be small, but are relatively common) always count against the cap — along with any amount “that exceeds twice the applicable Minimum Active/Inactive List Salary for all other players.”
Examples of the latter would include a one-year, $2 million contract with a player who has two credited seasons. Twice the minimum salary for that player ($940,000) would be $1,880,000. This means $120,000 of that $2 million contract would count against the cap — if it fell below the offseason top-51 threshold.
But for most teams, that wouldn't normally happen. (Right now, a $2 million contract would be the 19th-highest Kansas City contract; all of it would be counted against the cap). But if a team didn’t happen to have a half-dozen players with very large cap hits on its roster (like the Chiefs do), it would be possible for that to happen.
The CBA also lists some other uncommon situations where amounts from below-threshold contracts could be counted against the cap, including deferred salaries, contracts specifying a larger salary amount if the player is traded to another team — and the so-called “Deion Rule.”
What does this mean?
Like 1955 Doc Brown said when he first met Marty McFly in “Back to the Future,” it means that “this damn thing doesn’t work!”
I’m referring to this table from my March 16 article, describing the cap space impact we could anticipate from the Chiefs’ 10 draft picks — that is, if all of them were used and the 51st-highest cap hit was $870,000.
By last Wednesday, we knew two things we didn't know in March: that Kansas City used a different set of seven draft picks — and the 51st-highest cap hit was $940,000. Based on that, I figured the cap impact of signing all the drafted players would be less than $1.5 million.
But that estimate didn’t take the CBA’s Article 13, Section 6(b) into account. Here is how that calculation should have been made.
The bottom line
When I estimated the eventual impact of Kansas City’s draft picks last Wednesday, I didn’t take the CBA’s rules about pro-rated signing bonuses for below-threshold contracts into account. That meant I underestimated the salary-cap impact of those deals by about $300,000.
In the grand scheme of an NFL salary cap, that’s not very much money — so it’s tempting to simply ignore this factor. In fact, while doing research for this article, I found over a dozen articles with cap impact estimates for drafted rookies. But not a single one of them accounted for this.
Could it be that some of those writers — like me — didn’t yet know about Article 13, Section 6(b)? Of course. It’s also possible that some of them knew all about it — and chose to ignore its effect.
But when a team has only $2.7 million in cap space — as the Chiefs did last Wednesday — $300,000 is a significant amount of money. And depending on where a team’s 51st-highest contract falls when rookie contracts are signed (and how many picks it uses near the middle of the draft, where the effect is greatest) it’s conceivable this little-known rule could make a much more significant difference.