Analysis of Washington’s 2023 salary cap and a hypothetical new contract for Daron Payne

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January 17, 2023

by Steve Thomas

Washington drafted Alabama defensive tackle Daron Payne in round one of the 2018 draft to pair with star Jonathan Allen be the team’s defensive tackle group of the future.  Then, for reasons known only to the front office, Washington declined to offer Payne a contract extension last summer, and instead drafted Alabama defensive tackle Phidarian Mathis in round two of the 2022 draft to be Payne’s replacement.  Mathis had a quality college career and was a good draft prospect, but burning a draft pick to replace Payne didn’t make much sense to many fans or analysts, including this author.  Then, Mathis tore his meniscus in his left knee in week 1, forcing the team to return to Payne as the primary starter beside Allen.  Payne responded by having probably the best season of his young career and establishing himself as a key part of Washington’s defensive front.

What to do, then?  Proceed with the apparent plan from last offseason and last Payne go in free agency in favor of Mathis?  That’d be dumb.  Let’s instead figure out how to re-sign Payne, which is one of my favorite things to do here at The Hog Sty.  Fans are panicking, thinking that Washington must cut Carson Wentz and others to afford Payne.  I’m here to tell you that that isn’t true, sort of.  Washington may cut Wentz after his performance this season, but they can get away with not doing that while still retaining Payne if they show a bit of creativity.  What do I mean by this?  Let’s discuss.

2023 salary cap picture

Various sources project that the NFL’s 2023 salary cap will be in the range of $220M – $225M[1], if not more, which is a big jump up from 2022’s $208M.  The reasons for this large increase are twofold: (1) the NFL’s media rights income will increase, and (2) they are now past the compulsory, annual make-good cap decreases that came out of the COVID-shutdown year.  I think the final number will fall on the higher side, so for this exercise, we’re going to go with $225M.

The NFL rules account for something called “rollover”, which is the amount of free cap space from the prior year that can be included in the team’s cap number for the following year.  Right now, Washington has around $6M in free space.  Usually, the rollover number is a bit less than I estimate, so I’ll conservatively go with $5M.  That puts Washington’s final salary cap maximum at around $230M for the 2023 season.

Washington’s 2023 salary cap picture

Right now, Washington has approximately $197M in total salary cap hits for 2023, including those players currently on injured reserve and including the same amount for a practice squad as the team spent this year (which is only approximately $2.3M).  Seems like the team will have $33M or so of free cap space, then – quite a bit, right?  Not so fast.  This does not include the team’s dead cap amount, which is the amount of cap space taken up when players with contracts containing guarantees are either cut or traded.  This year, Washington has 45 players on this list who collectively count for about $22M in dead money.  Individual dead money assignments can extend for two seasons for each individual contract, depending on what time in the league year the players were cut or traded.  For next year, some of these will go away, but many of the bigger numbers will stay on for 2023.  Without causing too much brain damage in calculations, let’s conservatively estimate that $15M in dead money will stay on the books.  Therefore, that puts us at about $215M.

This also doesn’t include the rookie salary pool, which is the amount of cap space that next year’s rookie draft picks will occupy.  Last year, this number was pegged at a little over $6M, so – in order to avoid more brain damage – I’ll again just take a reasonable, conservative guess and put that number at $8M for next season.  This takes us to approximately $223M in occupied cap space, which would give Washington around $7M in free cap space.

Furthermore, the NFL sometimes tacks on adjustments to each team’s final cap space numbers, using criteria that I’ve never sat down and figured out.  This year, Washington had $1.7M in adjustments.  For these purposes, I’m going to be conservative and ignore the adjustments until it is announced by the NFL.

To emphasize, this is just my estimate.  It’s very difficult to hit these numbers exactly right, which is why all of the salary cap websites, including my page, have slightly different numbers.  However, this is an “in the ballpark” estimate of what Washington will be working with next year, prior to any roster cuts.

So can they re-sign Daron Payne or not?

The short answer is yes.  Whether they want to, and whether Payne wants to come back to DC are both open questions, but for the sake of this column, I’m going to go with the hypothetical that both the team and Payne want to meet at the alter and make marriage official.

To set the stage, Payne’s college teammate, Jonathan Allen, signed a 4 year extension in July, 2021, worth $72M, with a $30M signing bonus and $35.6M in total guarantees.  The contract fully guaranteed his 2021 base salary, and also included rolling guarantees in both 2022 and 2023 – his 2022 case salary became fully guaranteed in the first few days of the 2022 league year, and a portion of his 2023 base salary will become fully guaranteed in this coming March.

The Spotrac website (www.spotrac.com) estimates Payne’s market value at $19.4M in average annual value[2].  I think that number is higher than what Washington will be willing to pay, given that the average annual value of Allen’s contract was $18M, albeit from two years ago.  I don’t think that Washington either should or will want to go too much over the value of Allen’s contract.  Allen is more valuable to the team on the field than Payne, is the undisputed defensive leader, and now has two Pro Bowls on his resume, as compared to zero for Payne.  However, since it’s now two years later, contract values have naturally risen.  Therefore, I’m going to give Payne an average annual value of $18.5M.

Washington inexplicably gave Allen a 4 year extension, which was dumb.  They should have given him 5 years, both for salary cap reasons and in order to lock up a team leader for one more year.  Therefore, in my hypothetical, I’m going to give Payne a 5 year extension, which puts his total contract value at $92.5M.

Allen’s $30M signing bonus represented approximately 41.16% of his total contract value.  Washington needs to match that percentage, so that I’ll give Payne a $38.5M signing bonus, which is also about 41.6%.   As to his base salaries, Washington needs to minimize his cap hit in year one since they don’t have a ton of room; therefore, they’ll need to give him a small base in 2023, which is a tactic the team has used many times.  Therefore, I’m going to assign Payne a base salary of $2M in 2023.  He’ll demand regular pay raises in the following years, so I’ll boost his base salary to $10M in 2024, $12M in 2025, $14M in 2026, and $16M in 2027.

Much like they did for Allen, Washington should guarantee his year one base salary and have his year two base become guaranteed at the start of the 2024 league year.  As a result, Payne’s contract will have $40.5M guaranteed at signing and $50.5M in total guarantees.  There will likely be some bonuses involved, such as roster bonuses and some combination of roster bonuses, easy to achieve bonuses (which count against the cap) and difficult to reach bonuses (which don’t count against the cap), but that’s a bit too much brain damage for this discussion.

Where does Payne’s salary cap hits fall in my hypothetical contract?  What I’ve described would be a $9.7M hit in 2023, increasing to $17.7M in 2023 and increasing further as the contract progresses.

TLDR summary of Payne’s hypothetical contract

So there you go: 5 years, $92.5M, $38.5M signing bonus, $50.5M in total guarantees, and a first year cap hit of $9.7M.  Not as bad as you expected, right?

How can Washington do that?

$9.7M is still a big number given that I estimated that Washington will only have about $7M in free space, but it’s about as small as I can realistically make it in a contract that would be in the ballpark of something Payne would actually sign.  With the Rule of 51 coming into play at the start of the 2023 offseason, plus the fact that the rookie salary pool won’t be applied until the draft picks actually sign, Washington technically probably doesn’t need to do anything for the immediate future in order to do this contract with Payne at the start of the offseason.

Practically speaking, though, the team will need to make some moves to open up some free space for the sake of proper cap management, but they don’t necessarily need to cut Wentz just for this reason.  Washington is inevitably going to cut a few players who are currently on the roster, and multiple different players have contracts that lend themselves to restructuring.  Washington normally sticks to somewhere around $5M under the cap in order to have some room for maneuvering.   They’ll also want the ability to sign at least a couple of other non-min salary free agents.  Therefore, in my hypothetical they’ll probably want to eventually create space for most of Payne’s 2023 cap hit unless they choose to take a very minimalist approach to free agency.  Wentz is certainly the most obvious candidate and the leading contender to create salary cap space, but there are others.  I’ll leave that speculation to another column.  What do you think?  Let me know in the comment section below.

 

 

[1] https://www.nfl.com/news/salary-cap-for-2023-nfl-season-could-exceed-220-million-but-questions-remain; https://www.profootballnetwork.com/nfl-team-by-team-salary-cap-space/

[2] https://www.spotrac.com/nfl/washington-commanders/daron-payne-25108/market-value/