Football 101: Why the post-June 1 designated cuts do not help free agency spending

Editor’s note: This is a repost from 2015 explaining the post-June 1 cut designation - which the Miami Dolphins used on defensive tackle Ndamukong Suh this year

The Miami Dolphins have to open some salary cap space this offseason, and they have to make some difficult decisions to make it happen. One of the options available to them is the use of the post-June 1 designation, where players are cut in March, but will be treated as if they were cut after June 1, which helps with dead money.

Dead money is the money a player will still count against the salary cap even after the team releases him. For example, former Dolphins tight end Michael Egnew counted for $157,239 against the Dolphins 2014 salary cap from a $10,000 workout bonus and the $147,239 prorated portion of his signing bonus. Egnew was cut by the Dolphins in training camp, meaning he was cut after the June 1 mark, when the NFL changes how they account for remaining guaranteed money and signing bonus. In Egnew's case, he was still owed (in salary cap terms) $294,478 from his signing bonus. Because he was released after the June 1 deadline, only the money from the 2014 season would count as dead money that year, with the remainder accelerated into the 2015 season (in this specific case, it was split evenly because Egnew was cut with two years remaining, but the one year/rest of contract acceleation would happen for multiple year deals as well).

That means, Egnew will count for another $147,239 in dead money for the Dolphins in 2015.

The basic idea is that a team can release a player, who may actually cost more to cut than to keep, with a way to spread the dead money cap hit across multiple years. Teams can wait until June 2 (thus, the "post" June 1 designation) to release a player, but that would mean the player would miss the majority of the free agent spending sprees that happen in the spring. To try to help with that issue, the NFL and the NFL Players Association collectively bargained two June 1 designations. Twice during the offseason, a team can release a player designated as a post-June 1 cut, which gives the team the savings the two-year dead money assistance, while allowing the player to hit free agency in March.

Everything sounds perfect for both player and team.

But, that's where the post-June 1 designation offers a false promise. It does save a team money - just not when they would want it. The player is still carried on the books until June 2. In other words, there is no savings for the team during free agency. They do not see salary cap relief until they pass the June 1 mark.

Yes, it's a little confusing. A June 1st cut designation means the player will be released after June 1 - or on June 2. Here's the pertinent section from the Collective Bargaining Agreement (bold added for emphasis):

Article 13, Section 6 (b) (ii) Acceleration.
(1) For any player removed from the Team's roster, or whose Contract is assigned to another Club via waivers or trade, on or before June 1 in any League Year prior to the Final League Year, or at any time during the Final League Year, any unamortized signing bonus amounts will be included in Team Salary for such League Year, except that for each League Year preceding the Final League Year, each Club may designate up to two Player Contracts that, if terminated on or prior to June 1 and if not renegotiated after the last regular season game of the prior League Year, shall be treated (except to the extent prescribed by Section 6(d) (iv) below) as if terminated on June 2, i.e., the Salary Cap charge for each such contract will remain in the Club's Team Salary until June 2, at which time its Paragraph 5 Salary and any unearned LTBE incentives will no longer be counted and any unamortized signing bonus will be treated as set forth in Subsection (2) below. If acceleration puts a Team over the Salary Cap, the Team will have seven days to conform with the Salary Cap, but may not sign any players until there is Room to do so under the Salary Cap.

For the Dolphins this year, there are three players who could, potentially, receive the two designations. Picking two, we will look at Dannell Ellerbe and Brian Hartline (Philip Wheeler being the third option).  Ellerbe is scheduled to be a $9.85 million salary cap hit if he remains with the team this year. If he is cut pre-June 1, he will account for $4.2 million against the cap in dead money this year, with a savings of $5.65 million. If Miami uses the designation, Ellerbe only counts for $1.4 million in dead money this year, while giving the team $8.45 million in cap space.

Hartline has a $7.35 million salary cap number this year, $4.2 million of which would be 2014 dead money if he were released without the designation, giving Miami $3.15 million back in cap space.  With the designation, he would be just a $1.4 million cap hit this year, with $5.95 million in savings.

Those two cuts, if they were both released as post-June 1 designated moves, would give Miami $14.4 million in salary cap relief...

...after June 1.

That's $14.4 million that cannot be used in free agency. It is money that will have to be used to sign draft picks and for in-season injury replacement signings. Thus, the falsehood of the post-June 1 designated cuts. The player may come off the roster, but their full salary cap hit, the $9.85 million for Ellerbe and the $7.35 million for Hartline, remains until June 2.

This does not mean the Dolphins should not use the designation. It does provide assistance, giving relief against the salary cap, and provides the money needed for signing the draft picks. It just does not provide for free agency spending sprees.

And, that is what most fans are thinking about when they look for salary cap space.

Just remember, if a player is designated a June 1 cut, the money saved does not exist until June 2.