Panthers Could Save Up to $4 Million by Cutting Smith
With Panthers general manager, Dave Gettleman, and head coach, Ron Rivera’s, recent comments about Steve Smith, it appears it may be the end of the road for one of the franchise’s all-time greats. Jim Celania has made his feelings on the matter known:
Due to the way Steve Smith’s contract was restructured in 2012, he is currently guaranteed $3 million of his $4 million base salary and still has $6 million remaining on his $10 million dollar signing bonus. The Panthers also have to decide by July 1, if they want to extend Smith through the 2016 season and more importanly, pay a $3 million bonus ($1 million per year through 2016). If they pick up the option by July 1, Smith’s 2014 contract is no longer guaranteed. If they do not pick up the option, he’s entitled to a $3 million non-exercise fee (equal to the bonus). What this ultimately means is the Panthers have to pay Smith the $3 million option bonus or cut him by July 1. Because of this option bonus, if the Panthers decide to cut Smith, they have an extra option to spread out the dead money, if they so choose.
For reference here are Smith’s total cap numbers for each season:
2014 - $7 million
2015 - $10 million
2016 - $12 million
The options: (skip below if you just want the bottom line for each option)
Cut before June 1 – Smith’s $3 million in guaranteed base salary and $6 million would immediately hit the cap, but the Panthers would carry no dead money into 2015.
Cut after June 1 (or designate it as such) without picking up the option. Smith’s $3 million in guaranteed base salary and the $2 million in prorated signing bonus money ($5 million total) would count towards the 2014 cap, saving $2 million this season. This would also create $4 million in dead money for 2015.
Pick up the $3 million option bonus and cut Smith after June 1 – Picking up the option eliminates the $3 million in guaranteed base salary, which allows the Panthers to lessen the cap hit this season. By picking up the option, the Panthers would be responsible for just the $2 million in prorated signing bonus money and $1 million of the option bonus (total $3 million), saving $4 million on the cap in 2014. This creates $6 million in dead money for 2015.
Cut by June 1 – Costs additional $2 million against the cap in 2014 and nothing in 2015.
June 1 cut – Saves $2 million in 2014 and creates $4 million in dead money for 2015.
Pick up option, then cut – Saves $4 million in 2014 and creates $6 million in dead money for 2015.
While the first option may be the equivalent of ripping off a band-aid, it is the least likely option, because it adds $2 million to Smith’s salary cap number and Gettleman has made it clear they are ‘cap challenged’ and for that reason, will likely have to carry some dead money into 2015. If this is the end of the line, the Panthers will be choosing between $2 million in additional space this year or next.
The Panthers could obviously opt to keep Smith for another season at $7 million and cut him next off-season ($6 million cap hit in 2015 or $3 million in each ’15 and ’16) or restructure his deal, but reporter Bill Voth has stated on twitter:
If that is indeed the case, the three choices listed above could be the Panthers only options. The trade market for a 35-year old wide receiver, especially one teams suspect the Panthers want to part ways with, would be very limited, probably no better than a late 3rd day pick, if they got any bites at all.
Special thanks to @CorryJoel for his help with this post.