May 28, 2024

On March 14, 2024, the Los Angeles Chargers traded star wide receiver Keenan Allen to the Chicago Bears. Allen has one year left on his current contract. He’s slated to become a free agent after the 2024 season.

Multiple media outlets referred to Keenan Allen as a “cap casualty.” Of course, this label implies that the primary reason the Chargers traded Allen is because they couldn’t fit his salary under the cap. The Chargers management has leaked comments to the media that reinforces this narrative.

Allen is certainly not the first player to be labeled a “cap casualty.” Dozens of players have been given this label by various media outlets over the years.

But here’s the truth… there’s no such thing as a cap casualty. Let me explain.

 

Ubiquitous Salary Cap Narratives

One of the primary sentiments that pervades the broader community of NFL fans is the idea that the management of NFL teams sometimes must release or trade a player simply because they cannot fit that player’s salary under the NFL salary cap. This is rooted in the idea that the NFL salary cap is a hard cap that limits teams’ cash spending.

Many fans genuinely believe that if the teams did indeed have enough cap space, then the beloved player would still be on their favorite team—and this, of course, has been reinforced by various members of NFL front offices. They’ve implied that they’re handicapped by the salary cap and that they’d be willing to spend more money on players, if only they were not limited by the salary cap protocols—the implication is that NFL owners would be excited to give players more money, but the salary cap keeps them from doing.

In fact, rather than spending more money, management supposedly needs to find an “edge” in other ways because the salary cap is so oppressive. These sentiments are ubiquitous, but they’re erroneous. Situations like the Keenan Allen situation help us to see the flaws in those sentiments.

 

Allen’s Contract Details

To understand the situation, we need to understand both Allen’s contract details and the Chargers’ cap situation. Let’s look at the contract first.

In 2020, Allen signed a four-year extension with the Chargers that would run through the end of the 2024 season, worth $80.1 million.

Allen was scheduled to be paid $23.1 million in 2024 (that included a $5 million roster bonus and $18.1 million in base salary). In addition to that money, the Chargers had already paid Allen $11.6 million in bonuses, over the previous three seasons, that had not yet been allocated against the salary cap, so his total cap for 2024 would have been $34.7m ($23.1 million + $11.6 million).

In trading for Allen the Bears will be responsible to pay Allen the full $23.1 million throughout the course of the 2024 season and Allen’s cap hit for the Bears will be exactly that number, $23.1 million. The Chargers will take a “dead money” cap hit in 2024 against their salary cap for the $11.6 million (if you’re not familiar with dead money, you can learn more about it here).

 

Chargers’ Cap Situation

The Chargers were $7.5 million under the salary cap in 2023 and NFL rules allow them to roll over those extra dollars in the 2024 season. For the 2024 NFL season, the NFL salary cap is $255.4 million. So the Chargers have an effective salary cap of $262.9 million in 2024.

The sum of the rest of the Chargers’ salary cap obligations, for the rest of the roster, for 2024, is $218.5 million. They’ll likely need nearly $5 million to sign their rookies, so that brings us to apx. $223.5 million in total salary cap obligations. (Note: You can learn more about how rookie salaries work here).

That means that the Chargers are currently slated to have apx. $39.4 million in cap space. If the Chargers would have elected to keep Allen on his current contract, then they would’ve carried him with a cap hit $34.7 million in 2024. If the Chargers really wanted to keep Allen, they could have done so, with $4.7 million in cap space to spare.

 

What Could Have the Chargers Done?

But what if they did not want to have a player on their roster who accounted for $34.7 million (more than 13.5% of the team’s entire cap space), what could they have done? There’s several options.

• Convert Roster Bonus to Signing Bonus

The Chargers could’ve easily converted a proportion of Allen’s 2024 monies into a signing bonus, which would have lowered his 2024 cap number. They could easily have converted his $5 million roster bonus, giving him the monies, and then utilize a “dummy years” tactic to lower the cap number (you can learn more about “dummy years” here).

If the Chargers had converted his roster bonus, only $1 million of those $5 million dollars would count in the 2024 season. That alone would have brought Allen’s cap hit down from $34.7 million to $30.7 million.

Of course, if Allen were to leave the team after the 2024 season the rest of that roster bonus ($4 million) would count against the 2025 salary cap.

• Convert Base Salary to Signing Bonus

Also, the Chargers could have converted a portion of Allen’s salary to signing bonus. Certainly, Allen would need to agree to that, but there’s a 0% chance that he would decline.

If the Chargers offered to convert, let’s say, half of his base salary ($9 million), that means Allen would get $9 million cash, immediately, instead of waiting to be paid those monies over the course of the 2024 season. That means only $9.1 million of the $18.1 million base salary would count against the cap in 2024 and the rest ($9.1 million) would be treated as “bonuses” that could be pushed into future seasons.

The player is going to say “yes” to that scenario every time. Allen knows that he could get injured in the preseason and then get cut by the team and therefore would never see a single dime of that $18.1 million base salary. Getting any portion of that base salary immediately is always advantageous for the player.

• Contract Extension

The team could also have signed Allen to an extension. They could’ve signed a two or three year extension that would’ve replaced the last year of his contract and kept him on the team in 2024, and maybe even 2025. They could structure the new contract to have a lower cap hit in 2024, lowering that $34.7 million number by a significant amount. They could then cut him at the end of 2025 and potentially take a dead money cap in 2026.

Of course, in all likelihood, the salary cap is going to be well over $300 million by 2026. The team will have a lot more wiggle room and latitude at that point, so pushing dead money cap hits into future years is smart (learn more about that here).

• Restructure Others Players

What if the ownership likes Allen and wants to keep him in 2024, but they think Allen’s skills are eroding and therefore they don’t want to be committed to him beyond 2024 season. Well, in that case, they could’ve very easily restructured other players on the team.

The Chargers have salary cap obligations over the next two or three seasons connected to 30 different players. I did a quick scan of all of the contracts and I easily identified at least a dozen players that are young decent players that likely could have had their contracts easily restructured to create anywhere between $25 and $30 million of additional cap space in 2024. The Chargers could’ve created the cap space and kept Allen on the roster at the $34.7 million cat hit number.

 

Real Reason Allen Was Traded: It’s All About the Cash

By converting Allen’s dollars to bonuses or by restructuring his contract, the Chargers could have significantly lowered Allen’s cap number of $34.7 million. But what would it take? Cash. Real dollars paid out to Allen.

Restructuring other players on the team would demand the same thing. Ownership would need to be willing to give those other players some amounts of monies today, to be paid out immediately, to enable the team to restructure those contracts that could create the additional space. Lots of teams do this.

Over the last 12–18 months we’ve seen the Eagles, Saints, Rams, Vikings, Broncos, Browns, Chiefs, and Dolphins all do significant restructures to several players’ contracts as they’ve maneuvered the cap. But in each case it takes cash. If the ownership doesn’t want to spend that extra money, then in many situations they cannot restructure the contracts.

Here’s the bottom line: If the Chargers’ management really wanted to keep Keenan Allen on the team, then he would be on the team. It’s that simple. The salary cap did not force them to trade Allen. The salary cap was not a handicap or hindrance to them in anyway whatsoever.

The salary cap is not a roadblock, it’s more like a slight speed bump that can be easily overcome.

Keenan Allen’s situation isn’t unique. There’s lots of players that find themselves in similar situations, being labeled as “cap causalities” when it reality, it was not the cap itself that led to their release or trade.

 

Is Keenan Allen Worth the Cash?

Well, obviously the Bears think so. They’re going to pay him $23.1 million this season. The Chargers did not want to pay him that amount. Maybe they thought he was not worth it.

I’ve watched a lot of Keenan Allen’s film recently. I think he was just as good of a player in 2023 as he had been over the last few seasons, and I see no reason for that to change in 2024.

Allen’s style of play has never been predicated on speed or quickness. He’s a precise route runner and a very smart player. He’s got good hands and good vision in the field. Those types of skills do not erode as a wide receiver gets older. Even if Allen loses a step, in terms of his speed and quickness, he’s the type of wide receiver that could easily be very effective well into his 30s.

 

Chargers’ Owners are Maximizing Profits

The Chargers’ owners, the Spanos family, seem to be maximizing their profits. They probably figure that they don’t need a guy like Allen to be profitable.

Whether Allen is on the roster or not in 2024, they’re probably going to make the same amount of money—they’re going to get the same amount of monies from television revenues with or without Keenan Allen, and they’ll probably have the same amount of ticket sales and merchandise sales.

If the owners do indeed care about winning, (which I question in the Charges’ case) they probably figure that they’re not going to win a Super Bowl in 2024 anyway, so in that case they probably don’t need Allen anyway. They probably think they’ll just draft another wide receiver at some point who will develop and when the team is ready to really take a step toward being a Super Bowl contender, then that new young wide receiver will be ready to step up at that time.

When we think about the entire situation, rationally and comprehensively, I think it’s unreasonable (and maybe even asinine) to claim that Allen was a cap casualty. It’s much more reasonable and accurate to say that he was a “cash casualty.” He was not traded because they lacked the cap space. He was traded because they didn’t want to shell out another $23.1 million if they didn’t have to.

The Chargers now have nearly $40 million in cap space? What will they do with this space?

Will they sign high price free agents? Obviously, that’s unlikely being that most high price free agent typically sign in early March.

Will they use that cap space to potentially sign current players to large extensions? Possibly.

Or will they simply cheap-out, like they have many times before? It’s possible they’ll simply refuse to spend the extra dollars and roll over much of that extra cap space from 2024 into 2025. That’s my hunch.

 

Is it Wrong for Owners to Maximize Profits?

Let me be clear, I don’t believe it’s morally wrong or unethical for NFL owners to maximize your profits. I’m a capitalist. I’m in favor of people making money. Absolutely!

But what I find offensive is the dishonesty behind how front offices talk about the finances of NFL.

Just be honest, come out and say it. The owners of the Chargers, the Spanos family, should just come right out and tell their fan base, “Yeah, we’re not going to spend more money because we don’t care about winning and we just want to make extra money!”

Team managers and owners perform these “dog and pony” shows. They use these cryptic statements which cause fans to believe that if the team were allowed to spend more money, then they would. The owners want fans to believe that if not for that salary cap, they’d be throwing money around all over the place. But that’s a lie, and situations like Keenan Allen’s situation can help expose the lie.

I don’t mind NFL owners making money. But I do mind being treated like I’m dumb. Please, don’t piss on my leg and tell me it’s rain!

If NFL fans know the truth and they still want to spend their money and time supporting that specific NFL team, that’s fine. I just think it’s valuable for fans to actually understand what’s really going on. That’s why this website exists. This is a public service. As I often say to my podcast cohost Walter Cherepinsky, I’m a man of the people.