Glossary Entry: Voidable Year

The language of football is often confusing: play callsalignmentstechniques, and concepts litter the commentary and writing about the game. Inside the Pylon wants to aid in developing a deeper understanding of the game, so our glossary entries will offer clear explanations and video examples. We hope we can help you enrich your experience watching football.

“Voidable years” are years of a contract that automatically void on a certain date (often the first day of the new league year in March). Clever and cap-strapped teams like the Philadelphia Eagles and New Orleans Saints have put voidable years into contracts to help manager salary cap hits in recent seasons. Voidable years are a way for teams to spread a signing bonus over multiple years while effectively only giving the player a one-year (or other short duration) contract.

First, it’s important to understand that while signing bonuses are paid upfront (or over a matter of months), the cap hit can be spread evenly over the length of the deal. A $40 MM signing bonus on a five-year deal counts as $8 MM cap space each year rather than $40 MM at once. If a big bonus is tied to a short deal, however, teams can’t reduce the cap hit in this fashion. That’s where voidable years come in; by making the deal technically longer—even though the player will never play on the voidable years—they can spread out the bonus money and avoid a big charge.

The downside is that, if the contract actually does void, the team takes a cap hit for any remaining bonus, and the player becomes a free agent. This “dead money” can add up and make it a challenge to field a competitive roster, and they run the risk of losing the player in free agency. Accordingly, a team may try to extend the player before the void date to avoid the player hitting free agency and the dead money hit.

New Orleans quarterback Drew Brees was on the books for a big $30 MM cap hit in 2016, so the Saints signed him to a five-year deal that reduced his 2016 hit to $17.25 MM. That “five-year” deal voided after two years, however, but it still let the Saints spread his $44.25 MM in guarantees over five years rather than two. That left the specter of an $18 MM dead money hit in 2018, prompting another extension. It was initially reported as two years, $50 MM, but it also contained a voidable year in 2020. In 2019, Brees re-negotiated again, kicking bonus money into voidable years in 2020 and 2021. The end result has been manageable cap hits—under $20 MM in 2016 and 2017, and under $25 MM in 2018 and 2019—but eventually, the Saints will have to pay the piper. Brees has a $21.3 MM cap hit looming in 2020, and if and when he works out a new deal with New Orleans prior to his contract voiding, that figure will grow even higher. Eventually, the Saints are destined to pay Brees beyond his playing career, making it even more difficult to field a contender with the Hall of Famer’s successor. Still, the short-term cap savings help the team compete now.

For further reading on voidable years or any other contract / salary cap issue, check out Over The Cap.

The ITP Glossary was the branchild of Mark Brown. It wouldn’t be here today without the efforts of David R. McCullough.

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