21

March

Packers Contracts, the Salary Cap, and More – Part 2: A.J. Hawk and Contract Restructuring

packers_piggy_bankOne of the hardest things for the average fan to comprehend is how NFL contracts work and how they apply to a team’s salary cap. There are many complicated elements, rules, and exceptions that can be hard to sort out. In this series, my goal is to help you better understand how this whole system works, plus what it means to the Green Bay Packers’ current salary cap and contract concerns.

Before reading, make sure to check out the previous article(s) in the series:

Our second article focuses on A.J. Hawk and his current contract restructuring. Make no bones about it, this is a pay cut for Hawk; however, it’s not like he’s getting peanuts for the deal. The point of most restructured contracts is to take an original deal and adjust it for cap reasons. A lot of times, teams are looking to push money into the future for present cap relief, though it’s not unheard of to take advantage of current cap room and relieve some of the burden in later years.

We’re going to start by taking a look at Hawk’s original contract. If you’ll remember, the Packers cut Hawk in 2011 to avoid a $10 million base salary, only to turn around and offer him a new five-year contract. Take a look:

A.J. Hawk Initial NFL Contract, 2011-2015

 

He still got his $10 million that year (plus a little extra), but his cap number was much lighter, and his salary was reduced for the remaining years. An $8 million signing bonus was prorated over five years at $1.6 million per year. With added roster and workout bonuses, A.J. Hawk was looking to chop about $7 million off this current year’s cap number. As many fans have pointed out, that’s simply too much for his value to the team, and apparently the Packers front office agreed.

Now, the biggest problem is that the Packers couldn’t outright cut A.J. Hawk without a significant cap hit. His “dead money” was sitting at $4.8 million, which if you remember is the remaining three years of the amortized signing bonus. While the Packers could split that across two years by cutting Hawk after June 1st, it’s still a substantial chunk of change.

That said, it would still save them from a $7 million cap hit in the current year. A team might be willing to eat some dead money if it means freeing up a little extra and unloading a worthless player. The Packers don’t consider Hawk worthless, though.

So what to do? Get him to restructure the remaining three years. Here’s what happened:

A.J. Hawk Restructured NFL Contract, 2011-2015

 

What changed? Namely, the base salary. Hawk went from $4.9 million in 2013 to $3.6 million, and over the next three years his total base salary went down $4.5 million. They couldn’t do anything to lower the yearly cap hit from the prorated signing bonus, and they would have been foolish to touch the incentives, since it helps to keep the player working hard.

The only thing left was the base salary. But how did they get A.J. Hawk to accept such a pay cut? Obviously, he’s been known as a “team player,” yet no one is foolish enough to give up that much without something in return.

What this chart doesn’t actually show you is the fine details of the 2013 base salary. As reported in multiple places, there is $2.21 million in guaranteed money locked into that $3.6 million amount. That’s why you might have noticed the change in the dead money for this year ($4.8 M + $2.21 M = $7.01 M).

In simple terms, there’s no way A.J. Hawk is getting cut this year. His spot on the team is financially guaranteed.

So everyone got something. Hawk gets the comfort of knowing he’s got another year of employment, while the Packers get some more wiggle room under the cap. They also keep open the option of cutting Hawk in future years. Since they didn’t attach another signing bonus to the deal, there’s nothing to increase the amount of dead money and create problems later.

A.J. Hawk’s restructuring is a fancy way to say he took a pay cut, but the devil is always in the details.

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Chad Toporski, a Wisconsin native and current Pittsburgh resident, is a writer for AllGreenBayPackers.com. You can follow Chad on twitter at @ChadToporski

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12 Responses to “Packers Contracts, the Salary Cap, and More – Part 2: A.J. Hawk and Contract Restructuring”

  1. PatMc says:

    Nice write up. Now I understand what was in it for Hawk. I also think he is a lock this year and probably next (2014) unless traded. Doesn’t the league have new money after 2014?

    Like or Dislike: Thumb up 1 Thumb down 1

    • Dan "FireMMNow" Blakley FireMMNow says:

      there will be no spike in revenues after 2014. a lot of people reported there would be a spike in the cap in 2015 due to the new TV revenue, but that is not the case. the players got jobbed under the CBA. The cap is expected to be relatively flat for the foreseeable future despite the fact that league revenue will jump signficantly.

      Like or Dislike: Thumb up 0 Thumb down 0

  2. Razer says:

    While I am not a big Hawk fan, I am not a Hawk hater. It seems that the organization might have overpaid the man from the get-go. I generally trust TT with the future of the team but they have made some crazy deals. Chillar had an unreal contract. Tramon Williams and Woodson both have (had) unsustainable numbers as well. It is a tough business.

    One thing I will say about Hawk. Week in week out he plays, he tackles, he is in position and he keeps his mouth shut. Not the best LB but he is trying to earn his keep.

    Hot debate. What do you think? Thumb up 6 Thumb down 2

  3. Savage57 says:

    Hawk was born two generations too late. A lunch pail guy that coaches like Lombardi, Noll and Allen would have loved.

    Like or Dislike: Thumb up 5 Thumb down 1

    • Dan "FireMMNow" Blakley FireMMNow says:

      Lombardi still liked athletes. Hawk is an average LB and he would have been an average LB 50 years ago. Not sure Lombardi would like to watch AJ Hawk’s performance in any of the vikings games. The FB owned Hawk all game long, every game.

      Like or Dislike: Thumb up 1 Thumb down 0

  4. Chazman says:

    Just got done reading parts 1 & 2 and may I say thank you for providing insight into contracts, the cap and how they pertain to current Packer players.
    I rushed out and bought an AJ Hawk jersey when he was drafted, he hasn’t been the difference maker that we had all hoped for being drafted so high. But he’s been a solid football player, a great team player and I hope when its all said and done Packer fans will come to appreciate all he’s done for the organization.

    Hot debate. What do you think? Thumb up 5 Thumb down 2

  5. Ron LC says:

    Thanks again Chad. The Hawk negotiations exemplify the perpetual contract negotiations that will be the norm from now on. In that group of 40 or so mid to lowwer level players, some will go up and some will go down and some will be gone. Much to my dismay the “Negotiator” will be as importent a component of the team as the coaching staff and the scouts.

    Ball will become GB’s “Bernanke” moving around the QE3 monies to maximize the “Cap” levels at any point in time. And, like any financial/legal process the ones who can manipulate the exceptions will win.

    Just what the hell has happened to the NFL?

    Like or Dislike: Thumb up 0 Thumb down 0

    • Dobber says:

      It’s realized the economics of modern sports and knows that the health of the league rests in the potential for competitiveness across the board, and not a baseball model that stratifies some teams into insignificance.

      We might not like “capanomics”, but it keeps the NFL from devolving (excessively) into market-driven haves and have nots.

      Like or Dislike: Thumb up 1 Thumb down 0

      • Ron LC says:

        Ya, I know. I still miss the days of team identity and a hell of a lot fewer lawyers and accountants lurking around the locker room.

        Like or Dislike: Thumb up 0 Thumb down 0

  6. Mike Sherman says:

    I was sure there was no way Hawk was to remain on the team this year because I didn’t think they would agree on a cut in salary. While I still think he is overpaid, he did take the largest pay cut in team history so I can’t complain too much. That being said, Hawk will enter training camp the starter but if he gets hurt at all, he will lost his starting spot. I’m not sure who would be stepping up to take it, but DJ Smith, Terrel Manning, or this years high draft pick will all be as good or better, much cheaper, and probably force a turnover or two. Hawk’s spot on the team is safe this year but not his starting job

    Like or Dislike: Thumb up 1 Thumb down 2

  7. Zeman says:

    You knew it had to happen, Hawk is way over paid for the little they get out of him…..yeah…I know, “he helps in getting the defense set and does a lot of things “we” don’t see.” A lot of better players would do it for less. But good old AJ slides into another good situation. I wonder how much he’d get paid if they paid by talent? But I guess it was cheaper to keep the bustard. Oh well, another year of watching him bounce of tackles.

    Like or Dislike: Thumb up 0 Thumb down 0

  8. cpheph1 says:

    FWIW, I think Bob McGinn is a better cap source for Packers data than Tom Silverstein. McGinn reported the same $5.2m cap hit for 2013 but lower cap hits for 2014-15 ($5.1m each).
    http://www.jsonline.com/sports/packers/less-for-hawks-nest-egg-9k979sl-198900081.html

    Overthecap.com is listing the same totals that McGinn is.
    http://www.overthecap.com/cap.php?Name=AJ%20Hawk&Position=ILB&Team=Packers

    Regardless, I concur Hawk’s spot on the team is financially guaranteed…and he took a huge pay cut to ensure his spot.

    Like or Dislike: Thumb up 0 Thumb down 0