Math Of Khan – How The Steelers Trimmed Over $23.5 Million Off The 2013 Salary Cap

Over the course of the last several weeks Omar Khan has cleared $23,578,750 off of the Pittsburgh Steelers 2013 salary cap with just four contract restructures and one contract termination. Several months ago I laid out the course of action that Khan would take to clear around $20 million of cap space via four restructures. While I didn\’t nail the amount on the head, I did nail the four players he would restructure and the general course of action.

As I do every year, here is a recap of how that was done and what it means to future cap years as a result.

Linebacker Lawrence Timmons was the first to have his contract restructured. He had $4.625 million of his $5.375 base salary that was due him in 2013, along with his $2.5 million roster bonus due, turned into a signing bonus. That $7.125 million was prorated out over four years, starting with this year, at an amount of $1,781,250 per year. The move cleared $5,343,750 million in 2013 cap space.

Next up on the restructure platform was wide receiver Antonio Brown. He had $1.35 million of his 2013 $2 million base salary along with his $2.5 million roster bonus due him turned into a signing bonus. That $3.35 million was prorated out over five years, including 2013, at a year proration cap charge of $770,000. That restructure lowered the 2013 cap charge on Brown by $3.08 million.

Quarterback Ben Roethlisberger was next up and he had $9 million of his 2013 $11.6 million base salary that he was scheduled to earn turned into a signing bonus via the restructure which produced $3 million in proration over three years including 2013. That cleared $6 million in cap space for 2013.

Last up was linebacker LaMarr Woodley. He had $5.4 million of his $9 million base salary that he was scheduled to earn in 2013 turned into a signing bonus and that cleared $4.05 million in 2013 cap space by doing so. That produced a proration amount of $1.35 million over four years including 2013.

The last move that needed to be made was the contract termination of linebacker James Harrison, who had a base salary of $6.57 million due him and a 2013 cap charge of $10.035 million. The termination of that contract meant that all of the proration from his original signing bonus and restructures needed to be charged off immediately. That dead money charge was $4.93 million and produced a cap savings of $5.105 million after the smoke cleared.

As you can see, those five moves total up to $23,578,750 in 2013 cap dollars being cleared.

So what did all of these restructures do to future years? It added $6,901,250 in proration cap charges to both 2014 and 2015. $3,901,250 in 2016 and $770,000 in 2017.

Now here is something to keep in mind concerning 2014. Harrison was scheduled to count $9.04 million against the cap in that year. The four restructures combined with his contract termination actually resulted in a decrease in 2014 of $2,138,750.

We are not done yet, however, as guard Willie Colon was released with a post June 1st designation earlier this week. The Steelers will not see the $5.5 million cap savings from that release until June 2nd. At that time a $4.3 million dead money charge will be added onto 2014.

If you are scoring at home, those five moves will have cleared $29,078,750 in 2013 cap space and also cleared $5,488,750 in 2014 cap space because of the release of Harrison and Colon, who were combined scheduled to count $16.69 million against the cap. It should be noted that Colon was also scheduled to count $8.15 million against the cap in 2015, and now that number is also erased from the books completely.

Once again, I hope you can see how a pen and the “Math of Khan” worked this off-season. This is the kind of stuff that keeps a bi-polar person with OCD and ADD like myself occupied. It also, however, contributes to severe insomnia.

The Math Of Khan

I am, I'm me. 40 something, retired and a life long Steelers fan.
  • Mike O’

    How is a $4.3 million dead money charge in 2014 for Willie Colon a good thing as you suggest? Willie’s salary was restructured several years ago using this “Math of Kahn” that you praise here. As Willie’s contract shows, all this prior “hocus-pocus” type financing was just delaying the inevitable consequences of dealing with a bad contract situation. This is why the Steelers are only one of 4-5 teams out of 32 in the NFL using this type of CAP compliance scheme.

  • mokhkw

    Dead Money is never a good thing, but with the new CBA rules about having to be within 10% of the total cap, I don’t think it has quite the same impact as previously. Cap is around $120mil so you can “afford” to have about $12mil in dead money without it affecting how much you are willing to spend on players. On the flip-side of this, teams who are too far under the cap will have to overpay some players or sign FAs who aren’t really wanted. Essentially the days of saving $s on the cap are over with this new CBA, even if your team is average you’ll still have to pay them the same total amount as a good team has to.

  • Dan

    While I don’t like the idea of moving so much money to future years with these restructures, I guess it is good to hear that the savings from Harrison and Colon more than made up for it. I still wish it was more of an optional decision rather than a necessary decision though. Thanks again Dave for the great reporting!

  • alex

    Khan is the hardest working man in the organization…now he can take a break…

    and then there’s the second busiest guy around, thats you DAVE…shout out…beer money coming soon…

  • SteelerDave

    Those savings by Khan would buy at least 3.1 million six packs of beer.

  • RW

    He was scheduled to count ~8 mil against the cap in 2014, so there is a net deduction here. Dave didn’t imply the dead money charge was good, but that cutting him was good overall for 2014. Even with the restructures, we cleared cap space for next year. Better than I originally thought.

  • TsarPepe

    Or you can have 25 Spaeths. Take your pick!

  • hergieburbur

    He got us under this year, but we are still in cap hell until the cap goes up. This is mostly just a delaying tactic hoping it doesn’t catch up with them.

  • steeltown

    Yes, but keep in mind that a few more highly paid players (Ike Taylor and Troy Polamalu) will be gone in a year or two.. I know that by that time Pouncey and some others will be given contract extensions, but their cap hits will not be as detrimental as the current veterans.
    We overpaid to keep our SB Team together… soon all those players and their high back ended contracts will be no more

  • http://www.facebook.com/thagrimmreaper13 Rob Grimm

    If Sanders leaves, I feel it signifies that there is more wrong in the Steeler locker room, and front office than meets the eye. In the past, the tradition and respect putting on the black and gold garnered usually meant more to players than grabbing a few extra bucks. I think Emmanual even testing the idea of leaving for more $ shoes the beginning of the end of that loyalty. As for the front office, maybe Sanders’ agent is able to foresee even worse financial issues in the future, thus pursuading Emmanual to get out now so hes not stuck on a team with a mix of proven veterans but no top young talent, bc they cant afford good young talent. He doesnt want his clients bright possibilities to be held back by a rebuilding mess. It doesnt take a sports management major or a hedge fund analyst to know that these contract restructurings are only taking this years salary cap issues and spreading them out over the next 3-4 seasons. Which means a near future full of uncertainty for a lot of the
    young guys who are set to break out during that time frame. And Emmanual Sanders is the first to recognize this, and is taking advantage of his worth now, for fear of that worth taking a hit by a franchise in confusion. Just a little devils advocated thinking.

  • hergieburbur

    And that is the part that falls under “delaying tactic hoping it doesn’t catch up with them”. They clearly tried going to one or two more rings, and Khan has been brilliant at keeping the guys we have, but there has been a cost as well.

  • steeltown

    Agreed

  • charles

    The math of khan is pretty good. This article is great and explains a lot of the FOs behavior.