The NFL league year started yesterday, March 9th, and that was covered up by the shocking news between the Houston Texans and Cleveland Browns. The Houston Texans offloaded the Brock Osweiler contract to the Cleveland Browns in a rare NBA style salary dump transaction. There are many angles to this NFL transaction; but let’s examine the consequences towards the salary cap.
Osweiler was scheduled to count $19 million against the salary cap for the 2017 league year. This consisted of a fully guaranteed $16 million salary and $3 million signing bonus proration. With the trade to Cleveland the $16 million salary transfers to Cleveland who is now solely responsible to pay it. There was $9 million in remaining signing bonus proration which now accelerates into the 2017 salary cap. Brock will have received $21 million from the Texans for 1 year of service.
Initial $19m charge – $9m dead money charge = $10 million in salary cap savings.
Thoughts (subject to change as I ponder this move in the coming weeks)
One thing that gets lost in all of this is the Texans eliminating $16 million in cash. Think about that…$16 million. Yes I know this is a billion dollar team, but $16 million is a huge chunk of cash to avoid having to pay. That money was sitting in escrow on a payment schedule for the 2017 season for Brock Osweiler. Now it is available to use for other player signings.
The Texans sent their 2018 second round draft pick to Cleveland. That pick could range anywhere from #33 to #64. Also the Texans received the #142 (4th) from Cleveland and sent their #188 pick (6th) to Cleveland for the 2017 draft. To summarize the Texans gave up a future second round draft pick but moved up 46 spots in the draft, to save $16 million in cash and $10 million in cap.
Is $16 million the true cost of a second round draft pick? I don’t think we can answer that just yet. I had briefly spoke to a few trusted people back in January concerning this subject. I asked the question…what kind of draft compensation would the Texans need to offer to unload the Osweiler contract? The common answer was “no clue”. But after further discussions with Chase at Football Perspective we both felt that it would take a first round draft selection to pull this off.
Reports have Cleveland looking to trade the Osweiler contract again to gather more draft picks, and if that does not happen they will release Osweiler outright. Cleveland is looking to take on $8 million of the $16 million guaranteed salary (via bonus conversion) in exchange for a 3rd round draft pick; Cleveland would also include one of their late round draft picks. Essentially Cleveland is looking to pay $8 million for a third round pick.
If that were to happen Cleveland would have only spent $8 million for a second round pick and a third round pick. However I don’t think Cleveland will be able to move Osweiler contract again for a third round draft pick.
Why didn’t the Texans do a salary conversion to trade a lower draft pick? I don’t think Cleveland was interested in anything below a second round draft pick. The only way this was going to work for Cleveland was to include the second round draft pick. And to be honest I am not sure the Texans would have taken on $8 million in salary for a third or fourth round pick.
In the end I feel this is a win win for both sides involved. Cleveland received their valued draft asset. Houston eliminated a bad decision, saved $16 million in cash and $10 million in cap.
I feel it is worth noting how quickly the Texans moved on Osweiler. The initial signing was penned as a two year deal with two more “we’ll see” years, totaling 4 years. All offseason my thought on Osweiler was either trade or retain…release didn’t make sense for 2017. The Texans recognized this was a mistake, and paid the price to eliminate that mistake. $21 million dollars later along with a future second draft pick sized mistake. This does give me continued hope for the team going forward. Not only did they make a big move to bring in a QB in 2016, as well as other players…they were quick to move on from player when it wasn’t working. The Texans have never been a team that won’t spend for players. This is another example of that, and how the team will continue to work to find their franchise quarterback and churn the roster for improvement.
The next phase of this exercise is what will the Texans do with the newly available cash and cap? Stay tuned…