The Indianapolis Colts made some big decisions this offseason involving the salary cap, and some of those decisions have left them with some dead money against the salary cap.
In one way or another, every team is dealing with the repercussions that come with guaranteed money in contracts. It usually comes in the form of dead money.
In this article, we’ll take you through the basics of what dead money means, where the Colts stand in relation to the rest of the league and how it impacts their moves going forward:
What is "dead cap"
First, it’s important to understand what the term “dead cap” or “dead money” means and how it impacts a team. Some teams get impact greatly while it’s an afterthought for others.
According to a 2022 article from The 33rd Team, here’s a solid definition of what dead money is and what it means in regards to a team’s salary cap:
Dead money is a salary cap charge for a player that is no longer on a team’s roster. The charge continues to count even though the contract of the player has been terminated or traded. Fully guaranteed money, prorated bonuses, termination pay, and injury settlements can all be included in dead money. Prorated bonuses are the most common form. Teams can spread finance charges over up to five years using prorated bonuses, such as signing bonuses, with a percentage of the bonus accounting against the cap in each year.
Proration becomes an issue when the player does not play to their expected level of play, and the team wants to move on. Per the Collective Bargaining Agreement, future charges accelerate into a current season’s cap if a player does not fulfill the entire term of his contract. Dead money can critically impact salary cap dollars a team can allocate to contributing players, therefore greatly affecting their ability to compete.
For example, if a player signs a 4-year contract with a $12 million signing bonus, the signing bonus would be prorated into $3 million installments each season for salary cap purposes. If the player underperforms in his first season, the team can terminate his contract early. However, if the team terminates the contract after the first year, the player’s dead money charge would be $9 million and would accelerate into a current season’s salary cap.
Essentially, dead money occurs when a team trades or releases a player who still has guaranteed money remaining on the contract. Because that money has been prorated over the life of the contract, it must account against the salary cap somehow.
How much dead cap do the Colts have?
According to Over The Cap, the Colts currently have the 11th-most dead money in the NFL at an estimated $24.9 million for the 2023 season. The New Orleans Saints are right behind them at $24.5 million.
The 10 teams ahead of the Colts are as follows, according to Over The Cap:
- Tampa Bay Buccaneers ($75.3 million)
- Los Angeles Rams ($74.2 million)
- Green Bay Packers ($57.1 million)
- Philadelphia Eagles ($54.7 million)
- Carolina Panthers ($51.5 million)
- Arizona Cardinals ($36.96 million)
- Tennessee Titans ($36.6 million)
- Houston Texans ($31.7 million)
- Minnesota Vikings (31.4 million)
- Las Vegas Raiders ($30.1 million)
Who are the biggest dead cap charges?
When it comes to the dead money, the majority of it incurred with the release of one player this offseason. It was a necessary transaction to make in order to move on from the disastrous 2022 season.
Here are the biggest dead cap hits the Colts have incurred for 2023:
- QB Matt Ryan ($18 million)
- RB Nyheim Hines ($3 million)
- CB Stephon Gilmore ($2 million)
- QB Nick Foles ($1.5 million)
How will this impact the Colts?
While incurring dead money is never an ideal situation for any team, the Colts have theirs well under control. The release of Matt Ryan was expected to bring along a pretty big hit, but the Colts are still holding the sixth-most salary-cap space, according to Over The Cap. So, they won’t be hamstrung if they want to hand out extensions to Jonathan Taylor or Michael Pittman Jr. this offseason.
