Saturday, August 30, 2014

The NFL Sign-and-Trade

The Texans' Andre Johnson, tired of his team's perpetual rebuilding, has requested a trade.  Houston can hardly afford to trade him though, because while getting rid of Johnson would save them having to pay his $15.6 million salary, it would also add almost $12 million in dead money to their salary cap (ignoring for now the post-June 1 split rule), leaving a net savings of only around $3.7 million (hat tip to the excellent website overthecap.com).  Replacing anything close to Johnson's production for only $3.7 million would be impossible, so Houston is forced to keep their unhappy player. 

The Johnson example shows how the rules governing NFL player contracts help make trades rare, especially for star players with large contracts.  When they do happen, trades tend to involve players near the end of their contracts who are at risk of being cut outright.  With some careful contract structuring, however, a trade could allow two teams to capitalize much more on their individual resources in a way that would benefit both teams, and the traded player.