So, how exactly does $40 million dollars a year in average value actually end up with a salary cap hit of less than half that number?
That was a big question when Giants general manager Joe Schoen met the media on Wednesday, after inking Daniel Jones to a four-year deal worth $160 million just ahead of Tuesday’s 4 p.m. deadline for franchise tagging players.
“The way we did Daniel’s seal, the signing bonus spreads out over four years, so his base is $9.5 million plus part of that $36 million,” Schoen said. “A signing bonus allows you to spread the money over the length of the contract up to five years, and that’s how you’re able to lower what counts against the cap.”
Indeed, the way the contract is structured was laid out by Mike Florio of Pro Football Talk – you can see it here, but as Florio noted, “it’s basically a three-year, $112.5 million contract, given that the $47.5 million due in 2026 is not guaranteed,” and that “the Giants also could escape the deal after two years, with $82 million paid.”
Jones will account for a little more than a third of the Giants’ projected cap space, and the same could go for Saquon Barkley, who was franchise tagged for $10.1 million but could end up with a lower number if he and the team agree to a longer-term deal at some point – and the Giants could also get creative, Schoen said, by extending someone like Dexter Lawrence, who is on his fifth-year option.
“We’ll see what happens with Saquon, the franchise number is just over $10 million, but if you extend him, with the signing bonus, you can free up money,” Schoen said. “Same with Dexter Lawrence, he’s on his fifth-year option, but we can lower that with an extension and a signing bonus.”
Another thing that can affect the Giants’ cap situation, either now or in 2024, is how they choose to handle Kenny Golladay. They are going to release the wide receiver, but if they do so, they can designate him as a pre-June 1 cut or a post-June 1 cut, a choice that has significant impact.
If they do it as a pre-June 1 cut (i.e. when the league year starts), the Giants will save $6.7 million in cap space while leaving $14.7 million in dead money on the cap. If he was post-June 1, they can split the dead cap hit over two years, so they’d have an extra $7 million now, but $7 million less next year.
In that same press conference, though, Schoen intimated the Giants prefer the former, often using the term “taking our medicine” when referring to the Golladay cap hit.
“It’s been kind of a wait-and-see until we knew where we landed with Daniel and Saquon, and now we have meetings leading up to Monday when conversations start,” Schoen said. “With Kenny, there’s a good chance we just take the hit this year, because we already have some dead money in 2024 we needed to kick forward to get things done this year. If we can take our medicine this year, that will hopefully help us in 2024 and get us out of the business of having a lot of dead money.”
Sure, the advantage to a post-June 1 cut is extra cap space now, but the Giants know what they have now versus not necessarily knowing where they’ll be in terms of that situation a year from now.
“You could be sitting there 12 months from now with $17 million in dead money, and have Andrew Thomas or Xavier McKinney or someone we want to extend, or want to go outside the building,” Schoen said. “If we have the flexibility to take our medicine this year, that may be better, but we have until next Wednesday to make that decision.”
One thing is for sure, though: Schoen is happy to be in a much better financial position at the start of this league year than he was at the start of last year.
“We’re trying to build and upgrade our team in all three phases, and it’s nice to know we have the draft capital and financial flexibility we have now that Daniel is in place,” the GM said. “We’re not shopping for minimum depth anymore, we can map things out and procure talent now that maybe we wouldn’t be able to in the past.”
Even with that said, the Giants will be smart in free agency, and Schoen still plans to rely heavily on the 2023 NFL Draft to start putting more pieces in place.
“We’re not sure where certain players will be from a contract standpoint, but we will be fiscally responsible with the moves we make,” Schoen said. “You have to make sure you’re smart on the character and the medicals, so we have to be diligent with our research. We have some players targeted that can make impact if the contract structure is right, but we also have Plans B, C, and D if we need it.”
Follow Lou DiPietro on Twitter: @LouDiPietroWFAN
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