Free agency can be a feverish time of year. Often times information is pouring in as fast as you can handle it, while other times you seem to be endlessly waiting for specific news to drop.
This is especially true with player contracts. Sometimes it’s announced that a player has agreed to terms with a team and in a matter of hours the new contract information is available. Other times, you may have to wait days for information to surface.
As the details surrounding the Detroit Lions new contracts come in, we at Pride of Detroit do our best to explain them as simply as possible. While Charles Harris’ new deal uses a lot of common procedures, it also offers us a good example to revisit some of these practices and explain them a bit deeper.
Charles Harris — $3 million pay cut + game check bonuses
(Details via Overthecap.com, charts created by Erik Schlitt)
On Wednesday, it was reported that the Lions and Charles Harris had reached an agreement to reduce his contract by $2,823,529. This newly “renegotiated” deal is different than the “simple restructures” they have done in the past (where they push money into future years to free up room now) because this was a reduction in base salary along with a new bonuses added into the contract.
Let’s take a look at Harris’ old contract versus the new contract in the picture below:
As you can see, the base salary was reduced by $3 million, while Harris will have a chance to earn back up to $250,000 in game bonuses.
Now looking at the cap numbers between the two deals, you’ll notice that the new deal is not $3 million less than the old deal, despite that being the exact number being removed from the base salary. And the reason there is a difference is because of how the game bonuses are calculated.
Game Bonuses fall into a category of bonuses that factor in the likelihood of the bonus being achieved. If a bonus is likely to be achieved it is designated LTBE (likely to be earned), and if the bonus is not likely to be achieved it is designated NLTBE (not likely to be earned). To determine if, and how much of the bonus money falls into each group, the contract uses the previous year as a determining factor.
For game bonuses, because there are 17 games in a season, they take the total bonus that could be earned ($250,000) and divide it by 17, to arrive at approximately $14,706 per game.
Next, the contract determines how many games Harris was on the active roster last season and multiplies that number by $14,706. While Harris only played in six games, he was on the active roster through Week 12 before landing on injured reserve. Therefore, he is credited with 12 games, which takes us to the formula: 12 x $14,706 = $176,471.
Now, because $176,471 is LTBE, that amount counts against the Lions 2023 salary cap.
That’s why even though Harris’ contract was reduced by $3 million, it had $176,471 added back on due to LTBE game bonuses. Formula: $7,988,333 - $3,000,000 + $176,471 = $5,164,804 (new salary cap hit).
You may be wondering what happens if Harris ends up on the active roster for all 17 games and exceeds the LTBE bonus, or maybe, what happens if Harris is hurt in the preseason and never plays in a single game?
Well, all of those contractual adjustments are made after the 2023 season.
If Harris is active in all 17 weeks and earns both the LTBE and NLTBE bonuses, then the league will adjust the Lions 2024 cap by removing another $74,529—the remaining bonus money he was not expected to earn.
If Harris is never active for a single game and doesn’t earn the LTBE bonus, then after the season concludes, the Lions will get a $176,471 credit on their 2024 salary cap.
Bottom line with the bonus is, no matter what bonuses Harris earns or fails to earn in 2023, it will not impact the Lions’ 2023 salary cap, but, instead, will be part of the post-season adjustments ahead of the 2024 season.