Aaron Hernandez: Future Salary Cap

Jun 20, 2013; North Attleborough, MA, USA; Media stake out the house of New England Patriots tight end Aaron Hernandez in North Attleborough, Mass. Mandatory Credit: Winslow Townson-USA TODAY Sports

With the myriad off-field issues faced by New England Patriots tight end Aaron Hernandez causing concern for the Patriots coaching staff, fellow players, and fans, there remains the possibility that the situation could further explode in the next few days and see the Patriots spending significant time without their multi-use tight end. With fellow tight end Rob Gronkowksi already having had five surgeries since breaking his forearm during the 2012 season, Hernandez–despite off-season surgery of his own–was expected to pick up the slack on offense if Gronkowski was unable to perform for any extended period of time. Now, Hernandez is an unknown heading into training camp as the recent issues (see MusketFire’s coverage and analysis of the news on Hernandez to date here, and check back to the website for additional updates as the story develops) play out. With his role in mind, there are a couple of worst-case scenarios–suspending, releasing or trading Hernandez–which raise a number of questions that need to be analyzed:

The first question with Aaron Hernandez and his salary cap ramifications stems with a suspension. In the event the player is suspended, by the league or the club, he is placed on the reserve/suspended list. The reserve indicates the player was not released by the club (his roster spot is reserved for him when the suspension ends).  There has been some dispute as to if a player is suspended by the club if he counts against the cap or is still paid. In reviewing the NFL Bylaws regarding the Reserve/Suspended by Club designation, it indicates that the player can be suspended by the club for “violation of the National Football League Constitution and Bylaws, his NFL Player Contract, or the rules and regulations of the League or the club.”

This allows the club to suspend a player prior to discipline (or in addition to) from the NFL offices.  In either case, the claimant is basically sent packing. The NFL Bylaws indicate “a player shall not be entitled to compensation and shall be ineligible to practice, play, attend practice or team meetings, or use the club’s facilities.” In this case if he is on the Reserve/Suspended by Club designation, he does not count against the team’s active roster.

This being the NFL, the salary cap implications are where things get muddled.  When a player is suspended–either by the team or by the NFL– their base salary is off the books and does not count against the salary cap.  This is because they are not an “active” player per the NFL. However, the rest of their money does continue to count against the cap.  This other money includes the prorated portions of the signing bonuses, workout bonuses, roster bonuses, etc. Hernandez’s base salary in 2013 is $1. 323 million.  Factoring his prorated signing bonus from his contract extension signed in August 2012, his cap number this season is just north of $4 million. Basically, the base salaries were kept intact on his rookie deal that ran through 2013 and they team tacked on a 5 year extension with a $12.5 million signing bonus and $16.4 million guaranteed.

Oct 14, 2012; Seattle, WA, USA; New England Patriots tight end Aaron Hernandez (81) celebrates a touchdown reception. Mandatory Credit: Joe Nicholson-USA TODAY Sports

If the Patriots decide that tight end Aaron Hernandez is not worth the headache, and release him outright, that recent signing bonus is the big albatross on the team’s salary cap.  They can accelerate it to this season if there is space and not spread it out, or take the hit across the length of the contract. The good news is that there are no future options built in the contract or guaranteed monies due to vest in the future.  That up-front loading of the contract makes it advantageous to the Patriots if Hernandez is released or traded in avoiding more hits to the cap down the line.

Of course, as they did with 2012 free agent bust defensive tackle Jonathan Fanene, the Patriots would have the legal right to go after his previously paid bonuses and attempt to  recover money already paid to him if he is released. The Patriots may get credits across the years of the contract if they can successfully challenge him for these bonuses already paid.

Ultimately, releasing or trading Hernandez this season would be difficult due to that signing bonus, as the acceleration would result in over $12.5 million in dead money (the team would likely suspend him for the year before taking on that hit) and then finding themselves trying to spread out almost $8.5 against the salary cap.  Suspending him this year saves the base salary money ($1.323 million) against the cap and releasing him after this season allows them to almost halve the dead money and cap charge.  So for the Patriots, keeping Hernandez this season, even if the club or the league is suspending him for the year, makes the most fiscal sense.  Beyond this year, the penalties are less and the team should be able to absorb any cap issues and move forward without him if necessary.