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Here's how Justin Houston's contract improves Kansas City Chiefs salary cap situation this year


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OK let's lay all this out in English. All numbers are approximate and based off these reports as I haven't gotten my hands on the actual contract yet.


Houston was set to count $13.2 million against the Chiefs cap while under the franchise tag. This new contract will lower his 2015 cap number. His signing bonus is reported to be $20.5 million which, if his first year haul is $21.5 million, means that his first year base salary is about $1 million.


 



A $20.5 million signing bonus will be pro-rated over the life of the contract (five years) so that becomes roughly $4.1 million per year in cap space. That $4.1 million plus his $1 million base salary equals $5-something million for his first year cap number. Subtract that from Houston's initial $13.2 million cap number and that's how the Chiefs will gain roughly $8 million in cap space (if these numbers are correct).


"I feel that we have enough flexibility to where we'll be able to do more deals," Chiefs GM John Dorsey told us in a conference call following the announcement of Houston's deal.


The Chiefs like to enter the season with about $10 million in cap space to allow them to stay flexible. They could have one of their own players injured and need the money to sign someone else. Or another team could surprise everyone and cut a very good player that the Chiefs want to sign. Whatever it is, the Chiefs need some cap flexibility during the season. And now they have it.


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I thought the following information from Eraser would be good for this thread:

 

The Chiefs would have had to pay JH $13.195M this year, at least 120% more next, and another 44% increase if they had to tag him a third time.

 

2015 - $5.1 instead of $13.195

2016 - $19.1 instead of $15.834

2017 - $20.6 instead of $22.8

2018 - $19.1 instead of gone

2019 - $19.6 instead of gone

2020 - $17.5 instead of gone.

 

The signing bonus is spread over the first four years. Therefore, the Chiefs can reduce lower future cap hits by converting salary into bonuses.

 

The Chiefs pay $7M less in the first three seasons than if they had tagged him consecutively.

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The Chiefs are going to add one or two more players this year. They have $8 M in cap relief this year. Dorsey could have created $2 M in cap space. That would have been enough to overcome injuries, and pick up a player or two during the season in case things go wrong. No, he did not just opt for $2 M... he went for $8 M. That means something is in the works. 

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Not sure cap going up helps? Every team gets that bump so players win a larger share and more competition for free agents.

Everyone always mentions the cap going up as if it's going to help us but nobody else. They also mention it as if the team knows they have more money but the players agents don't know that. Players are going to ask for more and other teams will have more money, too.

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