What effect does the June 1st release of Landon Collins have on a Terry McLaurin extension? Probably not much

Before the Landon Collins release is processed, Over the Cap estimates that the Commanders have about $7.4m in available cap space.

Since Jahan Dotson has already been signed, there will be only minor adjustments to this number when the other draft picks ink their contracts; right now, OTC has a $705,000 charge in place for each of them for the ‘22 season.

As you can see, when Landon Collins release is processed at 4pm today, the team will gain $11.88m in cap space for the 2022 season. That should mean that the Commanders suddenly have the cap space they need to extend Terry McLaurin, right?

Well, probably not.

I don’t mean that the team won’t have enough cap space available, because they almost certainly will.

What I mean is that there’s been no reason for the Commanders to have had to wait until June 1st to extend Terry McLaurin at all.

To illustrate what I mean, let’s take a look at another receiver that, like Terry, was drafted in 2019 and just became eligible for an extension in March 2022: AJ Brown.

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Brown was drafted by the Tennessee Titans. When he was traded to the Eagles during the draft, his rookie contract went with him to his new team. Philly made the blockbuster trade possible by agreeing to a 4-year, $100m extension with the young receiver — a deal that, at $25m per year — is certainly no less than the one the Commanders would offer to McLaurin; probably it is a bit richer.

So, that deal must have had a huge impact on the Eagles’ 2022 salary cap, right?

Not really.

Again relying on Over the Cap, we can see that the cap hit for Brown’s $100m contract is pretty modest in 2022.

In fact, Brown counts for just $5.6m against the Eagles salary cap this season. Howie Roseman did this by putting two void years on the end of the 4-year deal and using a staggered bonus structure, creating a structure that screams for an extension prior to the 2026 season.

Washington has used void years on 5 veteran free agent contracts since Ron Rivera’s arrival, after doing so only once (DeSean Jackson contract) in the decade before he came to DC. There’s no reason why the Commanders front office couldn’t have used the AJ Brown contract as a template for a McLaurin deal if they’d wanted to get him signed prior to OTAs.

The fact is, though, Washington doesn’t really need a lot of fancy structuring to sign McLaurin to an extension unless they are trying to free up cap space for other reasons, and, while the $11.88m will allow for a bit more wiggle room, it won’t really make that much difference. After all, the team needs to go into the season with a contingency for injury replacements of, say, $5m or so. That means that only about $6.9m of that Landon Collins money can be devoted to a Terry McLaurin extension or to signing other veteran free agents to fill out the roster.

What I’m saying is that on 31 May, the team had about $7.4m available to sign the remaining draft picks and extend Terry; tomorrow that number will be a bit over $14m. The difference is fairly minimal in terms of putting together a significant extension for McLaurin.

Let’s consider what it would look like if the front office were to sign McLaurin to a 4-year, $92m extension under two scenarios. In the first, the 2022 cap hit will be around $6m (which is a deal they could have signed before OTAs), while the 2nd will have a cap hit of $12m, which is only possible after the Landon Collins cap savings is realized.

First, here is Terry’s current contract:

Let’s add 4 years, taking the contract out to 2026, and let’s add $92m to the 2022 amounts that remain on Terry’s current deal.

McLaurin contract extension - pre-OTAs model

• In this model, I’ve lowered the 2022 salary to $1m, converting the remaining 1.79m to signing bonus.
• The total signing bonus in this model is $25m (including the converted ‘22 salary).
• As you can see, the new money of $92m + current 2022 value of $3.04m add together for the total value through 2026 of $95.04m.
• The 2022 cap hit is $6.25m, and no season has a cap hit in excess of $25.79m.
• The guarantees could be handled in many ways, but, for example, guaranteeing the ‘22 and ‘23 base salaries would result in a total guarantee of $40m ($25m bonus + $1 + $14m = $40m) or 43.5% of the $92m in new money.

Let’s see what happens if we increase the 2022 cap hit to $12m

All I’ve done in this model is the increase Terry’s base salary by $6m in 2022, and make corresponding reductions in the base salaries from ‘23 to ‘26.

As you can see, this year’s cap hit jumps to $12.25m, and the largest cap hit (2026) drops by $2.5m.

What happens if I increase the signing bonus instead of putting the $6m all into base salary?

In this model, I have pushed Terry’s bonus money up from $25m to $40m, and then reduced the base salary numbers by $3m per year.

As you can see, the cap hits don’t change from the previous model. Whether I give Terry the extra $6m in ‘22 cap hit as salary or as a combination of bonus and salary, we end up in the same place.

Of course, there’s a very real CASH difference between the three models.

• In the pre-OTAs model, Terry would get $26m in cash in 2022.
• In the post-June 1 “salary up” model, Terry would get $32m in cash in 2022.
• In the post-June 1 “bonus & salary” model, Terry would get $44m in cash in 2022.

The cash considerations are very real issues for the player and the owner, as are other issues like total guarantees, etc, but I don’t really want to delve deeply into any of that in this article.

My only point here is to suggest that fans probably shouldn’t expect a Terry McLaurin extension tomorrow just because the cap savings from the Landon Collins release will hit the books.

Without really making any effort, the Commanders front office could have fit a $23m per year extension for Terry McLaurin into the existing cap space anytime since the start of the new league year. If they had wanted to really minimize the ‘22 cap hit, they could have used structures like void years and staggered bonus payments that mirrored the Eagles contract with AJ Brown, which has $25m per year in new money.

Even now, with an additional $11.88m in cap space being added, the net change in terms of added front office flexibility is fairly negligible. If the front office takes full advantage of the added cap space, it probably only changes the worst single season cap hit (2026 in my models) by $2m - $3m.

The fact is, the Commanders could have signed Terry McLaurin to an extension at any time since mid-March, but they haven’t done so. The Landon Collins release is fairly insignificant in terms of what it means to the team’s cap flexibility, and doesn’t really change the algebra much for a Terry McLaurin extension.

The McLaurin deal will get done (or it won’t) on its own timetable that is probably driven more by negotiation between the front office and the player & his agent over Terry’s value to the team than by the timing of the Landon Collins release.

As I’ve mentioned repeatedly, the team can create up to $18m at the stroke of a pen by doing a maximum conversion of Carson Wentz’s 2022 salary into signing bonus. If they’d wanted to, they could have created $12m in savings that way if it was needed for Terry, and then made up for it by simply rolling over the $11.88m savings from the Collins release to 2023, leaving them in exactly the same place cap-wise.

I’ll be as pleased as anybody if the team announces on the morning of Thursday, 2 June, 2022 that they have extended Terry McLaurin’s contract, but I don’t believe it will happen that way because I don’t believe that there’s been any salary cap related obstacle to getting an extension done before now. I think this is another NFL contract with millions of dollars at stake that will take some time to negotiate — and that process will test the patience of fans who want it done as soon as possible. Remember that Jonathan Allen’s contract extension was announced the day before training camp started last year. If you are expecting an announcement on the contract this week, I fear you could be in for a long and unpleasant 6 weeks between now and the start of training camp, which is probably the practical deadline for getting the deal done.