Extend Cousins or ... ?

The first wave of NFL free agency is over. While much of the news may have seemed underwhelming – with very few marquee players switching teams and/or signing big deals – there is always something we can learn from how teams operate. This offseason, we were exposed to more teams signing players to contracts that ended up being structurally different than they first appeared. Void years were the main reason for this phenomenon.

Void years are contract years on which the player will never play. They are placeholders for prorated signing bonus money, which can be assigned when the void years are created or created through a later contract restructure. Since a bonus can be prorated over a maximum of five seasons, the highest number of void years that can be added to a contract is five minus the number of years left on the contract the player is currently on.

Once a player reaches the void years portion of their contract and they are not re-signed to a new contract for that team, all the bonus money prorated onto the void years is accelerated to that year for cap purposes. For example, the current remaining contract for Vikings quarterback Kirk Cousins reads as follows:

2023: Base Salary: $10 million,
Prorated Bonus: $10.25 million, Cap Number: $20.25 million

2024 (Void): Base Salary: $42.5 million,
Prorated Bonus: $10.25 million, Cap Number: $28.5 million

2025 (Void): Base Salary: $42.5 million,
Prorated Bonus: $10.25 million, Cap Number: $0 million

2026 (Void): Base Salary: $42.5 million,
Prorated Bonus: $4 million, Cap Number: $0 million

2027 (Void): Base Salary: $42.5 million,
Prorated Bonus $4 million, Cap Number: $0 million

Some of the prorated bonuses ($6.25 million in 2023, 2024, and 2025) were left over from the 2022 extension of Cousins, while the remaining $4 million per year was from the 2023 restructure. All that void year money ($28.5 million) is set to count against Minnesota’s cap in 2024 unless Cousins were to sign another extension to stay in Minnesota, in which case they would simply tack onto a new deal’s cap hits in their respective years.

But there is a catch. Those base salaries in 2024-2027, which are effectively dummy numbers that will never be paid, set a cap for a possible future extension. Per the CBA, a player cannot sign a new deal that includes a raise within a year of signing another deal. Cousins’ new deal is, on paper, a 5-year, $200-million deal ($40 million APY), with a $20 million signing bonus (and $180 million in paragraph 5 base salaries), a mark that cannot be exceeded should he sign a deal to remain in Minnesota before the 2024 league year. Given the current market for starting-caliber quarterbacks in the NFL, this would seem to imply that Cousins is going to take a below-market deal or test the market in 2024.

This is an extreme example, but when it comes to learning about the NFL and its underpinnings, the extreme examples often reveal the most about the system. Void years give teams the benefit of extending competitive windows by having placeholders available to push money into the future. Such money can later be offset by cap rollovers when no such opportunities to capitalize on a window arise (see 2022 Cleveland). They also, through mechanisms like what the Vikings did with Cousins, provide front office initiated limits on what teams can do in the future with a player. These limits are likely easier to impose now than in the heat of negotiations in the future (see the 49ers negotiation with Jimmy Garoppolo as another example, where they effectively barred themselves from tagging him in 2023).

The drawbacks to void years for teams are intuitive. First, a player must agree to add void years to an existing deal. Unlike restructures, where there is normally language in a contract that allows a team to convert a roster bonus to a signing bonus regardless of a player’s wishes, a player must agree to the new deal, which could curb some of the team-friendly strategies clubs want to deploy when creating such deals.

The second drawback is even more straightforward; kicking the can down the road, while not in and of itself a problem when it comes to team building, leaves open avenues for teams to make decisions that are suboptimal. Thus, while it is true that any unused money in one year can be rolled over to the next (effectively cancelling out the money pushed into the future), in practice, relatively few teams operate that way (again, Cleveland being an exception). In many cases, unused cap space burns a hole in the pocket of the team builders (or their owners), and they end up paying for yesterday today.

The benefits for players, while less clear, do exist. Shorter deals can help a player more than a longer deal when the player remains healthy, continues to produce at a high level, and a market for their services still exists. The work of Kirk Cousins and his agent is a prime example of taking advantage of shorter deals. When Cousins signed a three-year deal that was fully guaranteed in 2018, many viewed the shortness of the deal as beneficial for the Vikings because the commitment was minimal. In practice, Cousins played well enough that, in each of his first two three-year deals with the Vikings, he was able to go back to the table and negotiate market-level deals with the club (at least the second time around the Vikings were able to tack on void years to smooth the hits out).

Contrast that with the contracts of some of Cousins’ contemporaries...