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What Does All That Cap Space Really Mean for NFL Teams, and How Should They Use It?

The Colts came into free agency with over $100 million in room and big expectations. But as they’ve played things conservatively, Indy has illustrated the value in using that financial flexibility with patience and creativity.

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After years of toiling in the NFL’s no-man’s-land, the Miami Dolphins finally have a plan. Former executive vice president of football operations Mike Tannenbaum is out of the picture (he was “reassigned” within the organization in December), and general manager Chris Grier and first-year head coach Brian Flores seem ready to tear down the roster and start from scratch.

That approach led Miami to trade quarterback Ryan Tannehill to Tennessee last week for a fourth-round pick. In his place, the Dolphins signed 36-year-old Ryan Fitzpatrick to a two-year, $11 million deal. Compared to other starting QBs in the NFL, Fitzpatrick’s contract is dirt cheap, and it fits the pattern of the rest of the front office’s spending this spring. Before Fitzpatrick agreed to his deal on Monday, Miami’s two most significant signings—tight end Dwayne Allen and cornerback Eric Rowe—had been given less than $2 million in guaranteed money combined. By not delving into the fray, Grier has ensured two things: that Miami will get a third-round compensatory pick next season for former right tackle Ja’Wuan James (who signed a market-setting four-year, $51 million deal with the Broncos), and that when the 2020 offseason begins, the rebuilding Dolphins will likely have more cap space—around $108 million, based on Over the Cap’s projections—than almost any other team.

As analysts and fans talk about the Dolphins’ outlook over the next year, that number will come up often—just as the Colts’ $100 million–plus in cap space became a popular talking point near the end of 2018. But while many expected Indianapolis—which was coming off a surprise playoff berth under a first-year head coach and had money to burn—to be big spenders in free agency this year, the team has handed out just $41.5 million, the seventh-lowest total. So if the Colts weren’t planning on making a splash in free agency, it’s worth asking: What’s the point of having all that space?

One reason the Colts may not be doling out money left and right is that these deals aren’t just numbers floating around salary cap sites. Each significant free-agent contract comes with considerable cash payouts in the first year—and when teams sign a few of those deals in one offseason, it gets expensive. Take the Bills, for example. They’re on the hook for more than $75 million in first-year cash on the deals they’ve handed out this spring, which is the highest number in the league. Over the Cap’s Jason Fitzgerald found that while Buffalo has been willing to spend upward of 100 percent of the cap figure in recent years, the Colts have hovered in the 80 percent range during the first two years of Ballard’s tenure. Pretty much any team with $100 million in space wouldn’t commit $100 million in cash that year, but the Colts are even less prone to doing so than most teams.

Beyond the team’s practical budget, though, Ballard has also taken the opposite approach of other franchises that came into the offseason flush with money and used it with little regard for long-term consequences. The Jets have handed out $116.5 million in guarantees already this spring, the Packers spent a staggering $67.5 million in first-year cash on their new deals, and Oakland has committed to more than $69 million in guarantees on the seven new contracts it’s handed out. It’s nearly impossible to find real value when that type of money is being thrown around, and it probably won’t be long before all three teams are looking at their books and wondering how quickly they can move on from the megadeals that are eating up their budgets.

So since Ballard and the Colts aren’t going to burn money, the real advantage of all that cap space is the flexibility that it provides. Having that kind of room leaves virtually any move on the table. Consider some of the moves that have happened over the past few weeks. Oakland and Cleveland swung trades for Antonio Brown and Odell Beckham Jr., respectively, and those teams had about $73 million (Raiders) and $71 million (Browns) in cap space at the start of free agency. Buffalo, another team that tried to pull off a deal for Brown, had about $76 million.

When John Dorsey took over as GM of the Browns in late 2017, he was walking into a scenario with every team-building resource at his disposal. Cleveland had more cap space than any team in the league, and Dorsey used that to institute the first stages of his plan to reshape the Browns’ roster. He traded for quarterback Tyrod Taylor, which ensured that Cleveland would have a bridge option and could be patient with first overall pick Baker Mayfield. The team also signed Jarvis Landry to a five-year, $75.5 million deal that shattered the slot receiver market, and it fortified the offensive line by giving right tackle Chris Hubbard a five-year, $36.5 million contract. Dorsey used his space gradually, adding a few key contributors and building an infrastructure for his rookie quarterback while still carrying plenty of money over into this season. By not burning through his cap space in Year 1, Dorsey left himself enough financial wiggle room to trade for both Beckham and pass rusher Olivier Vernon (the two will count for a combined $32.5 million against the cap this year), and sign free-agent defensive tackle Sheldon Richardson to a three-year, $37 million deal.

Cleveland may be the best recent example of what salary cap flexibility provides a front office, but it’s far from the only one. The 49ers had significant room when they traded for Jimmy Garoppolo midway through the 2017 season, and that space allowed San Francisco to creatively construct their QB’s contract to avoid huge cap hits and tons of guaranteed money in later years. Garoppolo’s 2020 cap hit is set to be $4.4 million less than what Kirk Cousins will get from Minnesota, and after this season, there’s only $4.2 million in dead money remaining on his deal. That flexibility has allowed the team to heavily front-load its deals and reduce its risk. (And like the Browns, it also paved the way for the team to land pass rusher Dee Ford via trade.)

As the Colts continue to shape their roster and the Dolphins enter the early stages of their rebuild, it’s important to remember that financial leeway is the biggest positive of having massive amounts of cap space. Just because a team has close to $100 million in room doesn’t mean it should scoop up as many free agents as possible when the market opens in March. It means the franchise can think long term and use that space creatively. That’s one of the key lessons that successful rebuilds like the Browns have shown us, and it’s one that the Dolphins’ brass should take to heart.