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What are the financial ramifications of moving on from A.J. Klein this offseason?

If the Bills wanted to cut Klein to keep Milano, how would that work?

A.J. Klein was a key free-agent signing for the Buffalo Bills last offseason in their bid to replace the retired Lorenzo Alexander. He also saw a lot of time for an injured Matt Milano. It’s hard to imagine Buffalo keeping both at their expected salary-cap numbers in 2021.

One possibility for the Bills could be to move on from Klein and use the money saved in that transaction toward signing Milano long term. There are financial ramifications to that, however.

Klein’s signing bonus was very small, just $1.2 million, and spread out over the course of three years there is a very low dead-cap hit from that. It’s just $800,000 remaining in that pro-rated money. Where Klein’s big money came was in the form of guarantees, with $3.2 million of his 2021 salary guaranteed. To cut Klein would be a $4 million dead-cap hit in total. That saves $2.4 million on the cap.

Because it’s a contract guarantee, it would likely be lowered by the amount of salary Klein receives from another team if Buffalo was smart enough to write in offset language. In that case, if Buffalo owes him $3.2 million, but another team signs Klein after he is cut and they give him $2 million, Buffalo is then only on the hook for $1.2 million. What is Klein worth on the open market? That $2 million figure isn’t far off.

He turns 30 this offseason and the market for traditional linebackers of that age is very limited. Demario Davis turned in an All-Pro season at 30 before signing for three years and $27 million, but Klein isn’t close there. Sean Lee is a former All-Pro who made $4.5 million last year. Danny Trevathan signed for three years and $21 million, but that was an extension for good play with the Chicago Bears. Craig Robertson was just over $2 million at age 31. L.J. Fort might be the best contract comparison and he received a two-year, $5.5 million contract from the Baltimore Ravens a year ago.

Klein is also due a $1.6 million roster bonus on the fifth day of the league year. That’s the timeline we’re looking at for the decision. It’s meant to be a pressure point on the organization to make a decision.

Salary-cap ramifications of cutting Klein (numbers via Spotrac):

2021 cap hit: $6.4 million
Salary due: $4.1 million ($3.2 million of it guaranteed)
Roster bonus: $1.6 million million
Workout bonus: $100,000

Dead money if cut: $4 million
Cap savings if cut: $2.4 million (up to $5.6 million with offset language)

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