On Wednesday, the Buffalo Bills restructured safety Micah Hyde’s contract to spread out his salary-cap hit over multiple seasons. With only two years left on his current contract, Buffalo wanted the benefit of the maximum amount of salary-cap relief, so they added three void years to the deal, making the entire contract five full years.
Contract restructures
Contract restructures like this take money already allocated on the books in roster bonus and base salary and reallocate it. It makes the player happy because they get all of their money up front and it makes the team happy because they get to clear cap space. These restructures are only done with players that the team knows are going to be on the roster for the season (and usually multiple seasons) and often times they are completed on players who already have guaranteed money on their deals. Because the money is already guaranteed, it just accelerates when it’s going to be paid.
Buffalo has done this in the past with other contracts including Hyde’s, but typically they just keep to the current length of the deal. If there are three years left on the deal, they spread it out over three years. What’s different now is they are using void years.
Void year
Void years are dummy seasons added to the end of the contract. A signing bonus is pro-rated over all the remaining years of a deal up to five years, so by adding years, you can spread out the cap hit across more seasons.
For Hyde, he had two years left on his contract (2022 and 2023) so they added three void years on the back end (2024, 2025, and 2026). If he is still on the roster with a new contract extension, those cap hits will toll equally among all five seasons. If he retires or is not re-signed, they will accelerate to count during the next season.
Hyde’s example
For Hyde, he was due a $2.5 million roster bonus and $3.7 million of his $4.3 million salary was set to fully guarantee this weekend. That’s $6.8 million in compensation for 2022. Instead, Buffalo reduced his base salary to the veteran minimum ($1.12 million) and pro-rated the remaining $5.68 million over the remaining years left in the deal.
If they didn’t use the void years and instead split it into the two remaining years on his old contract, it would have been $2.84 million in each season. His cap hit would have been $6.86 million, a cap savings of $2.84 million.
By adding the three void years, they took that $5.68 million and spread it out over five years instead of two. That makes the cap hit $1.136 million in each of the five seasons and saves Buffalo $4.544 million on their cap in 2022.
That’s a difference of $1.7 million between using and not using void years.
You eventually have to pay the piper. If Hyde doesn’t sign an extension beyond 2023, he has a dead-cap hit of $3.4 million in 2024 because three years of that restructure bonus will accelerate.
What it means for the Bills
Bills’ general manager Brandon Beane has said in the past he doesn’t like using this approach, likening it to a credit card. You rob the future to pay for the present. The first time he used it was last offseason, when he signed WR Emmanuel Sanders to play one season, but there was a void year on that contract to save space in 2021.
In addition to the Hyde deal, he’s now done it with Tim Settle’s contract in the last week. That is the only contract for which we know details, so he could be deploying it in multiple instances this cycle.
Ultimately, these can build up so you’re using cap space on players not on your roster. QB Drew Brees had $22.65 million in dead-cap charges when he retired. Buffalo is nowhere near that, but it demonstrates the complications that can arise down the line.
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