Charles Clay contract details: cap hits, potential future restructure

The contract numbers for new Buffalo Bills tight end Charles Clay have finally been reported by ESPN's Mike Rodak and Aaron Wilson of the Baltimore Sun. The five-year, $38 million contract contains $24.5 million in fully guaranteed money, which ranks first in the NFL among tight ends.

In terms of the average per year, Clay's $7.6 million per season ranks fourth among tight ends. The contract is not, however, a significant outlier in terms of the upper tier for tight ends, as 11 of them average over $7 million per year. It falls in line with recent tight end signings, as 2015 free agent Jordan Cameron and Greg Olsen of Carolina signed contracts averaging $7.5 million per season.

Despite this, the guaranteed money and lengthy commitment the Bills have made to Clay yields a contract very favorable for the player.

Containing a very easily converted $10 million fully guaranteed roster bonus in 2016, the Clay contract should be broken down two ways: as it is signed right now, and then how it may play out if (when?) that 2016 roster bonus is converted to a signing bonus and prorated over the final four years of the contract.

Breakdown as signed

2015 cash payouts

$10 million (signing bonus) +
$3 million (guaranteed base salary) =
$13 million

2015 cap hit

$2 million (prorated signing bonus) +
$3 million (base salary) =
$5 million ($24.5 million in dead money)

2016 cash payouts

$10 million (fully guaranteed roster bonus, due on third day of league year) +
$1.5 million (guaranteed base salary) =
$11.5 million

2016 cap hit

$2 million (prorated signing bonus) +
$10 million (roster bonus) +
$1.5 million (base salary) =
$13.5 million ($19.5 million in dead money)

2017-19 cash payouts

$4.5 million (yearly base salary)

2017-2019 cap hits

$2 million (prorated signing bonus) +
$4.5 million (yearly base salaries) =
$6.5 million per year (dead money hits of $6 million, $4 million, and $2 million in 2017-19, respectively)

With such a large cap hit in the 2016 season, it is easy to speculate that the Bills plan on converting that roster bonus into a signing bonus on the third day of the 2016 league year, which would then be prorated over the remaining four years of the contract. Under this restructure, Clay's cash payouts would be identical, so it is only necessary to break down how the salary cap hits would be affected (noting that nothing would change for the 2015 numbers above).

Breakdown with bonus conversion

2016 cap hit

$2 million (prorated signing bonus) +
$2.5 million (prorated converted roster bonus) +
$1.5 million (base salary) =
$6 million ($19.5 million in dead money)

2017-19 cap hits

$2 million (prorated signing bonus) +
$2.5 million (prorated converted roster bonus) +
$4.5 million (yearly base salaries) =
$9 million per year (dead money hits of $13.5 million, $9 million, and $4.5 million in 2017-19, respectively)

In short, then, the Bills can easily convert the 2016 roster bonus and keep Clay's cap numbers relatively low for the first two years of the deal, despite the structure used to pry him away from Miami, while only increasing them to $9 million per season for 2017-19. The main risk inherent in a move of this type would be the removed flexibility created by the big dead money hits that would be tied to Clay's contract throughout its full duration.