Why The Bengals Should Terminate The Contracts of Travelle Wharton, Jason Allen, and Jamaal Anderson

Having examined the individual Cap Hits and Cash Spends of players under contract for the 2013 season, it is quite clear that the Bengals are in excellent shape regarding the Salary Cap. It would appear, therefore, that the Bengals do not need to release anyone for salary cap-related purposes. While it is certainly true that the Bengals do NOT need to release anyone purely for cap reasons, it is always prudent to have as much salary cap space as possible without compromising the integrity or quality of the roster.

While I am not advocating releasing a player just for the sake of it, appropriately allocating limited resources (e.g. salary cap dollars) should never be overlooked. Moreover, no amount of salary cap savings should be deemed too trivial, especially when the savings would not negatively affect the product on the field.

With this is mind, the Bengals would be wise to terminate the contracts of G Travelle Wharton, CB Jason Allen, and DE Jamaal Anderson. If the Bengals decide to go this route, expect these three players to be released prior to the start of the 2013 league year (March 12th).

Let’s take a closer look at the Cap and Cash savings the Bengals would realize if they were to terminate the contracts of these three players:

Guard Travelle Wharton

Wharton was the Bengals first Free Agent signing last offseason. The Bengals signed Wharton to a 3-year/$10M contract which included a $3.175M signing bonus, and a first year base salary of $825K. Of the $10M total value of the contract, Wharton earned $4M ($3.175M Signing Bonus + $825M Base Salary) in the first year. This represents the classic "front-loaded" NFL contract, albeit on a smaller scale. Wharton is due to earn $2.675M in base salary in years two and three of the contract. Based on spotrac and rotoworld contract databases, Wharton is not scheduled to receive compensation in any other form (roster bonus, workout bonus, etc.) aside from his base salary.

Cash Savings

Terminating Wharton’s contract will save the Bengals a total of $5.35M in cash ($2.675M Base Salary in each of the next two seasons – 2013 and 2014).

While this represents a real Cash savings for the Bengals, they would also realize a Cap savings if they terminate Wharton’s contract.

Cap Savings

While the $5.35M Cash savings is important from a business perspective, the resultant Cap savings from releasing Wharton is more important from a Team perspective. When calculating the cap hit as it relates to the signing bonus, Wharton’s $3.125M signing bonus is prorated over the entire three years of the contract. This means that while Wharton received the entire $3.125M amount upon signing his contract last offseason, per the NFL’s salary cap accounting rules, the Bengals are allowed to prorate the $3.125M over the entire 3 years of the contract. Thus, the Cap Hit from the signing bonus equals $1.058M in each of the three seasons. In the event that a player’s contract is terminated, any unamortized portion of the signing bonus will count against the salary cap. Since only one season has passed on the contract, Wharton has two unamortized portions (each $1.058M) of his signing bonus remaining.

If a player is terminated on or before June 1st, all unamortized portions of the signing bonus will count against the Salary Cap for that season. Therefore, terminating Wharton’s contract on or before June 1st would force the Bengals to absorb an immediate hit Cap Hit of $2.116M, which represents the remaining unamortized portions of Wharton’s signing bonus ($1.058M x 2).

If the termination occurs after June 1st, then any unamortized portions of the signing bonus for future years would count against the cap the following season. This means that if the Bengals would cut Wharton after June 1st, they would absorb a $1.058M Cap Hit in 2013, and a $1.058M Cap Hit in 2014.

Historically, when the Bengals have terminated the contracts of players, they prefer to absorb an immediate salary cap hit instead of spreading it out over two seasons. Therefore, Wharton’s release will likely happen on or before June 1st.

Thus, with a contract termination likely happening on or before June 1st, the Bengals will absorb an immediate $2.116M Cap Hit from the unamortized portions of the signing bonus ($1.058M x 2).

While this $2.116M can rightly be termed "dead money", it actually represents a Cap Savings of $1.617M.

How so? Because if Wharton is on the roster next season, his 2013 Cap Hit would equal $3,733,333M ($2,675,000 Base Salary + $1,058,333 prorated portion of signing bonus). However, if Wharton is NOT on the roster, and assuming a June 1st cut, his Cap Hit would only equal $2,116,666 ($1.058M x 2).

Thus, $3,733,333 (on Roster) - $2,116,666 (NOT on roster) = $1,616,667 Cap savings.

In addition to the more than $5.3M Cash saving, the Bengals would realize a greater than $1.6M Cap Saving by terminating Travelle Wharton’s contract on or before June 1st.

CB Jason Allen

The Bengals signed Jason Allen to a 2-year/$8.2M deal last offseason. An injury-riddled season limited Allen to a mere four games with zero starts in the 2012. For the upcoming 2013 season, Allen is scheduled to earn $3M in base salary plus an additional $700K roster bonus. It is uncertain as to when the $700K roster bonus is scheduled to be paid. However, since it is a 2013 bonus, it is safe to say that it cannot be earlier than the first day of the new league year (4PM EST on March 12th). Regardless of when the roster bonus is due, the Bengals would be wise to terminate Allen’s contract prior to the start of the new league year in order to avoid paying such a roster bonus.

Cash Savings

Terminating Allen’s contract would result in a Cash saving of $3.7M for the Bengals ($3M Base Salary + $700K Roster bonus).

Cap Savings

Included in Allen’s contract was an $800K Signing Bonus. Because of proration, the Cap Hit with regard to the signing bonus was divided equally over the two years of the contract: $400K Cap Hit in 2012 and $400K Cap hit in 2013.

Just like Travelle Wharton above, the 2013 prorated portion of Allen’s signing bonus ($400K) remains unamortized. Thus, if the Bengals release Allen, this unamortized amount will count against the Cap for the 2013 season. Unlike Wharton, because there are no years beyond the upcoming 2013 season, the June 1st termination date is rendered immaterial for purposes of determining when the Cap Hit on the signing bonus is absorbed. In other words, since there is only one year remaining on Allen’s contract, whether the Bengals release him before or after June 1st, his $400K Cap Hit on the signing bonus will count against the Bengals Cap in 2013.

If Allen is on the roster for the 2013 season, his Cap Hit would equal $4.1M ($3M Base Salary + $700K Roster Bonus + $400 prorated portion of the Signing Bonus).

If Allen is NOT on the roster (and is terminated prior to the triggering of his $700K roster bonus), his Cap hit would be $400K. Again, this $400K Cap Hit represents the acceleration of the unamortized portion of Allen’s signing bonus.

Overall, the 2013 Cap Savings the Bengals would realize if they terminate Jason Allen’s contract = $3.7M:

$4.1M (i.e. Cap Hit if on Roster) – $400K (Cap Hit if NOT on Roster) = $3.7M Cap Savings

If Allen’s contract is terminated, in addition to the $3.7M Cash Savings, the Bengals would also realize a Cap Savings of $3.7M.

DE/DT Jamaal Anderson

The Bengals signed Jamaal Anderson to a 2-year/$5.5M contract last offseason. Anderson received two roster bonuses in 2012 (each worth $500K, for a total of $1M in roster bonus compensation). Additionally, Anderson received an additional $200K workout bonus in 2012, and was scheduled to earn $1.6M in base salary in 2012. Anderson’s total Cap Hit for 2012 was $2.8M ($1.6M Base Salary + $1M Roster Bonus + $200K Workout Bonus). Anderson was placed on season-ending injured reserved following the Week 2 home win against Cleveland.

For the 2013 season, Anderson is scheduled to receive a Base Salary of $2.5M, in addition to a $200K Work Bonus. His 2013 Cap Hit is, therefore, $2.7M ($2.5M Base Salary + $0.2M Workout Bonus)

Cash Savings

Terminating Anderson’s contract would result in a Cash Savings of $2.7M.

Cap Savings

Since there does NOT appear to be a signing bonus in Anderson’s contract, there is no signing bonus proration, and thus no acceleration of any unamortized portion of the signing bonus.

Therefore, the Bengals would realize a Cap Savings of $2.7M should they decide to terminate Anderson’s.

If Anderson’s contract is terminated, in addition to the $2.7M Cash Savings, the Bengals would also realize a Cap Savings of $2.7M.

A	B	C	D	E	F
Player	2013 Cash Spend (if on roster)	2013 Cash Hit (if on roster)	2013 Cap Hit (if NOT on roster) "Dead Money"	2013 Cap Savings (if NOT on roster) Subtract Column D from C	2013 Cash Savings (if NOT on roster)
Travelle Wharton	$2,675,000	$3,733,333	$2,116,666.67	$1,616,667	$2,675,000
Jason Allen	$3,700,000	$4,100,000	$400,000	$3,700,000	$3,700,000
Jamaal Anderson	$2,700,000	$3,700,000	$0	$2,700,000	$2,700,000
Total Savings In 2013				Cap Savings = $8,016,667	Cash = $9,075,000

Aside from the always important financial advantages gained from terminating these contracts, the same decision should be made from a strict football perspective. All three players were NOT contributors to the team’s on-field success last season, and the team has found more than adequate replacements for all of them.

Travelle Wharton was injured on the very first series of the very first preseason game last season. Clint Boling, though he struggled a bit down the stretch, more than adequately replaced Wharton. The Bengals have their current and future LG in the versatile Boling. While some have opined that the Bengals should explore trade options for Wharton, it is likely that a soon-to- be 32 year old guard, coming off a horrendous knee injury and carrying a $2.675M base salary, is not going to generate much interest from other teams. Not at that base salary, at least.

Jason Allen played in a mere four games last season and saw less than 50 defensive snaps. With the likely re-signings of UFA’s Terence Newman and Adam Jones, coupled with the returns from injury of Dre Kirkpatrick, Shaun Prater, and Brandon Ghee, Allen is already on the outside looking in with regarding to a roster spot in the defensive secondary.

Jamaal Anderson was injured during the Week 2 home win over the Browns, and subsequently placed on season-ending Injured Reserve. The Bengals signed Wallace Gilberry "street" free agent to replace Anderson, and Gilberry proved to be a key contributor to the defensive line rotation. In limited playing time, Gilberry generated 6.5 sacks, forced a fumble, recovered three fumbles, and scored a defensive TD.

While the Bengals are already in pristine condition regarding the Salary Cap for 2013, terminating the contracts of Travelle Wharton, Jason Allen, and Jamaal Anderson would create even more Cap Room and provide even greater financial flexibility. The Bengals would be adding additional financial weapons to their already impressive salary cap arsenal. Ultimately, the Bengals would be wise to use the added Cap and Cash savings in an effort to secure the talent (both home-grown and outside the organization) needed to propel them deeper into the playoffs.