Patriots’ release of Aaron Hernandez has significant salary cap, financial ramifications

Brian McIntyre
Shutdown Corner

Less than two hours after Aaron Hernandez was arrested and taken into custody, the New England Patriots made the stunning announcement that they were immediately releasing the 23-year-old tight end.

"A young man was murdered last week and we extend our sympathies to the family and friends who mourn his loss. Words cannot express the disappointment we feel knowing that one of our players was arrested as a result of this investigation," the Patriots said in their statement. "We realize that law enforcement investigations into this matter are ongoing. We support their efforts and respect the process. At this time, we believe this transaction is simply the right thing to do."

Remaining above reproach in the eyes of the community is important to the Patriots, so releasing a player who was somehow involved in a serious crime does not come as a surprise. However, less than a year ago, Hernandez was signed a five-year, $37.5 million contract extension and his release today — Hernandez is actually subject to waivers as he has less than four accrued season to his credit — comes with serious financial and salary cap ramifications.

From a salary cap perspective, Hernandez was scheduled to count $4.073 million against the Patriots' salary cap this season. That figure was comprised of a $1.323 million in fully guaranteed base salary, up to $118,000 in "per game" roster bonuses, an $82,000 workout bonus and $2.55 million in signing bonus proration. The "per game" roster bonuses are non-guaranteed and long gone, which leaves signing bonus proration ($2.5 million from last year's signing bonus plus $50,000 from his 2010 signing bonus) and the workout bonus. There have been conflicting media reports about the level of protections the Patriots received regarding the $2.46 million in fully guaranteed base salary that Hernandez was due over the 2013 and 2014 seasons. An arrest might void those guarantees, but Ian Rapoport of the NFL Network reported last week that the clauses doing so are not present.

Because the release of Hernandez occurs after June 1, the cap hit will be spread over the 2013 and 2014 seasons. Here's the annual breakdown:

2013: If the base salary guarantees in the contract do void, Hernandez will have a $2.632 million cap figure, a cap savings of $1.441 million for the Patriots. If the base salary guarantees — $1.323 million in 2013 and $1.137 million in 2014 — do not void, Hernandez will count $5.092 million against this year's cap, an increase of $1.019 million.

2014: The final three years of signing bonus proration — $7.5 million — are scheduled to accelerate onto the team's 2014 cap.

According to salary cap data maintained by "Shutdown Corner", the Patriots were $8.33 million under their adjusted cap number of $129.152 million for the 2013 season. The Patriots could eventually receive cap credits if they successfully recover portions of Hernandez's signing bonus, which is where the financial aspect of Wednesday's release comes in.

Hernandez received a $12.5 million signing bonus from the Patriots last August. $6 million of that was paid out immediately, $3.25 million was paid on March 31, 2013 and the remaining $3.25 million was scheduled to be paid on March 31, 2014. $2.5 million of that bonus applied to the team's 2012 salary cap, so $10 million is the most the Patriots could recover from last summer's signing bonus.

By releasing Hernandez, however, the Patriots may have made it more difficult for them to recoup any of the bonus money they've paid to him over the last four seasons.

NFL signing bonuses, roster bonuses and option bonuses are subject to forfeiture. And, according to Article, 4, Section 9 of the 2011 Collective Bargaining Agreement, a player who is "unavailable to the team due to conduct by him that results in his incarceration" has committed a "forfeitable breach" and may be required to forfeit the signing bonus (or roster bonus, option bonus, reporting bonus) for each year that a breach occurs. If Hernandez is convicted of a crime and serves time, and had the Patriots retained his rights for the duration of his incarceration, the Patriots would have a much clearer path to recoup the $10.05 million in bonus money.

Either way, the Patriots will certainly attempt to recoup that signing bonus money and Hernandez's camp, including the NFL Players Association, will attempt to keep it. There is seemingly no end to the billable hours in this case.

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