The Pittsburgh Steelers lost $1.516 million of salary cap space on the NFLPA public salary cap sheet on Thursday morning, and that deduction caught me a little bit by surprise. After thorough research, it appears that the loss of salary cap space might stem from a dead money charge related to WR Mike Williams. Over the Cap now has Williams listed with a dead money charge of $1.516 million for 2025 as of Thursday morning as well.
So, where and how did this dead money charge come about? After playing with numbers related to his contract from last year, I think I have figured it out.
When the New York Jets traded Williams to the Steelers last year, Williams arrived in Pittsburgh reportedly being owed $2.5 million. What combination of base salary and per-game base salaries made up that $2.5 million, we don’t really know for sure.
What we do know about that contract is that it was subject to the 50 percent rule in the CBA as the deal included a lowered 2024 base salary and OATSB (Other Amounts Treated As Signing Bonus). The deal also had four void years attached to it for means of prorating the bonus amounts out over the longest term of years possible.
In short, William’s contract, when it arrived in Pittsburgh, had four years of proration on it, with the total in each year being $379,000. When Williams’ contract voided this offseason, the full amount of the remaining four years’ worth of proration came due as dead money. ($379,000 x 4 = $1,516,000).
You can read Article 13, Section 6 (b) (iii) (5) of the NFL’s CBA for specifics when it comes to the 50 percent rule. Essentially, that rule states that if the cap charge from Year 1 to Year 2 has more than a 50 percent drop, then the difference is treated like a signing bonus (OATSB).
Jason Fitzgerald from Over the Cap also described the 50% Rule a little more in detail in his book:
How does the 50% rule work? In this case, let’s assume a player signs a four-year contract, but with no signing bonus. His P5 base salary in 2014 is $10 million and his P5 base salary in 2015 is just $2 million. Clearly the $2 million salary represents significantly more than a 50% decrease in salary between Year 1 and Year 2, so we invoke the 50% rule. The difference between $10 million and $2 million is the amount needed to treat as a signing bonus. That $8 million difference is now prorated over a four-year period. The player’s 2014 salary cap charge, which normally would be $10 million, is now $4 million, a figure comprised of $2 million in prorated money and $2 million in non-prorated salary.
By these salary cap calculations, the NFL also has two special rules, one dealing with present value calculations and the other with salary cap circumvention.
As you have read through this section, you are probably thinking to yourself that the signing bonus seems like a great way to avoid high salary cap charges. That is true in the short term, but what happens to all of that money that you already paid if a team terminates a player’s contract? The answer to that will bring us to a topic called dead money that will illustrate the dangers of over-abusing the use of the signing bonus. This was something the Oakland Raiders were known for doing under owner Al Davis’ regime. We will cover dead money in following chapters.
As a result of this recent dead money salary cap debit related to Williams, the Steelers are now $32,920,766 under the cap in real-time and as of Saturday morning.
