Tennessee Titans lead NFL in 'dead money' & how they got in this situation

What is "dead money"?

In the business world, "dead money" is a term used for investments that are not profitable or growing. It can also be a used to refer to any cash that does not earn interest.

Similarly, "dead money" in the NFL is money being paid to a player that no longer plays for the team paying them. It's a previous financial commitment that has no current benefit for an organization. This is usually because of the guaranteed money in a contract that has already been paid, but has not counted against the cap.

For example, when a player signs a contract that has a lofty signing bonus, that signing bonus can be prorated over the length of the contract. Let's say it's a four-year deal with a $40 million signing bonus. The player is paid the full $40 million by the team when the contract is signed, but instead of that player taking up $40 million + base salary of cap space in a season, the team can defer the signing bonus and get hit for $10 million on the cap over four years.

Now let's say that player is cut after two seasons with the team. Even if the player's yearly salary was not guaranteed, there is still $20 million that has already been paid to the player, but has not counted against the team's salary cap. That's $20 million of dead money.  

***NOTE: "Void years" refer to years at the end of a contract in which a team is still paying a portion of the player's prorated signing bonus, but the player is not under contract with that team, 

How did the Titans get here?

You may be wondering how the Titans got in this position. To find the answer, you have to look back at Jon Robinson's tenure as Titans GM and the decisions he made to kick the can down the road when it came to paying his best players.

Of Tennessee's $31.9 million of dead money, over $27 million is tied up in three players: Kevin Byard ($13.359 mil), Ryan Tannehill ($9.2 mil), and Derrick Henry ($4.735 mil). All three of those players agreed to restructure their contracts at one point to help Tennessee clear cap space and acquire more talent. 

The Titans added void years to Tannehill's contract in 2021 to clear $18 million of cap space and add Julio Jones to the roster. By adding three void years to Henry's deal prior to the 2022 season, Tennessee got $5.2 million of cap relief. With Byard, restructuring his contract in 2022 gave the Titans $8.7 million in salary cap relief after they signed Harold Landry III to a big extension.

It was a gamble that Robinson made consistently towards the end of his Titans tenure. Creating future cap problems to go all in and contend for a Super Bowl title. The Titans fell short of that goal in 2021, fell on their face in 2022, and those future problems are now here.

Tannehill, Henry, and Byard will more than likely all be playing elsewhere in 2024, but they'll still be accounting for over ten percent of the Titans' cap space.

The good news? It probably won't matter all that much. The downside to having all that dead money on your payroll is...well, that you can't spend it. For teams that have limited cap space, dead money is a serious problem because it lacks flexibility. You can't trade it. You can't do any more restructuring. What's done is done.

But for the Titans, who are near the top of the league in cap space and are unlikely to spend it all in one offseason, I don't see this prohibiting them any this offseason.