Since the talk remains out there, let’s look at Stefon Diggs’ contract.
During the week leading up to the Super Bowl, Buffalo Bills wide receiver Stefon Diggs was asked repeatedly about his future with the team. For whatever reason, he said he’s keeping an open mind and will let what happens happen. (Quarterback Josh Allen was much more optimistic on Diggs returning to the Bills, for what it’s worth.)
“I can tell you I’m prepared”
— Kay Adams (@heykayadams) February 8, 2024
- @stefondiggs on his future pic.twitter.com/sRC0qjXjkv
With the possibility apparently there for the Bills to move on from Diggs (at least according to the player himself), the financial implications would be massive. Let’s dive in.
There is a March 18 deadline
When Diggs signed his contract extension in 2022, only his 2022 and 2023 salaries and bonus were fully guaranteed. All of his 2024 money is currently unguaranteed, so the Bills have until March 18 to determine their course of action with Diggs. Once that date hits, Diggs’ $18.5 million salary for 2024 fully guarantees. That gives them a month to all make up their minds.
If they trade him after March 18, the new team would inherit the guaranteed money or negotiate a new contract before the season starts. They won’t release him (short of an Antonio Brown situation), since they’d be on the hook for the contract money whether he was on the team or not.
$31 million in dead-cap money
Diggs has been paid $31 million in bonuses that have yet to be accounted for on the Bills’ cap. Known as his dead-cap hit, this would accelerate onto the 2024 cap if he’s moved off the roster by trade, release, or retirement. Those hits are currently set to be collectively accounted for over the next four seasons.
This is why restructuring contracts to push the cap hit into future seasons limits your flexibility down the line. It’s also why I opined that the Bills shouldn’t restructure Diggs’ contract this offseason, so as to leave more flexibility in the 2025 offseason if he doesn’t rebound.
For reference, incurring a $31 million dead-cap hit would be the fourth-largest in NFL history. The Bills simply can’t afford to add that to their 2024 salary cap, as they are currently projected to be more than $50 million over.
Releasing or trading Diggs now is salary-cap possible
So if the Bills can’t add a $31 million cap hit, how can they trade or release Stefon Diggs?
In his current salary cap number, Diggs accounts for nearly $28 million in cap space — so a release or trade would only add $3.2 million in cap commitments to their 2024 cap number. It’s something they could absorb if they really wanted to.
If they were able to trade him, the new team must be willing to take on Diggs and his soon-to-be-guaranteed $18.5 million salary in 2024 or negotiate some sort of new deal with the receiver.
Post-June 1 release is another option
Another option would be to designate Diggs as a post-June 1 release. It’s an accounting tool that would allow them to release Diggs prior to his March 18 contract guarantee deadline. He would still count on the cap at his current cap figure of $27.854 million until June 1. On that date, $19 million of cap space would become available for 2024 by shifting to 2025.
The problem with that move is that the cap relief is so late, the Bills wouldn’t have many options to spend that cap amount on impact players. The best free agents would all be off the board in March, April, and May.
If they waited until June to trade Diggs, it would have the same effect of clearing $19 million in 2024 cap space.
What should they do?
I’m not in the building, so I don’t know how much of this is smoke and how much of this is fire. At the end-of-year press conference, head coach Sean McDermott referred to Diggs on the Bills in the past tense. This was probably more of a McDermott speaking flub than anything else, but McDermott was clearly pissed off at Diggs last offseason, too.
McDermott didn’t do a whole lot to tamp down the Diggs rumors back in January, now Diggs is fanning the flames in February.
I think the Bills should keep Diggs in 2024 on his current contract while drafting a new alpha receiver. The new guy competes with Diggs this offseason and replaces him in 2025. A transition of power with a WR1 and WR1a that flips in Year 2, or they can move on from Diggs a lot more easily on the 2025 salary cap.
If they feel like they have to move on from Diggs, they should release him with a post-June 1 designation. I don’t think a new team is going to want to pay him $18.5 million in salary plus trade a premium asset, so the best accounting for the cap space would be to spread it over two years.