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Nick Fairley's Contract: The ‘Shell Deal’ Explained

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The term 'shell deal' has been tossed around a lot in regards to Nick Fairley's new deal. Canal St. Chronicles takes an inside look at what this means and the impact it will have on New Orleans.

Fairley must be jumping for joy thanks to his new deal
Fairley must be jumping for joy thanks to his new deal
Jason Bridge-USA TODAY Sports

Earlier Tuesday, the Saints signed free agent defensive tackle Nick Fairley to what was originally reported a 1-year contract that would be worth $3 million. As the day progressed, however, it was announced that the deal was actually for 3 years, dubbed a ‘shell deal’. But, what exactly does this mean?

A ‘shell deal’ is one in which the team has the option to void the remaining years on a player’s contract after the first year has been completed. It, in essence, is a way for cap-strapped teams to cheat the system. The extra years the team plans on voiding can thus be used as dummy years, a way to spread, for example, a signing bonus so the cap hit is not as harsh right off the bat. This is, in fact, exactly what New Orleans did with Fairley’s $2.235 million signing bonus.

As a result, the team only incurs a cap hit of $1.51 million, a huge save for the Saints, who were hindered already by their tight cap.

A ‘shell deal’ is not one typically heard about in the NFL. Many teams opt to not employ the strategy, as many are wary of the philosophy of prolonging the inevitable when it comes to the cap.

Every once in awhile, however, teams must get creative. Now that one team has used this, don’t be surprised if it pops back up in the news again at some point.