Yeah, some players actually save cap room by signing extensions. Not many but every little bit helps.

In this case I dont think it will work. I would still have to pay a player the minimum, $205k or something plus bonus for this season, and I dont have the cap space. We'd essentially be paying for one player twice in one season, so it doesn't save us anything in the short term.
I'm not complaining. I knew what this team was when I took it over, but i can definitely see how this is frustrating to the op.

I believe you guys have one other option.
If I'm correct, you can offer a contract between the Championship game and the end of season. The new season starts before they sign, so you can bypass the cap limit.
That said, you still need to be under the cap again by the first preseason game.

That doesn't work anymore. The contracts automatically get rejected if they put you over the cap.

Ah, ok

Should probably post this one in the suggestion box if it's not already there. JDB could make it so that the current season of the contract is prorated for games already played just like it is if you cut them in the middle of the season.