They'll reportedly have $10 million in dead cap money the next two years because of this. It was worth it. I'm proud of the Patriots putting principle ahead of money in this case.
I expect the Patriots will bring a claim aginst Hernandez for violation of his contract and also league rules in order to recap the cap space. Even if the charge turns out to be "only" a simple charge of obstruction of justice, I would be surpised if that were not a violation of both the contract and the league rules. I think the Patriots would only have to establish the claim to the civil verses criminal standard, but I am not sure on this. Reiss pointed this out as a likely senario a while ago.
"One other factor to consider: A club can recover bonus money and avoid a cap hit if a player violates one of the league's personal conduct policies or defaults on contract language."
Revisiting details of Hernandez contract - New England Patriots Blog - ESPN Boston
I doubt the Patriots see much if any of the money back from Hernandez bonus, but they will do what they can do to mitigate the damages to the organization. It is a sad day for all of the parties, but my strongest sympathies by far lie with the family of the murder victim regardless of what involvement, if any, Hernandez had in it.