Last week, I wrote about how the 2021 NFL draft would be impacted by the COVID-19 pandemic hitting the 2020 college football season. Let's get to the other huge dent the coronavirus has already made on the next NFL season -- the financial one. The drop in expected league revenue as a result of empty stadiums has led to an unprecedented decline in the salary cap. The league is still finalizing the official number for 2021, but teams that were planning for years on a cap around $210 million are instead being forced to budget for something between $180 million and $185 million.
No team is going to be forced to abandon the season because it can't clear $30 million off of its cap, but organizations are going to be forced into changes. Players will be squeezed to take pay cuts or released to clear out space, resulting in a team-friendly market in free agency. Teams with significant amounts of dead money will feel the effects more intensely than they would in a typical year. Front offices will need to get creative to build their 2021 rosters.
Let's run through six teams, each of which is over the projected salary cap (according to Spotrac), and detail what they'll need to do to get their books in order. In the process, hopefully I'll be able to make these sorts of moves easier to understand. So much of what drives NFL decisions is money, and when you understand how and why teams look at their books, you can get a much better sense of what's going to happen to your favorite team.
I'll start with a contract coming up for a restructure and use the Steelers as an example of how some of this stuff actually works:
Jump to a team:
Falcons | Chiefs | Rams
Saints | Eagles | Steelers
Pittsburgh Steelers
Projected cap space: Minus-$7 million
Key free agents: WR JuJu Smith-Schuster, OT Alejandro Villanueva, RB James Conner, LB Bud Dupree, CB Mike Hilton, DL Tyson Alualu, CB Cameron Sutton, OT Matt Feiler
1. Restructure QB Ben Roethlisberger's deal. The Steelers and Roethlisberger both want to run things back one more time in 2021, but there's a problem, at least on paper. Roethlisberger has a $41.3 million cap hit due, the largest of any player in football. Here's how that works:
Roethlisberger's deal has four components. He has a $4 million base salary and a $15 million roster bonus, both of which are set to be paid into his bank account this season. Of that $19 million total, $14 million is already guaranteed for injury, so as long as he can pass a physical, the Steelers would not owe him those figures if they cut him.
He also has two cap charges on paper that need to be accounted for on Pittsburgh's cap. The signal-caller was given a $37.5 million signing bonus when he inked his three-year extension in 2019. While he gets paid all of that in one fell swoop when he signs his deal, Pittsburgh is allowed to spread the cap hits for that bonus across the length of the deal, so on the cap, the team has accounted for $12.5 million in 2019, 2020 and 2021.
The Steelers also restructured Roethlisberger's deal before the 2020 season, turning $19.5 million of salaries and roster bonuses into a signing bonus. In doing so, while they paid him that money upfront, Pittsburgh was allowed to spread the cap hit for that new signing bonus over the two remaining years of the deal, with $9.75 million coming due on the cap in 2020 and $9.75 million more in 2021.
The $12.5 million for Roethlisberger's first signing bonus and the $9.75 million more for his second signing bonus (the restructure) add up to $22.25 million in cap charges. The Steelers are on the hook for those charges regardless of whether he plays for the team or not. If he gets cut or retires, the Steelers would be paying $22.25 million for a player who isn't on the roster, which is what is commonly referred to as "dead money." Add up the $22.3 million in unaccounted bonuses, the $4 million base salary and the $15 million roster bonus and you get $41.3 million -- Roethlisberger's 2021 cap hit.
It's not hard for the Steelers to get out of this conundrum, although they'll feel some pain in 2022 for doing so. The easiest way to do this is for them to announce a four-year, $120 million extension for Roethlisberger. While that might seem outlandish for a player who might have one year left as a viable quarterback, the money means nothing and the years are only there to create as much cap space as possible.
In reality, Roethlisberger's deal would have only $19 million guaranteed. As you might remember, the Steelers owe him $19 million in unpaid cash for 2021; this deal converts the $15 million roster bonus and $3 million of his $4 million base salary into a new $18 million signing bonus. With four years of new runway, the team can spread that $18 million signing bonus across five years for cap purposes, meaning it is only on the hook for $3.6 million of that bonus in 2021.
What does all of that mean? In 2021, Roethlisberger's cap hit would drop from $41.3 million to $26.9 million, freeing up $14.4 million in cap space. The Steelers would owe the $22.3 million in unaccounted charges from Roethlisberger's last deal, a $1 million base salary and $3.6 million of the prorated signing bonus on his new extension. This restructure would get them more than $8 million under the projected cap for 2021.
If Roethlisberger retires after the 2021 season, the Steelers wouldn't owe any of the $120 million listed on his extension, since none of it was guaranteed. Since they've paid Roethlisberger an $18 million signing bonus and accounted for only $3.6 million of it on their cap, though, the unaccounted-for portion of the bonus accelerates onto their 2022 cap; they would owe $14.4 million in dead money in 2022. Given that the cap is expected to rise back north of $200 million next year, though, that's a trade the Steelers will happily make for one more year with their future Hall of Famer under center.
2. Extend CB Joe Haden or CB Steven Nelson. Restructuring Roethlisberger's deal gets the Steelers cap compliant, but to bring back some of their free agents, they'll need to keep going. Haden and Nelson are both in the final year of their respective deals and have cap charges of $15.6 million and $14.4 million, respectively. Cutting Haden would save $7 million, while moving on from Nelson would create $8.3 million in room. Those savings could help the Steelers bring back Sutton or Hilton from their free-agent pool.
As was the case with Roethlisberger, though, extending one of those corners can create cap space and keep the player around. Let's say the Steelers give Nelson a four-year, $40 million extension. They could guarantee Nelson a $1 million base salary for 2021 and pay him an $18 million signing bonus. With five years of runway, they would be responsible for only $3.6 million of that bonus in 2021, meaning they could keep Nelson around and actually save $3.7 million on their cap. That alone won't be enough to bring back Hilton, but it'll help create space without sacrificing a starter. Extending Nelson and cutting Haden could get the job done.
3. Extend OLB T.J. Watt and/or S Minkah Fitzpatrick. The Steelers are blessed to have two young stars on defense, but they're due for raises. Watt is entering the fifth-year option of his deal, meaning his cap hit spikes to $10.1 million. Fitzpatrick, who is only in his fourth year, is still a huge bargain at $2.7 million. Let's focus on Watt as a way to both give a player a big raise and still keep things cap compliant.
He only has that $10.1 million left on the final year of his deal, so the Steelers don't have much flexibility there. He's due for a massive extension, likely topping the five-year, $135 million deal Joey Bosa inked with the Chargers last July. Let's say Watt's five-year extension hits $140 million. Here's how Pittsburgh can make that work without creating more cap problems:
The team could give Watt a massive raise without raising his 2021 cap number by a single penny. Watt gets just over $46 million guaranteed at signing, with a $45 million signing bonus and his $1.1 million base salary for 2021. The Steelers famously don't give non-quarterbacks multiple guaranteed years, which came up in the Antonio Brown fiasco, but Watt's huge signing bonus makes it impossible to cut or trade him before 2024.
He'll make just over $79 million over the first three years of the deal, and while that $26 million figure in 2022 seems difficult to manage, they will restructure his base salary and roster bonus into a second signing bonus to reduce his cap hit. This is on the low end for a Watt deal, so the Steelers might be forced to push his cap hit slightly higher in 2021, but the idea will remain the same. This would be much tougher to do with Fitzpatrick given his $2.7 million cap hit, which is why the star safety might have to wait for 2022 to get an extension.
Atlanta Falcons
Projected cap space: Minus-$15.8 million
Key free agents: RB Todd Gurley, C Alex Mack, K Younghoe Koo, S Keanu Neal, S Damontae Kazee
1. Do something about QB Matt Ryan. Remember how Roethlisberger has the largest cap hit in football? Well, after he restructures his deal, the largest cap hit in 2021 will instead belong to Ryan, who has a $40.9 million hold. There are three ways the Falcons might address that number:
Restructuring Ryan's deal. If the Falcons plan to keep Ryan through the end of 2022, the easiest way to create some breathing room is to restructure his contract. He has a $23 million base salary due in 2021. Converting $21 million of that into a signing bonus means the Falcons could spread that $21 million over the final three years of his extension, leaving them accountable for just $7 million of that figure in 2021. In the process, they would save $14 million in cap space this upcoming season, making them cap compliant with one signature.
Trading Ryan before June 1. If they want to draft a quarterback and move on from their longtime starter, they have a question of timing to consider. The league uses June 1 as a cutoff point for a number of contractual issues, including whether a free agent qualifies a team to receive a compensatory pick. Here, we're looking at how the league treats future bonuses that have been paid but not accounted for on a team's cap. If a team cuts or trades a player before June 1, all of the unaccounted bonus money accelerates onto the cap in the current year. (The league lets teams designate two players as post-June 1 cuts even if a team cuts them before June, but no such provision exists for trades.)
For Ryan, that's a significant amount. The Falcons already owe $17.9 million in accounting charges for him on their 2021 cap, and if they traded him before June 1, another $26.5 million in unaccounted cap charges would accelerate onto their 2021 cap. They would owe $44.4 million in dead money for him, which is less than it would cost to actually have him on the roster in 2021 without a restructure.
Typically, I would say that would make a Ryan trade a non-starter, but we've seen teams absorb staggering amounts of dead money to get out of deals. The Rams have eaten more than $30 million in dead money in consecutive seasons to move on from Brandin Cooks, Todd Gurley and Jared Goff. The Eagles swallowed nearly $34 million in 2021 to move on from Carson Wentz. I would say that a Ryan trade before June 1 would be very unlikely but not impossible.
Trading Ryan after June 1. Moving on from him after June 1 makes more sense, although it would require the Falcons to either agree to terms on a deal before June or deal him at reduced value after the organization (presumably) drafts a quarterback in the first round. Dealing Ryan after June 1 would spread the dead money over two years, leaving the team with $17.9 million in dead money in 2021 and the remaining $26.5 million in 2022.
In addition to being stuck with a lame-duck quarterback on its roster for most of the spring, the benefits of those cap savings would mean less to Atlanta because of when they come. The team would be stuck with Ryan on its roster throughout virtually all of free agency, and while it would eventually free up $23 million in 2021 cap space, those savings wouldn't come until June, when the vast majority of the league's free agents should be under contract. The Falcons can roll those savings into 2022, but I don't think it would help their case all that much in 2021 to wait on a Ryan deal.
2. Restructure WR Julio Jones. The star wideout has a $23.1 million cap hit, and the Falcons can reduce that figure by converting most of his $15.3 million base salary into a signing bonus. With three years left on his contract, Atlanta can take $14.1 million of that figure and divide it by three for cap purposes. There's no downside for Jones, who gets paid a bonus upfront in March as opposed to making his money week by week during the season. By doing this, the Falcons free up $9.4 million in cap room.
3. Do the same with OT Jake Matthews and LB Deion Jones. Both Matthews and Jones have three years left on their respective deals. Matthews has the largest cap hit for any left tackle in the league despite making it to one Pro Bowl in seven seasons, but the Falcons aren't in position to turn away a solid player. Converting $12 million of his $13 million base salary to a bonus frees up $8 million in 2021. They can also take $6 million from Jones' $8.2 million base, convert that to a bonus and create $4 million in room.
Restructuring those four deals gets the Falcons a little more than $23 million under the projected cap. That's enough to franchise-tag (or extend) Koo and start working on the defensive woes. Calvin Ridley is eligible for an extension this offseason, but the Falcons will probably be stuck waiting until 2022 to extend their talented young receiver.
Kansas City Chiefs
Projected cap space: Minus-$18.6 million
Key free agents: WR Sammy Watkins, CB Bashaud Breeland, G Kelechi Osemele, RB Le'Veon Bell
1. Rebuild at offensive tackle. If you saw what the Chiefs' backup linemen did in Super Bowl LV, you know that they can't afford to go into 2021 with a hope and a prayer protecting Patrick Mahomes. Their line was a strength heading into the season, but injuries and opt-outs tore them apart. Kansas City should get back guard Laurent Duvernay-Tardif after the medical doctor spent the 2020 season fighting COVID-19, but they'll have some tough choices at tackle.
Eric Fisher tore an Achilles in the AFC Championship Game, and while the 2013 No. 1 overall pick has been around for the entirety of Andy Reid's run with the organization, it's tough to see the Chiefs bringing him back for the final year of his deal at his cap charge of $15.1 million. Kansas City can free up $12 million by releasing the 30-year-old Fisher, who won't get that much on the open market given his injury. A pay cut might make sense for both sides, although this is a position the Chiefs could address in a deep class for tackles.
On the right side, Mitchell Schwartz is entering the final year of his deal. He has been one of the biggest bargains in football since joining the Chiefs in 2016, but he also missed most of last season with a back injury. Schwartz has a $10 million cap hit in 2021, but the Chiefs would be able to free up only $6.3 million by cutting or trading the 2018 All-Pro. Extending him would make sense if they think his back problems will clear up; alternately, there should be a meaningful trade market for Schwartz.
2. Restructure DT Chris Jones' deal. The star defensive tackle has a $20 million guaranteed roster bonus due in March. With three years left to go on his contract, the Chiefs will likely convert $18 million of that bonus into a signing bonus. Jones gets paid the same amount of money at the same time, but the team will spread the cap charge for the $18 million over three years, freeing up $12 million in cap space.
3. Extend S Tyrann Mathieu. Mathieu has been one of the best safeties in football since joining the Chiefs in free agency in 2019, but he is entering the final year of his deal. He also has the largest cap hit of any free safety in the league, so reducing that $19.7 million figure would make sense. General manager Brett Veach will want to get this deal done before Jamal Adams resets the safety market in Seattle.
A new Mathieu extension could come in around four years, $60 million. With $14.8 million due in the final year of his existing deal, here's what that could look like:
Mathieu's new extension would come with a $25 million signing bonus and $33.3 million guaranteed over the first two years. Crucially, it would save the Chiefs $8.6 million in cap space this year, allowing them to shop in the bargain bin for help alongside him on defense.
Los Angeles Rams
Projected cap space: Minus-$27.6 million
Key free agents: Edge Leonard Floyd, CB Troy Hill, TE Gerald Everett, S John Johnson, WR Josh Reynolds
1. Restructure DT Aaron Donald and CB Jalen Ramsey. The Rams haven't typically gone the major restructure route with their big contracts. One exception came last year, when they converted $9 million of quarterback Jared Goff's salary into a signing bonus. The organization wouldn't have made that choice if it knew it was going to trade Goff less than a year later, but it's too late to worry about that now.
As far as franchise building blocks go, it's difficult to imagine the Rams moving on from their two defensive cornerstones. Donald has the largest cap hit of any non-quarterback in football at $27.9 million, which the team will likely address with a restructure. The future Hall of Famer has a $19,892,000 base salary this season and four years left to go on his contract. Converting $18 million of that figure into a signing bonus would free up $13.5 million in 2021 cap space.
Ramsey, meanwhile, has a $17.5 million base salary as he begins his five-year, $100 million extension. Converting $16 million of that base into a signing bonus frees up $12.8 million for the team in 2021. These two moves free up $26.3 million in cap space, which gets the Rams within a rounding error of complying with the salary cap. Given their holes on defense, though, Los Angeles will have to do more to free up space.
2. Restructure WRs Robert Woods and Cooper Kupp. The Rams will have to get some help from their two starting wide receivers, who have the fourth- and fifth-largest cap hits on the roster. Converting $9 million of Kupp's $10.5 million base salary and $11 million of Woods' $12.5 million base into signing bonuses frees up an additional $14.8 million in cap space. Now they can start considering free agents at moderate prices.
3. Extend QB Matthew Stafford. There have been reports that Stafford will play out the final two years of his deal with the Rams, but L.A. didn't trade its starting quarterback and two first-round picks with the intention of having Stafford around for a couple of years. Stafford has team-friendly cap hits of $20 million and $23 million over the next two seasons, but the Rams will need to extend their new starter at some point. Using these two upcoming seasons as runway gives them the most financial flexibility as they get an extension done.
Again, let's take a look at how that might eventually go down. Let's say Stafford gets a four-year, $164 million extension. Adding that to his current deal means the Rams have to account for six years and $207 million. Can general manager Les Snead do that while simultaneously reducing Stafford's 2020 cap hit?
He can! Giving Stafford a $60 million signing bonus and a $5 million base salary means Stafford would get a significant raise while simultaneously dropping the veteran's cap hit by $3 million. (The $60 million bonus only prorates over the first five years of the contract by NFL rule.) This deal would keep the quarterback's cap hits over the first two years of the deal in line with what he is set to make over the final two years of his current deal while saving the more significant cap hits for 2023 and beyond, when the Rams (and the league) should be in better cap shape.
Philadelphia Eagles
Projected cap space: Minus-$40.5 million
Key free agents: OT Jason Peters, WR DeSean Jackson, S Jalen Mills
1. Release WR Alshon Jeffery and DT Malik Jackson. The Eagles already laid the groundwork for cutting Jeffery and Jackson in December by restructuring their deals. The moves helped spread their cap hits over two years, but in the process confirmed that they will free up about $4.5 million in 2021 by designating both players as post-June 1 releases. Philly will eat a little over $14 million in dead money in 2022, but given its cap situation, it didn't have many options. Cutting wide receiver Marquise Goodwin would free up another $4.5 million.
2. Restructure four veteran contracts. Let's start up front. Guard Brandon Brooks tore an Achilles for the second time and missed all of 2020, while tackle Lane Johnson played through an ankle injury that eventually required surgery, but the Eagles have no choice but to restructure these deals. They just don't have the leverage or flexibility to ask these guys to take a pay cut or to release either of their veteran linemen. Restructuring their deals would clear up about $12.5 million in much-needed cap space.
Likewise, the Eagles will have to kick the can forward on defense. Tackle Fletcher Cox has four years left on his deal, which the Eagles have already restructured twice for cap room. Doing it again would free up $10.5 million. Making a similar move with cornerback Darius Slay would generate $6.5 million more in savings, getting them within $1 million of the cap threshold. Restructuring edge rusher Brandon Graham or extending end Derek Barnett would get them under the cap in time for the beginning of the new league year.
3. Trade TE Zach Ertz. General manager Howie Roseman won't be able to designate his longtime tight end as a post-June 1 release, but a trade would make sense. Ertz is in the final year of his deal, and it's clear that the Eagles don't intend to re-sign the veteran. Trading Ertz before June 1 would free up $4.3 million, while doing so after would create $8.3 million in space this upcoming season. Every dollar is going to count for this team, so it might wait until the summer to move Ertz to a team such as the Colts or Patriots for a late-round pick.
New Orleans Saints
Projected cap space: Minus-$66.4 million
Key free agents: TE Jared Cook, S Marcus Williams, DT Sheldon Rankins, QB Jameis Winston, Edge Trey Hendrickson, LB Alex Anzalone
Of course, the Saints are in a universe of their own. I wrote at length about the moves they had to make in January, but that was when they needed to dump just under $100 million in cap space to get compliant.
Now that number is down to $65.2 million. What changed? To start, the cap is now projected to come in just north of $180 million, which is up from the prior estimate of $175 million. The Saints already executed one of the moves I suggested in cutting backup guard Nick Easton, freeing up $5.3 million in room.
The most notable move was that QB Drew Brees reduced his 2021 salary from $25 million to the minimum of $1.1 million. While the accounting clearly indicates Brees intends to retire, this is a coup for New Orleans. The Saints weren't going to be paying that $25 million either way if Brees retired, but if Brees retired before March, they were going to be forced to eat the entirety of the $22.7 million they owe in dead money for Brees on their 2021 cap.
By reducing his salary to the minimum, they can now carry Brees on their cap into the beginning of the league year and through to June 1, which is when he'll retire. Since Brees will wait until June 1 to officially file the paperwork, they will need to eat only $11.2 million in dead money on their cap in 2021, with the remaining $11.5 million coming due in 2022. The Saints were already going to clear that $25 million off of their cap, but they'll save even more now.
Just to reiterate the path to solvency, let's clear out that $65.2 million for New Orleans:
1. Cut LB Kwon Alexander, DT Malcom Brown and CBs Janoris Jenkins and Patrick Robinson. With Jenkins being designated as a post-June 1 release, these four moves free up $30.8 million, getting us within $34.4 million of safety.
2. Re-sign CB Marshon Lattimore and OT Ryan Ramczyk. The two first-round picks from New Orleans's dazzling 2017 draft class are both up for extensions. In their fifth-year-option seasons, Lattimore has a 2021 cap hit of $10.2 million, while Ramczyk is slightly higher at $11.1 million. Both are set to become among the highest-paid players at their positions.
With a two-tier bonus structure, the Saints can reduce each player's 2020 cap hit below those figures. Let's do a Lattimore extension as an example. The star corner will probably want to top Jalen Ramsey's deal, so let's give him five years and $105 million. In all, the Saints will owe Lattimore six years and $115.2 million. Here's how that could work:
They would pay Lattimore a $15 million signing bonus in 2021 and guarantee a $20 million roster bonus for 2022. His 2022 cap hit would seem untenable, but when that year comes around, the Saints will convert his roster bonus to a signing bonus and spread that $20 million over the ensuing five years, meaning this deal will really look more like this:
When the Saints were cap-strapped in the past, they used this sort of structure to sign players such as Jairus Byrd and Junior Galette. It's very dangerous, as the Saints saw when those two contracts turned out to be disasters, but this is their best path to locking up their two young stars while simultaneously creating cap space. Doing something like this with Lattimore and Ramczyk could free up $10 million in room.
3. Restructure DE Cam Jordan and WR Michael Thomas. In making the now-familiar move to convert base salaries to signing bonuses, restructuring the deals for the two Saints stars frees up an additional $18 million. We're now within $6.4 million of breaking even.
4. Extend OT Terron Armstead. If the Saints are willing to shell out premium contracts for three linemen for years to come -- Ramczyk, plus guard Andrus Peat got a new deal last year -- locking up Armstead would get New Orleans under the cap. The star left tackle has a $16.3 million cap hold due in the final year of his deal, and the Saints shouldn't have much trouble reducing that figure below $10 million as part of a new deal.
At the same time, the Saints realistically need to get well below the cap line to start looking at free agents. They have a handful of starters hitting free agency and would have only Taysom Hill at quarterback in 2021. To create more room, they'll need to take things a step further:
5. Restructure QB Taysom Hill's contract. For whatever rumors there are about Winston being the preferred starter for the Saints in 2021, the evidence seems to point to Hill as the guy. They gave him a one-year extension worth $16.3 million before 2020, most of which is already guaranteed. When Brees went down injured, Hill was the one who took over as the starter. Winston might come back, but I'm not convinced Hill will be the backup.
Either way, the Saints owe him $12.2 million in compensation between his base salary and roster bonus in 2020. General manager Mickey Loomis & Co. can restructure that into a signing bonus and add what's known as voidable years to the end of his contract, which amounts to an extension he is guaranteed to never see. Hill's contract would void immediately after next year's Super Bowl, a tactic we've seen the Saints use with Brees in the past.
They could convert $10 million of his compensation to a signing bonus, pay the BYU product upfront and then spread that signing bonus over five new years. In doing so, the Saints would free up $8 million in 2020 cap space, with that dead money hitting their cap in 2022 instead.
6. Release RB Latavius Murray and (possibly) WR Emmanuel Sanders. Both players are luxuries on a Saints team that needs to address an outflow of talent on defense. Cutting Murray would free up $2.5 million. Designating Sanders as a post-June 1 release would free up $8.5 million; in a market flooded with wide receiver talent that is unlikely to yield an $8 million deal for the veteran wideout, the two sides might be able to come to terms on a pay cut to keep Sanders around. Let's say they reduce Sanders' base salary and roster bonus from a combined $8 million to $5 million.
The Saints have freed up an additional $14.5 million, money they can use to address questions at cornerback, tight end and (most notably) quarterback. Will they be as good as they were in 2020? No. Can they get under the cap and still be a playoff contender in 2021? Absolutely, if they play their cards right and get effective quarterback play. We'll worry about their 2022 cap next year.