Tag: restructure

As expected, Saints will likely restructure Derek Carr’s contract

As expected, the Saints will likely restructure Derek Carr’s contract and tie themselves to the QB through 2025:

This was the way the wind was blowing: the Times-Picayune’s Luke Johnson reports that the New Orleans Saints are likely restructuring their contract with Derek Carr this offseason, which will bring the team much-needed salary cap relief while tying themselves closer to the quarterback. His contract would effectively become guaranteed through 2025.

Carr currently has a salary cap hit at $35.7 million, highest on the team. A standard restructure would reduce his already-guaranteed base salary from $30 million to the veteran’s minimum and pay the difference out as a signing bonus, which is prorated over the next five years. That lowers his cap hit down to about $12.6 million in 2024, saving the Saints more than $23 million this year. This was the plan all along — committing to Carr with heavy guarantees through his first two years. That’s how they got him to sign here instead of with, say, the New York Jets or Carolina Panthers.

Now, New Orleans would still be in the red by more than $60 million after restructuring Carr. The Saints would still by higher over the cap by a higher figure than any other team; the Buffalo Bills and Miami Dolphins both need to clear about $51 million to reach cap compliance. There’s a lot of work still to be done. This is just the first big step.

The downside to doing this? Carr’s cap charges in 2025 ($45.7 million) and 2026 ($55.7 million) go even higher, increasing by about $5.7 million in each season. Because this money was already guaranteed, just paid out differently for accounting purposes, it’s more difficult to get out of Carr’s contract later on. If he fails to improve with a new offensive coordinator in the fall then general manager Mickey Loomis will be left with an albatross around his neck. Releasing Carr before his contract expires would accelerate all of those $5.7 million signing bonus payouts into the current year rather than scratching them out over time.

It’s more complicated if you look further out. If Carr is on the roster by March 17, 2025 then his $30 million salary for that season will become fully-guaranteed, too. Let’s say the Saints do restructure Carr this offseason, which is what’s expected. That puts his 2025 cap hit at more than $51.4 million. They’ll have to make a decision next year on whether to cut him (to negligible salary cap benefit) or restructure him again. Knowing Loomis, the latter route is more likely.

Carr was always going to be in New Orleans for at least 2023 and 2024. Restructuring his contract now makes it highly likely he’ll be the quarterback again in 2025. His current deal runs out in 2027. Who knows what the team looks like at that point? Loomis and Dennis Allen could both be gone. But Carr, and all the money they chose to invest in him, will remain. Let’s hope he can carry his strong finish to the 2023 season — Carr led the league in touchdown passes through the final five weeks — over into the years ahead with a new offensive coordinator calling plays, making this big contract a little more palatable.

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Saints’ NFL-worst salary cap situation isn’t as bad as it looks

The Saints have the worst salary cap situation in the league — on paper. But this year’s challenges aren’t as daunting as they’ve overcome before:

It’s another year with Mickey Loomis running the New Orleans Saints, which means it’s another offseason with 31 teams having more salary cap space to work with — on paper. The experts at Over The Cap estimate that the Saints are in the red by $83.6 million, assuming the cap rises to $242 million. That’s based off the $20 million leap it made last year.

And yeah, that’s a challenging situation to work with. But it’s not as daunting as some of the hurdles we’ve seen the Saints overcome before. There just aren’t many outgoing free agents that New Orleans will have to bid against other teams for; left tackle Andrus Peat, wide receiver Michael Thomas and quarterback Jameis Winston are the highest priorities to re-sign and none of them are ranked as top-100 free agents at Pro Football Focus.

So how will the Saints chip away at that $83.6 million and get under the cap? Expect them to start with their usual strategies of restructuring high base salaries into signing bonuses for key players like linebacker Demario Davis (saving about $8.1 million), defensive end Carl Granderson (yielding $7.2 million) and safety Tyrann Mathieu ($5.8 million in savings). The big domino is quarterback Derek Carr. His contract is set up for a restructure that would save more than $23 million against the cap, but it would basically guarantee a third year with him under center. If the Saints are confident he can carry his strong finish to the 2023 season over into 2024, they shouldn’t hesitate to pull that lever.

Those four moves get the Saints halfway to the finish line by themselves. There are other restructures in the cards but tougher negotiations on pay cuts with underperforming veterans have to be considered, too; it’s tough to justify high salaries for players who have missed a lot of time with injuries or suspensions, or who just haven’t met expectations. Hopefully things can work out differently so guys can help the team without losing money.

Our point here is that the Saints can reach cap compliance and then make room without losing many key free agents or cutting foundational players. They won’t have to kick off a fire sale (or, more accurately, they can’t, because of unique contract structures) to go the distance. They’ll get under the cap and add players in free agency.

The concern is whether all that hard work is worth it for a Dennis Allen-led team that hasn’t gotten to the playoffs with some of the easiest schedules in the league the last two years. Going all-in like this is smart when the team is competitive and winning playoff games. If the Saints can’t reach the postseason, what’s the point in all these cap gymnastics?

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Broncos could save $48M in cap space with simple restructures

The Broncos could save more than $48 million in salary cap space with simple restructures this offseason.

The Denver Broncos are projected to be $24 million over the salary cap this offseason, leaving the team to make some tough decisions.

The Broncos could make some creative contract adjustments this spring to create more salary cap space. One way Denver could save cap space is through simple restructures, according to OverTheCap.com.

In a simple restructure, the Broncos can take payments and convert them into a signing bonus that is prorated into cap hits over the course of the contract. For example, a $4 million salary could be converted into a $3 million signing bonus that would be prorated as $1 million cap hits over the next three years (dropping the 2024 cap hit from $4 million to $2 million).

Maximum restructures are more complicated. In a max restructure, cap hits are prorated into the future by either giving a player an extension or adding void years to a contract.

Denver could save $48,265,444 in cap space this year through simple restructures, according to OTC. The team could create $112,019,979 through maximum restructures.

Here’s a quick look at 10 ways the Broncos could create more cap space either through simple restructures or extensions, courtesy of OTC.

Jameis Winston restructures his contract with the Saints for 2024

Jameis Winston restructured his contract with the Saints for 2024, buying time for both sides to explore an extension after Winston has explored his options:

This is complicated, so stay with us: Jameis Winston has restructured his contract with the New Orleans Saints for the 2024 season, per ESPN’s Jeremy Fowler. But a complicating factor is that Winston’s contract will still expire before the start of the new league year, making him a free agent. The Saints did this on Jan. 6, the last day they were allowed to change any contracts for the purposes of facilitating a post-June 1 cut in 2024. Coincidentally, it was also Winston’s birthday.

How does this work? Why did the Saints do this? Let’s break it down.

Winston’s contract was previously set to expire in March, leaving behind more than $10 million in dead money from past restructures. What the Saints have done is restructure it into a new signing bonus (that has effectively already been paid) which temporarily lowers his 2024 salary cap hit to about $4.5 million. When — or if — his contract runs out in March, it will return to the $10.6 million cap hit.

This gives the Saints some short-term financial flexibility and expands their negotiating window to work on a new extension with Winston if both sides are up for it. They’ll each explore their options in the months ahead before making a decision, but this gives them a couple of paths forward where previously there was just one.

Another point to consider: the Saints can now designate Winston a post-June 1 release, meaning they’ll carry that $4.5 million cap hit until June 2, at which point the team will get about $1.2 million in savings while paying $7.3 million in dead money next year. One downside to that move is that teams are only allowed to designate two post-June 1 cuts each year, limiting their possible savings by processing those releases early. Michael Thomas is the other leading candidate for a post-June 1 cut designation, unless Ryan Ramczyk is forced into a premature medical retirement. Taking this path with Winston would limit the Saints’ options on other fronts.

So does this mean Winston is returning to the Saints for another year as Derek Carr’s backup? Not necessarily. That’s a route they can take if Winston doesn’t find a better opportunity during the legal tampering window, but it’s not the only path available to them. With more than $72 million left to clear before the Saints will reach salary cap compliance, their work is far from over.

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Marshon Lattimore’s unique contract restructure makes a trade more likely

Marshon Lattimore’s unique contract restructure makes a trade more likely, or at least easier on the salary cap:

Has Marshon Lattimore already played his last game as a member of the New Orleans Saints? When he’s healthy and locked in, Lattimore is the best player on the field, shutting down the league’s best receivers and making game-changing plays. But an unusual contract restructure has made a trade more likely this offseason, or at least more acceptable for the Saints’ accountants.

Thanks to good reporting from NewOrleans.Football’s Nick Underhill, we have a better understanding of this unique restructure. The majority of restructures that the Saints and other teams carry out are simple conversions of base salary to signing bonus, which makes it tougher to get out of those contracts.

In this case, Underhill reports, the Saints converted most of Lattimore’s salary to an option bonus that will be paid out a week before the 2024 season kicks off — and be paid by his new team, not New Orleans, in the event of a trade.

This restructure reduced his salary cap hit from $25.6 million to $14.6 million. If Lattimore is traded before June 1 (opening the door for compensation in 2024 draft picks), the Saints would have to pay more than $30.4 million in dead money while he’s playing for another team. If the draft pick compensation is strong enough it might make sense.

But if they wait until June 2, they would only pay $13.4 million in dead money in 2024 and roughly $20.8 million in 2025. That’s much easier to work with. The Saints carried a combined $21.7 million in dead money for David Onyemata, Marcus Davenport, and Malcolm Jenkins this year.

That’s still a lot of money, and it would mean the Saints are not getting any picks back in the 2024 draft (which is the main concern here). But if the Saints want to extend Paulson Adebo’s contract long-term and either ride with Isaac Yiadom or move Alontae Taylor back outside, there are enough positives — from the Saints’ point of view — to trading Lattimore. If Lattimore wants out, it’s a big positive for him, too.

So this doesn’t mean a trade is going to happen. Lattimore has not requested a trade and the Saints are not even allowed to talk with other teams about a trade until the offseason. And it takes two to tango. Lattimore is a rare talent but he’s got an injury history and it’s uncertain how much an acquiring team would be willing to spend to get him before even paying him themselves. But none of this happened accidentally. If Lattimore and the Saints are headed for a split, this is going to be the first real step.

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Saints kick off 2024 salary cap gymnastics with Marshon Lattimore contract restructure

The Saints kicked off their 2024 salary cap gymnastics with a Marshon Lattimore contract restructure. Could this move set up an offseason trade?

So this is interesting — the New Orleans Saints are getting an early start on their 2024 salary cap maneuvering by restructuring their contract with Marshon Lattimore. Per ESPN’s Field Yates, the Saints reduced Lattimore’s $15 million base salary (which was already guaranteed for injury) down to the veteran minimum and are paying out the difference in a $13.79 million option bonus.

That quick move saved them more than $11 million against the cap next season. The Saints must reach salary cap compliance no later than March 13, the start of free agency, so it makes sense to get a jump on it now.

But is this the only move left with Lattimore in mind? Injuries have limited the all-star cornerback to just 17 games over the last two years, and his backup Isaac Yiadom has played at a very high level opposite Paulson Adebo (who will be up for a contract extension in the next year or two). Alontae Taylor has had a rough year playing out of position in the slot, so moving Lattimore could either keep Yiadom in the lineup or move Taylor back where he’s played his best football. For a team that has plenty of talent in the secondary and few draft picks, trading Lattimore might make sense.

So how would a trade work? Trading Lattimore before June 1, 2024 isn’t an option after this restructure; they would be paying more than $30.4 million in dead money by trading him so soon. But trading Lattimore on or after June 2 would defer some costs to 2025. The Saints would only save $1.2 million by trading him (the veteran’s minimum salary, which his new team would pay) but they would be left with dead money hits of $13.4 million in 2024 and more than $31.6 million in 2025.

If that still sounds like a lot of money (and, sure, it is), look at the Los Angeles Rams. They traded star cornerback Jalen Ramsey (two years’ Lattimore’s senior) to the Miami Dolphins in exchange for a player and a third-round pick while paying $19.6 million in dead money this season. Maybe the Saints view this as a similar situation where they can get better compensation for a younger player at the same position.

Of course the catch is that the Saints would have to keep Lattimore on their roster through free agency and the 2024 draft with his new $14.6 million cap hit before trading him. They wouldn’t get any current-year draft compensation for trading him to a new team. But they could get a pick in 2025, and rostering him through the spring at $14.6 million is easier to work around than the $30 million-plus figure he had before this restructure.

Does the mean the Saints are for sure going to trade Lattimore? Probably not. They had to restructure his contract regardless of his future with the team just to help reach salary cap compliance. This move was coming anyway. But there are enough other factors at play — the lack of draft picks, the abundance of options at cornerback, and his injury history — that we can’t rule it out right away. It’s something to monitor in what’s shaping up to be another busy Saints offseason.

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Chiefs restructure massive contract after Chris Jones’ return

The #Chiefs restructured one of the biggest contracts on their books on Tuesday after Chris Jones ended his holdout.

The Kansas City Chiefs got creative with the numbers on Tuesday by restructuring veteran guard Joe Thuney’s contract to create $8.7 million in cap space. The move comes just a day after All-Pro defensive tackle Chris Jones ended his months-long holdout from team activities.

Kansas City had to get back under the NFL’s mandatory salary cap after agreeing to new terms with Jones, so this move isn’t out of the ordinary. Functionally, Thuney will now be un-cuttable for the Chiefs, who clearly had no intention of parting ways with the talented guard.

Now that Jones is back in the mix defensively, Kansas City should have a better chance to maximize their abilities against opposing offenses and test their mettle against the upstart Jacksonville Jaguars in Week 2.

Though Jones’ official status for the game is unknown, Chiefs fans can rest easy knowing that Kansas City’s star pass rusher is set to return to action soon.

Broncos restructure Tim Patrick’s contract to create more salary cap space

The Broncos restructured Tim Patrick’s contract and created $3 million in salary cap space for the 2023 season.

The Denver Broncos restructured wide receiver Tim Patrick’s contract this week to create additional salary cap space, according to ESPN’s Field Yates. After restructuring Patrick’s deal, the Broncos created $3 million in cap space.

Patrick was set to have a base salary of $8 million this year and Denver converted $6 million into a signing bonus, according to The Denver Post‘s Parker Gabriel. That signing bonus will now be prorated into $3 million cap hits in 2023 and 2024, instead of a full $6 million this year.

After getting that bonus, Patrick’s base salary drops to $2 million in 2023. He is now set to have a cap hit north of $16 million in 2024, the final year of his contract.

If the Broncos cut the veteran receiver next spring, the team would eat $6 million worth of “dead money” with a net savings of $10 million. Patrick, who will turn 30 in November, will miss the entire 2023 season with a torn Achilles, so it’s possible that he’s played his last game in Denver.

NFL teams were required to be under the salary cap ahead of Thursday’s season opener. Going forward, players on the active roster, practice squad and injured reserve all count against a team’s cap number. During the offseason, only the top 51 cap hits are counted.

Any cap space the Broncos do not use this year will roll over to be added to the team’s 2024 cap total. They have a little breathing room now after adjusting Patrick’s contract.

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Here’s how much salary Alvin Kamara will lose while serving NFL suspension

Here’s how much salary Alvin Kamara will lose while serving his three-game NFL suspension. A spring restructure ended up saving him a lot of money:

As expected, the NFL issued a suspension to New Orleans Saints running back Alvin Kamara that will sideline him for three games to open the 2023 season. That’s a relief for the team after the initial expectation was that Kamara would have to sit out six or more matchups. We’ve discussed which games Kamara will miss but how much is this going to hurt wallet?

After agreeing to restructure his contract earlier this year — reducing his base salary to the veteran minimum and having the difference paid out as a signing bonus — Kamara was due to receive $1,080,000 in weekly game checks over the course of the season. He’ll forfeit three of those while serving this suspension, which is a total of $180,000.

Had he not restructured his contract (which accomplished the larger goal of freeing up 2023 salary cap space for the team), Kamara would now be losing $1,560,000. So he both helped the team by agreeing to be paid in a different structure and secured his money knowing this NFL discipline was likely to be handed down.

Of course Kamara also had to pay legal fees in settling his criminal and civil court cases in Nevada and Louisiana, respectively, where he agreed to a confidential settlement out of court with the alleged victim. He’s probably also seen fewer sponsorship opportunities with this incident casting a pall on him. But as Kamara himself pointed out, he doesn’t want anyone’s pity or sympathy — he knows he made a terrible mistake and he still feels the embarrassment of it. That’s going to outweigh any dollar figures thrown around.

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The Saints broke this chart on the NFL’s trendy contract restructures

The Saints broke this chart on the NFL’s trendy contract restructures, sitting so far out in front of the other teams it might muddy the data:

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Now there’s something you don’t see every day. Over The Cap’s Jason Fitzgerald shared a chart displaying the three-year trend of contract restructure utilization and wins per season, and the New Orleans Saints broke the model.

Take a look at it. You’ll see many teams clustered near the NFL average, though notoriously spendthrift operations like the Cincinnati Bengals and Washington Commanders have almost never restructured a contract in recent years — with other teams like the Philadelphia Eagles, Los Angeles Rams, and Green Bay Packers way out in front, nearing 15% of their potential.

Well, almost in front. They’re all competing for second place behind the Saints. No team has restructured more contracts with as much frequency over the last three years than New Orleans (35%). As Fitzgerald observed, including the Saints at all might muddy the data and make it tough to tell what’s going on here.

Remember, restructures are nothing new. Teams have always converted salaries into signing bonuses so they’re paid out on a different schedule to more easily fit everyone under the salary cap. What the Saints have done differently is taking what was a little-known accounting quirk and weaponized it, matching the pace of their spending with the annual rise of the salary cap so they won’t have to pay a hefty bill.

Things kind of went sideways for them during the COVID-19 pandemic, which introduced unique pressures to the NFL’s cap calculations. Instead of rising as expected the cap dipped, forcing the Saints to cut contracts they’d planned on keeping and restructured others with players they didn’t anticipate. For the 2020 and 2021 seasons at least, the Saints did everything they could just to get by.

So it’s a relief to see things returning to normalcy. The Saints’ cap situation is improving, slowly but surely, and they’re ranking among the league’s highest spenders now that they’ve paid the price for that creative accounting when the cap was more restrictive. They’re still restructuring more contracts than most teams, sure, and that’s going to be the case again in 2024. But things are in a much better space for 2023 than we saw in years past, and that should be our takeaway.

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