Green Bay Packers

How Does An Aaron Rodgers Trade Impact Green Bay's Cap?

Photo Credit: Dan Powers/USA TODAY NETWORK-Wisconsin

The Green Bay Packers have never been as close to trading quarterback Aaron Rodgers as they are now. According to multiple reports, the Packers allowed the New York Jets to talk to the quarterback, and the Jets sent top executives and coaches to California to meet the future Hall of Famer.

That means Rodgers is open to being traded and the Packers’ front office is open to the idea of moving forward with 2020 first-round pick Jordan Love.

One big component of the deal, and a motivation for the Packers to deal him, is the financial consideration. Aaron Rodgers signed a three-year, $150 million extension last offseason, and getting out of the deal would be highly impactful for the future of the franchise.

For the sake of this explanation, I will consider that the Packers won’t absorb any additional amount of money in a trade. This could happen, and Green Bay would assume a part of his roster bonus to improve the trade compensation, but it’s an unlikely scenario because the Packers don’t have much financial flexibility for 2023 anyway.

The bad news

Right now, the Packers have $16.4 million in cap space. In the event of a trade, Green Bay would lose $8.7 million in space in 2023, because Rodgers’ dead money if traded is higher than his cap hit if he stays in Wisconsin.

That happens because, when a player is traded, everything that has already been paid and has yet to be accounted for cap purposes accelerates into the current year’s cap. If the Packers execute this trade after June 1, which won’t happen in this case, the acceleration kicks in the following season. So, the Packers will have $40.3 million in dead money, which is past signing bonuses already paid to Rodgers that are still prorated until 2026.

That’s the bad part. The Packers will lose cap space this year, and there isn’t much room to recoup it. Because Green Bay started the season over the cap, moves were necessary regardless for them to be under the cap. According to cap specialist Ken Ingalls, the Packers have $2 million in effective cap space, after considering draft signings and Yosh Nijman’s restricted free-agent tender. If they trade Rodgers, they must open more space to sign free agents and operate during the season.

The Packers have already restructured Aaron Jones, Kenny Clark, Jaire Alexander, and Preston Smith’s contracts. They could still touch the deals of David Bakhtiari ($12.26 million in cap savings in a max void restructure), De’Vondre Campbell ($2.84 million), Rasul Douglas ($3.6 million), Darnell Savage ($6.32 million), and Pat O’Donnell ($0.52 million).

That’s $25.54 million in potential cap savings, which would be more than enough to operate and make some minor or mid-level moves. Moreover, after a Rodgers trade, extending Rashan Gary‘s deal would be a top priority. His new deal would open up cap space in 2023, as he is currently under his fifth-year option.

The good news

Kicking the can down the road is a risky approach, but the Packers would have much more flexibility to do so this year with Rodgers’ contract off the books. They have already used $36 million in future cap space to pay players this year, and that number will go up. If they do everything I mentioned above, the number will surpass $60 million.

However, Rodgers’ dead money acceleration means that the Packers won’t have to cap anything else in the future. Every dollar they have paid him will count towards the cap in 2023. Therefore, Green Bay will open up a lot of cap space in the future by trading Rodgers — $40.7 million in 2024, $59.3 million in 2025, and $53.4 million in 2026. That allows the Packers to be more active to surround Jordan Love with talent.

For instance, right now the Packers have $25 million in projected cap space for 2024. At the moment Rodgers is traded, it would go up to $65 million; even if it goes back down with Love’s fifth-year option, it’s still $45 million. In 2025, Green Bay’s cap space would jump from $105 million to $164.3 million. In 2026, the number goes from $171.8 million to $225.2 million. Those projections are provided by Over The Cap, already considering a potentially significant growth in cap space each year.

The best part

In terms of financials, nothing for the Packers is better in this deal than stopping the bleeding. The extension Green Bay and Rodgers signed last offseason is a killer for the team, salary cap-wise, and this is the last potential out without drastically affecting the future of the roster. By trading Rodgers now, the Packers would still face a $40.3 million dead money hit, as mentioned earlier.

However, things get much worse in the future. If Rodgers plays for the Packers in 2023 and retires or is traded right after, the dead money in 2024 will be $68.21 million. And $76.8 million the following year. Even considering a strong increase in the salary cap, that would be a significant part of the cap, and the Packers would have to operate for two years with less space than their counterparts.

There are several considerations, and it’s not just the money in this case. But the financial aspects create a bigger urgency for the Packers to finalize the deal and end the Aaron Rodgers era in Green Bay.

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