The Green Bay Packers are in an uncomfortable salary cap situation. Still, it’s much better than it was a year ago. The NFL announced that the salary cap for 2023 will be $224.8 million, so the Packers know they are projected to be $16.48 million over the cap. Last offseason, they started the process projected to be $44 million over the cap.
Last year, I projected how much cap space the Packers could free up by making contract restructures without cutting a single player. They cut Za’Darius Smith and Billy Turner mainly for cap purposes, but they had $90 million in flexibility. This offseason, their window is around $75 million. However, considering their cap situation is cleaner, it’s easier for them to get under the necessary number this time.
For this exercise, I will only calculate players under contract with the Packers, except for Aaron Rodgers. Moreover, this projection is exclusively using max void restructures. That means it’s just moving current money for future years using fake years in the contract. By doing so, they will transform base salaries and roster bonuses into signing bonuses that are immediately paid. But the cap hits are prorated throughout the deal, up to five years.
How do restructures work?
When an NFL team wants to open up cap space, there’s a simple way to restructure players’ contracts, which doesn’t change how much money the player makes. The team moves the athlete’s base salary or roster bonus, which is something that the team pays and that hits the cap in the same year, into a signing bonus.
In the signing bonus, the team immediately pays the player, but the amount of money doesn’t hit the cap all at the same time. Instead, it’s equally prorated throughout the length of the deal, up to five years.
So, if a player’s contract includes just a $12 million base salary, his cap hit in the current year is $12 million. But if the team pays $10 million of those in form of a signing bonus and creates a five-year deal, those $10 million will be divided in the next five seasons. Therefore, the cap hit in the current year would be $4 million ($2 million in base salary, and the $2 million signing bonus proration). The rest of the money would hit the cap in the future, and it accelerates as soon as the contract expires.
What are void years?
To manipulate the cap, several teams have done void years in the contracts of their players. The Denver Broncos started this trend in the ‘90s, and the New Orleans Saints and the Philadelphia Eagles love to do it now. Furthermore, almost every team in the NFL was forced to do it recently because of the impact pandemic had on the NFL’s salary cap.
In this format, teams add fake years in the end of a player’s deal. By doing that, the franchise is able to spread the signing bonus through multiple years, even if it’s a one-year contract, or to spread it across more years, which lessens the impact of the proration in the current season.
However, this money doesn’t disappear. Sometime in the future, that amount of money will hit the cap.
They could still touch the Aaron Rodgers contract or save more money extending players whose contracts will void, so their prorated signing bonuses would stay stretched.
It’s also important to remember that restructures don’t mean pay cuts, so this money doesn’t simply disappear. This is a tool teams use to borrow from the future, so the amount of money they pay now won’t immediately hit the cap. That means the $75 million the Packers would open up in 2023 would eventually hit the cap in future years. The good part is that the salary cap in coming years is going to be higher, so the percentage of the cap is lower. The bad part is that there is no way to not absorb those hits, so the team loses future flexibility.
- Current cap hit: $20.02 million
- Cap savings with restructure: $11.52 million
- New cap hit: $8.5 million
- Current cap hit: $28.79 million
- Cap savings with restructure: $12.26 million
- New cap hit: $16.53 million
- Current cap hit: $23.97 million
- Cap savings with restructure: $11.48 million
- New cap hit: $12.49 million
- Current cap hit: $13.04 million
- Cap savings with restructure: $7.12 million
- New cap hit: $5.92 million
- Current cap hit: $10.9 million
- Cap savings with restructure: $8.72 million
- New cap hit: $2.18 million
- Current cap hit: $8.15 million
- Cap savings with restructure: $2.84 million
- New cap hit: $5.31 million
- Current cap hit: $20.21 million
- Cap savings with restructure: $9.85 million
- New cap hit: $10.36 million
- Current cap hit: $7.76 million
- Cap savings with restructure: $3.6 million
- New cap hit: $4.16 million
- Current cap hit: $7.9 million
- Cap savings with restructure: $6.32 million
- New cap hit: $1.58 million
- Current cap hit: $2.38 million
- Cap savings with restructure: $0.52 million
- New cap hit: $1.86 million
Total in cap savings: $74.23 million
How will restructuring affect Green Bay’s Cap?
It’s unlikely that the Packers will make every move mentioned above, because such an extreme action would negatively impact their future. Teams that operate this way, like the New Orleans Saints, lose financial flexibility because there’s no way to escape the hit when it’s a signing bonus proration.
Gary, Savage, and O’Donnell’s deals expire after the 2023 season, so every dollar taken off of the 2023 sheet would count against the cap in 2024 — around $15 million combining these three players. Besides that, considering how young and impactul he is, Gary is much more primed to a true long-term extension.
Jones, Bakhtiari, Clark, and Douglas’ deals expire after 2024, so there’s a little more breathing room, but there would still be a higher cap hit in 2024 (the corresponding proration for each year) and dead money in 2025 (the future proration that ends up being dead money). Smith, Campbell, and Alexander have longer deals, which helps the Packers to absorb the difference without dead money on the horizon.
The cap isn’t gonna be a major problem for Green Bay in 2023 and 2024, especially if the Packers decide to move on from Rodgers. Gutekunst has been conservative enough to keep the franchise with a stable financial situation, and things are better now than they were a year ago, when the Packers were highly impacted by the financial ramifications of the pandemic. Nonetheless, some moves are going to be made, and it’s smarter to make them with younger players who are projected to be part of Green Bay’s future plans.