Behind many of the NFL’s biggest offseason moves is mundane paperwork that made them possible. Football is a business, and the best businesses exploit loopholes. When NFL teams are up against the salary cap, they often turn to a reliable maneuver that offers short-term flexibility at a long-term cost: contract restructuring. Depending on how it is used, restructuring an existing contract can be the accounting trick that opens the door for a Super Bowl–caliber roster, or a way to pile past mistakes on top of one another and create self-imposed roadblocks.
Restructuring contracts takes two main forms. The first is the “we’re going to release you unless you take a paycut” negotiating tactic, when NFL teams flex on their employees because players’ contracts aren’t guaranteed. That’s how the Rams turned Tavon Austin’s remaining four years, worth up to $36 million, into a one-year deal worth $5 million. The second and more precarious type of contract restructuring is called a conversion. For example, a team could take a player’s 2018 salary, which would count against the 2018 cap, and convert that figure into a signing bonus. The real, actual cash is paid to the player right away, but the cap hit of that money is spread across the remaining years of the player’s contract. The team gets short-term flexibility by punting most of the cap hit down the road, and the player gets the same amount of money but receives it up front rather than in installments throughout the year. It’s a win for the player, and when done right, a win for the team.
For example, Von Miller is entering the third year of a six-year deal, with $70 million guaranteed, that could be worth as much as $114.1 million. The Broncos needed cap help, so they approached Miller and converted $16.9 million of his 2018 salary into a signing bonus. That money is paid to Miller this year, but the cap hit gets divided and spread across the remaining years of the contract. Now Miller’s future cash earnings and cap hits look like this:
Von Miller’s Cash Earnings and Cap Hits
The trade-off is clear: Miller’s cap hit is dirt cheap this year, but exorbitant in the following three seasons. Cap procrastination (procapstination?) provides short-term gain in exchange for long-term pain. For Super Bowl contenders looking to complete their team, restructuring can be a helpful tool to squeeze under the cap. For cap-strapped teams that aren’t seriously in the hunt, it only delays the inevitable, and possibly makes it worse. Let’s look at the teams who restructured contracts this offseason and see which moves made sense and which may come back to haunt teams in the not-so-distant future.
Denver Broncos
The Move(s): Created $12.4 million of cap space by restructuring the deal of Von Miller
Let’s start with the Broncos. Denver hasn’t made the playoffs since Peyton Manning retired after winning Super Bowl 50, and the Broncos have needed a quarterback ever since. Miller thirsted for Kirk Cousins hard this offseason, but Denver landed former Vikings starter Case Keenum (and reportedly never even made Cousins an offer). Now Miller has the highest cap hit for a non-quarterback each year from 2019 to 2021, and together with Keenum, who will cost the Broncos $15 million and $21 million against the cap in the next two seasons, will take up roughly a quarter of Denver’s cap space in 2019. If Keenum turns around Denver’s decrepit offense, the gamble will have paid off. But if the Broncos once again fail to make the playoffs, Denver’s moves to create quarterback cap space may make the climb back to contention steeper than ever.
Philadelphia Eagles
The Move(s): Created $12.9 million in cap space by restructuring the deals of TE Zach Ertz and RT Lane Johnson
If any team should be aggressive this season, it’s Philadelphia. The Eagles entered the offseason with the high-wire challenge of maintaining the most complete roster in football with the least cap space in the league. Restructuring Ertz’s and Johnson’s deals gave the Eagles the flexibility to trade for Seattle defensive end Michael Bennett and sign defensive tackle Haloti Ngata, who will replace defensive end Vinny Curry. By adding Bennett and Ngata, the team may actually be getting a talent upgrade. The Eagles’ financial foresight has given them the most talented long-term defensive core since the peak–Legion of Boom era Seahawks, and now they have reloaded for 2018. Plus, Bud Light bought Lane Johnson a round of beers for agreeing to the restructure. Philly Philly!
Miami Dolphins
The Move(s): Created $17.9 million in cap space by restructuring the deals of QB Ryan Tannehill and SS Reshad Jones
Miami entered the offseason in the limbo of neither having cap space in 2018 nor making the playoffs in 2017. As a result, the Dolphins dumped a ton of their costly players. The team traded away receiver Jarvis Landry and released defensive tackle Ndamukong Suh and center Mike Pouncey. Those moves make sense if the plan is to rebuild, but that doesn’t seem to be the plan. Miami then restructured the two biggest remaining contracts on its books in Tannehill and Jones and used that cap space to sign receivers Albert Wilson and Danny Amendola for a combined $20.5 million guaranteed. The team also traded a fourth-rounder for defensive end Robert Quinn, who is due $11.4 million this year, a sizable chunk of the $17 million the Dolphins saved by cutting Suh. The bizarre combination of win-now and rebuilding moves means Miami has swapped one set of cap problems for another. Now Jones has the highest cap hit of any safety in 2019 and 2020, Tannehill has a top-seven figure in the entire league in each of those years, and the Dolphins seem even farther from competing than they did this time two weeks ago. Moments after resolving past mistakes, the Dolphins dove headfirst into new ones. Miami finances its football team the way Marco Rubio finances his boats.
Pittsburgh Steelers
The Move(s): Created $26.5 million of cap space by restructuring the deals of WR Antonio Brown, G David DeCastro, LT Alejandro Villanueva, and DE Stephon Tuitt
Pittsburgh is doubling down on its Super Bowl window with Ben Roethlisberger, Le’Veon Bell, Antonio Brown, and its core offensive line. The Steelers have one of the most rigid cap situations in football, à la the Eagles, but unlike Philly the Steelers don’t have all of their core contributors locked up. The team was forced to release free safety Mike Mitchell, who started 60 of the Steelers’ past 64 games, as well as cornerback William Gay, and the team still needed to restructure four contracts to create the wiggle room to franchise Bell. If the team can reach a deal with Bell, it’ll likely keep the offense together for the rest of Roethlisberger’s career, and the Steelers have enough cheap contributors in place, like wideout JuJu Smith-Schuster and defensive end T.J. Watt, that Pittsburgh doesn’t need to fret (yet) about its cap in 2019 and beyond. It’s still a risk moving this much money back, particularly with aging linemen, but it seems a worthy gamble.
Dallas Cowboys
The Move(s): Cleared $7.4 million of cap space by restructuring deal of C Travis Frederick
Dak Prescott is set to make $630,000 in 2018 and $720,000 in 2019, and modern league economics suggest that means the Cowboys should go all in with their current core. Dallas COO Stephen Jones (Jerry’s son) has repeatedly discussed renegotiating with or releasing Dez Bryant, but the most substantive moves the team has made were restructuring Frederick’s deal and franchise-tagging Demarcus Lawrence. The Cowboys don’t have a ton of room to work with in 2018, but if they make a move with Bryant, they could potentially clear enough money to add an impact player like Ndamukong Suh and make a push for the NFC East. Prescott makes half of what punter Chris Jones does, and it’s surprising that the Joneses haven’t pushed their chips into the middle of the table yet to take advantage.
