METAIRIE, La. -- Even by the New Orleans Saints’ standards, this was a bit of a salary-cap stunner.
The Saints began this offseason nearly $75 million over the NFL’s $208.2 million salary cap. Yet they pushed more than $110 million in cap costs into future years without cutting a single player in case they needed to make room for a trade for quarterback Deshaun Watson.
Instead, they can now either spend that space on other free agents (including the quarterback they still need) or carry over any leftover space into 2023.
If you’re keeping track at home -- and how could you be?! -- that is now two years in a row the Saints have cleared more than $110 million in cap space, mostly by restructuring contracts to push exorbitant cap charges into the future.
Yes, this method of “kicking the can down the road” comes with an obvious downside. All these charges will be waiting for the Saints in future years, and they will have to go through the same process to get under the cap again next offseason.
More severely, they did pay a substantial price in 2021 when the cap unexpectedly dropped by $16 million because of lost revenues from the COVID-19 pandemic. In 2021, the Saints had to release a handful of starters and key contributors to fit under the cap.
However, barring another pandemic, the cap should continue to skyrocket in future years with revenues from TV deals and other sources. Meanwhile, the Saints have never allowed the cap to stop them from making aggressive moves -- like pursuing one of the biggest blockbuster trades in NFL history.
They have also re-signed several of their own players to huge contract extensions in recent years (Drew Brees, Michael Thomas, Cameron Jordan, Marshon Lattimore, Ryan Ramczyk, Alvin Kamara and Demario Davis among them).
They did let two key players leave in free agency over the past two years -- safety Marcus Williams and defensive end Trey Hendrickson. However, the Saints signed free-agent safety Marcus Maye at a lower price to replace Williams.
To cross the $110 million barrier this year, the Saints restructured 12 contracts, while safety Malcolm Jenkins and cornerback Bradley Roby agreed to pay cuts. Here’s the tally:
It’s unclear if Jenkins’ reduction will be tied to a future arrangement, since he took a straight pay cut of $6.12 million without converting any of it into a signing bonus. In Roby’s case, he did agree to a pay cut and a one-year contract extension with the Saints to avoid being a possible cap casualty. He went from a one-year, $10 million contract to a two-year, $7 million deal that includes another $7 million in possible incentives.
“From the outside looking in, everybody thinks the sky is falling. [But] we sort of know what our plans are and know what steps need to be taken,” New Orleans vice president of football administration and salary cap expert Khai Harley, the Saints' secret weapon, said last year. “Sometimes those are difficult decisions, but decisions that we have to make nonetheless.
“When the GM and coach say, ‘Hey, we want to do XYZ,’ you want to figure out how to do it.”
Perhaps one day the Saints will go into some sort of rebuilding mode and play catchup with the cap. But they never wanted to do that when they felt they were in a Super Bowl window with Brees at quarterback and Sean Payton coaching. And obviously they aren’t ready to do it now under new coach Dennis Allen, since they still feel the roster is loaded with enough talent to contend for a title.
So how did the Saints pull it off? Here’s a quick math lesson:
Let’s say, for instance, a player has a five-year, $100 million contract scheduled to pay him $20 million per year in base salaries. That would also count for $20 million per year against the salary cap.
However, if the player receives a $20 million signing bonus, the cap charges get divided across all five years of his contract at $4 million per year.
The Saints routinely convert base salaries and roster bonuses into signing bonuses -- paying the players up front and guaranteeing their money, while dividing the cap charges into future years. The Saints also routinely add years to the end of players’ contracts that are scheduled to automatically void at a later date.
There is no penalty, such as a tax or interest rate, for doing that. But the biggest drawback is that players will incur huge cap charges in future years. And when they get released or retire or their contracts void, there is more “dead money” waiting to hit the cap.
For instance, the final $11.5 million of cap charges from Brees’ past signing bonuses is still counting against New Orleans’ 2022 cap.