FA Contract Breakdown & Salary Cap Implications

[CWood21]

Much has been said about how much the Packers spent in terms of dollars in free agency, but the raw numbers often don't really diagnose the actual contract itself.  That's what this thread is an attempt to do.  Going into the offseason, the Packers had roughly $34M in cap space which includes the ~$7.8M they rolled over from the 2018 season.  So without further ado, let's dig into those contracts.  I'll be using the same format.

Base Salary | Signing Bonus | Various Bonuses | Cap Hit | Cap Savings
Guaranteed portions are italicized

Za'Darius Smith
4 years, $66M, $20M signing bonus, $20M Guaranteed
2019: $1M | $5M | $1.25M | $7.25M | $12.75M
2020: $2M | $5M | $10.25M | $17.25M | $2.25M
2021: $9.5M | $5M | $6.25M | $20.75M | $10.75M
2022: $14.5M | $5M | $1.25M | $20.75M | $15.75M

Let's start out with the guarantees.  The only part of Za'Darius Smith's contract that is guaranteed is the signing bonus, which means if they cut him at any point in time the only part they'd have to account for would be the signing bonus which would accelerate and hit in the year he's released.  If they release Za'Darius after Y1, they'd incur $15M in dead cap.  If they release him after Y2, they'd incur $10M in dead cap.  And if they released him after Y3, they'd incur only $5M in dead cap.  In the first year, they only eat $7.25M of the cap space, which is a bit below where I anticipated.  I expected it to come around $10M, so that adds a bit extra cap space than I anticipated.  After Y1, they can save $2.25M which when you factor in a replacement player for roughly 500k, you're really only looking at a savings of $1.75M.  Figure in the $15M in dead cap they'd take on, it seems highly unlikely he's released after the upcoming season unless something goes horribly, horribly wrong.  After Y2, it becomes a bit bigger question.  His cap hit jumps up to nearly $21M which would be top 3 for highest cap hits among non-QBs last year.  The packers ave $10.75M by releasing him, which pushes it closer to $10M when you factor in a replacement player.  This is the first choke point for the contract.  If Za'Darius Smith continues to develop, that decision becomes a bit hazier.  If he doesn't develop, that's an easy out and only leaves the Packers on the hook for $10M in dead cap which isn't insurmountable.  We just released Nick Perry which has a dead cap of $11.1M, so the Packers aren't completely turned off by a large dead cap.  If they opt to retain him for the 2021 season, he probably gets released after Y3 because $21M as opposed to saving the nearly $16M makes the decision rather easy.  Overall, this is essentially a 2 year, $34.5M with what amounts to a pair of options for $10M and $15M roughly.  If Za'Darius Smith is productive, Y3 probably sees him in a Packers' uniform.  Probably unlikely he sees Y4 in a Packers' uniform

New Cap Space: $26.75M

 

Adrian Amos
4 years, $36M, $11M Signing Bonus, $12M Guaranteed
2019: $1.25M | $2.75M | $1.9M | $5.9M | $5.1M
2020: $1.75M | $2.75M | $4.9M | $9.4M | $1.15M
2021: $4.9M | $2.75M | $2.4M | $10.05M | $4.45M
2022: $7M | $2.75M | $0.9M | $10.65M | $7.9M

Again, let's start with the guarantees.  On top of the signing bonus which is always guaranteed, the Packers guaranteed the roster bonus in 2019 for $1M.  Since there's little chance of the Packers releasing Amos prior to the season, there's really no reason to factor that into it other than face value.  After Y1, they can release Amos and save a bit under $1M once you factor in a replacement for him.  Unless he's awful, he's going to be back in 2020.  After Y2, you can release him and save roughly $4M.  If the Packers develop a safety behind him, you're probably able to get away with releasing him but you're probably not getting a high quality safety for that money you're saving.  If you release him after Y3, you save nearly $7.5M which creates the first significant chokepoint.  If Adrian Amos is playing at a high level and you've already had him play Y3 with a cap hit of just over $10M, you're probably willing to bring him back for another year at 600k more.  Overall, this is a really healthy contract and doesn't create any real obvious cap outs.  I wouldn't be surprised if he saw the entirety of his contract.

New Cap Space: $21.65M

 

Preston Smith
4 years, $52M, $16M Signing Bonus, $16M Guaranteed
2019: $0.85M | $4M | $1.15M | $6M | $10M
2020: $4.35M | $4M | $5.15M | $13.5M | $1.5M
2021: $6.85M | $4M | $5.15M | $16M | $8M
2022: $11.35M | $4M | $1.15M | $16.5M | $12.5M

The Packers structured Preston Smith very similarly to Za'Darius Smith that they could conceivably opt out after Y1 if things went horribly wrong. Unfortunately, $12M in dead cap and really only saving $1M makes it highly unlikely the Packers would release Preston Smith after Y1.  After Y2, they have a $4M roster bonus due the 3rd day of the league year, which creates the first chokepoint.  If they release him, they save $7.5M when you factor in a replacement roster spot.  If they opt to release him after Y3, they save $12.5M which is a pretty easy release point considering they'd only incur $4M in dead cap.  This is effectively a 2 year deal at $27.5M with an option for another year.  Odds are high that he doesn't see Y3, and even less likely he'd see Y4.

New Cap Space: $15.65M

 

Billy Turner
4 years, $28M, $9M Signing Bonus, $9M Guaranteed
2019: $1.35M | $2.25M | $0.65M | $4.25M | $4.75M
2020: $1.7M | $2.25M | $3.65M | $7.6M | $0.85M
2021: $4.15M | $2.25M | $1.65M | $8.05M | $3.55M
2022: $5.2M | $2.25M | $0.65M | $8.1M | $5.85M

This is probably the most interesting structure for me.  It's essentially a 1 year deal with 3 options.  Y1 has a low cap hit as is usual when you're only counting $4.25M.  In 2020, his cap hit jumps to $7.6M and while the savings are minimal to say the least, his cap hit would have ranked 15th last year among guards.  If this was a good buy low candidate, he's a strong to keep on board but the minimal dead cap after Y1 ($6.75M in dead cap) make a relatively easy out next year if he flops.  Odds are if he's good for Y2, he's going to remain good in Y3.  This is definitely one of the more intriguing contracts we have since it essentially treats every year as an option with the low dead cap number.  If the Packers can develop a solid young OG this offseason, we can release Lane Taylor next offseason and save a bit over $4.6M.  Rinse and repeat the offseason after that, and you're saving nearly $3M the offseason by releasing Billy Turner.

New Cap Space: $10.9M

So right now, we're sitting around $10.9M and some change.  Figure roughly $5M for draft picks using OTC rookie contract projections, and the Packers have roughly $5.9M left to play with.  That doesn't include the $3.3M we saved by releasing Nick Perry.  That pushes our cap space to roughly $9.2M and we can open an additional $4.75M by releasing Tramon Williams.  I don't anticipate they release Tramon unless they sign another DB.  And that doesn't include restructures, which as far as I can remember we haven't utilized since Ted Thompson took over and I don't anticipate changing anytime soon under Gute.  Right now, we've got $9.2M in cap space to play with the potential to push it to nearly $14M.  Figure roughly $7M for rollover, and we've got enough money to re-sign Wilkerson and Breeland provided neither are asking for an insane amount of money.

[eyecatcher]

Thanks for the breakdown.  

[SSG]

great post!!!

[gopackgo247]

[pgwingman]

This was very education, thanks.

This isn't exactly on topic, but can you elaborate a little on the Nick Perry release? They paid $11M in dead cap and saved like $3M in cap space. Since they were already on the hook for the dead money, wouldn't it have made sense to keep him around this year, since the cap savings from cutting him weren't that large? That $3M seems like a small price to gamble if he becomes what he was in prior years.

[vegas492]

Could be wrong, but if you are using Spotrac, that $34M number already subtracted the rookie pool.

Spotrac has GB with $15.3 left to spend.

[vegas492]

1 minute ago, pgwingman said:

This was very education, thanks.

This isn't exactly on topic, but can you elaborate a little on the Nick Perry release? They paid $11M in dead cap and saved like $3M in cap space. Since they were already on the hook for the dead money, wouldn't it have made sense to keep him around this year, since the cap savings from cutting him weren't that large? That $3M seems like a small price to gamble if he becomes what he was in prior years.

Take the hit now so have more cap space next year.  That had to be their line of thinking.

[CWood21]

1 minute ago, pgwingman said:

This was very education, thanks.

This isn't exactly on topic, but can you elaborate a little on the Nick Perry release? They paid $11M in dead cap and saved like $3M in cap space. Since they were already on the hook for the dead money, wouldn't it have made sense to keep him around this year, since the cap savings from cutting him weren't that large? That $3M seems like a small price to gamble if he becomes what he was in prior years.

The Packers essentially had two options.  They could outright release him and they'd eat $11M in dead cap this season, and be on the hook for absolutely nothing in 2020.  Or they could opt to designate him as post-June 1 cut and spread that $11M over 2 seasons.  If they designated him as a post-June 1 cut, they'd have $3.7M in dead cap for 2019 but $7.4M in dead cap in 2020.  This is something I've discussed with others, and it's not a mechanism that teams with healthy cap situations should utilize IMO.

[CWood21]

4 minutes ago, vegas492 said:

Could be wrong, but if you are using Spotrac, that $34M number already subtracted the rookie pool.

Spotrac has GB with $15.3 left to spend.

Just looking at the numbers at the bottom, the Packers' salary cap is $196M which includes the rollover.  They've got $169M in committed salaries, which I believe doesn't include the draft picks since they aren't under contract at this point.  We've got roughly $11.7M in dead cap.  That's $180.7M in guaranteed salaries.  That's $15.3M which doesn't count for the draft picks, which is roughly $5M this year.

[vegas492]

Could be.  I remember looking at numbers earlier and they had rookie pool allotment in there.  Since they know the picks, they can get to that number.

That site has been screwy most of the day.

[CWood21]

Just now, vegas492 said:

Could be.  I remember looking at numbers earlier and they had rookie pool allotment in there.  Since they know the picks, they can get to that number.

That site has been screwy most of the day.

Yeah, that's the problem with Spotrac.  They're usually pretty accurate, but they're behind OTC in terms of getting updated and they're not super clear.  You might be right, I'm just going by what I see.

[vegas492]

Got one for yah, Cwood.  If you have time, look at the Rodgers contract.  See if there is a way to get creative with the accounting there and free up more money for the future.  Kind of like what the Bears did with Mack.  Curious if that is an option for the future.  Not that they necessarily need it, but rather I'm curious and don't really know how that all works as far as future ramifications.

[CWood21]

1 minute ago, vegas492 said:

Got one for yah, Cwood.  If you have time, look at the Rodgers contract.  See if there is a way to get creative with the accounting there and free up more money for the future.  Kind of like what the Bears did with Mack.  Curious if that is an option for the future.  Not that they necessarily need it, but rather I'm curious and don't really know how that all works as far as future ramifications.

There's no question that they could get creative and create more cap space.  If you convert his roster bonus into a signing bonus, you lower his cap hit in by around $11.7M but you're adding an extra $2.7M for the next four years after that.  Is that something you want to do?  Given where we are in FA, I don't see that need to do that.  LIS, restructures for me should be kept with teams with poor salary cap situations.  That isn't Green Bay.

[pgwingman]

22 minutes ago, CWood21 said:

The Packers essentially had two options.  They could outright release him and they'd eat $11M in dead cap this season, and be on the hook for absolutely nothing in 2020.  Or they could opt to designate him as post-June 1 cut and spread that $11M over 2 seasons.  If they designated him as a post-June 1 cut, they'd have $3.7M in dead cap for 2019 but $7.4M in dead cap in 2020.  This is something I've discussed with others, and it's not a mechanism that teams with healthy cap situations should utilize IMO.

Do you think it would have been wise to let him play this upcoming season and hope for the best, with the idea of cutting after next season? It seems like the savings are small enough to make that an option. Or is that a sunk cost fallacy (once you've moved on, swallow the medicine and move on)?

[vegas492]

14 minutes ago, CWood21 said:

There's no question that they could get creative and create more cap space.  If you convert his roster bonus into a signing bonus, you lower his cap hit in by around $11.7M but you're adding an extra $2.7M for the next four years after that.  Is that something you want to do?  Given where we are in FA, I don't see that need to do that.  LIS, restructures for me should be kept with teams with poor salary cap situations.  That isn't Green Bay.

Agree about the poor salary cap situations part.

I think GB is in a good place, now and for the future.

Thanks for the explanation!