In his time as general manager of the Buffalo Bills, Brandon Beane has shown he has a talent for maneuvering the NFL salary cap. When you compare his work to other front offices around the league, it becomes clear that competence in the front office matters and can be an advantage for a franchise if you have the correct people employed. Assistant GM, Joe Schoen, and the rest of Beane’s staff are credited frequently and should be mentioned here as well for the excellent work they do, in all aspects of the job. One facet of NFL contract magic that Brandon Beane is sure to consider this year, just as he has done in the past, is contact restructuring.
It is important to note that when a player decides to restructure, they are not agreeing to take less money. In fact, they are agreeing to take more money, as their base salary (not guaranteed) is moved to a prorated signing bonus (which is guaranteed). While the player won’t get the money they expected to get up front, they will get it by the time their contract expires. If a player agrees to restructure, they are agreeing to help their team financially for the upcoming season. So, how does it work? If a GM and player mutually agree to restructure their deal, the player’s base salary for that season is reduced to the league minimum. The league minimum changes every year and is based on the number of years in the league. The difference in the minimum salary and what they were originally set to be paid is then pro-rated over the rest of the contract as an addition to the signing bonus. In our example, instead of adding it to the signing bonus, I will create a separate column for the prorated bonus to make it more clear. Let’s look at an example using Bills center Mitch Morse and the two years that remain on his contract.
As it stands today, Morse has a cap hit of just over $10 million for the 2021 season. If Mitch Morse were to restructure, this is what it would look like.
I am guessing that the league minimum will continue to increase by $15,000 and come to a total of $835,000 for a player with six years of experience, which Morse has. In this scenario, his base salary shrinks significantly, which helps the Bills this year. But where does that money go?
$7,025,000 – $835,000 = $6,190,000 <– This is the difference between what Morse would have been paid if he didn’t restructure and the league minimum. This amount must get prorated over the final two years of his contract, 2021 and 2022.
$6,190,000 / 2 years = $3,095,000 per year. This is shown in the blue column.
So, when calculating his new cap hit for 2021, we have base salary + signing bonus + roster bonus + workout bonus + prorated restructure = $7,248,750
When we compare that to the $10,343,750 Morse was set to make before the restructure, we get a savings of $3,095,000. A cap savings of $3 million for an aging center with a history of concussions seems like an obvious choice for Beane, as long as Morse agrees. As the chart also indicates, this would mean that Morse’s cap hit would increase by about $3 million for the 2022 season, which is the downside to restructuring. Save now but pay later. The thing is, later (in this case 2022) might be a better time for the Bills to take on that extra $3 million for Morse than in 2021 when the cap is decreasing for the first time in 10 years.
I will save you the math for the rest of the candidates, but here are the cap savings for the remaining eligible players. All numbers are courtesy of Spotrac.
|Player||2021 Cap Savings if Restructured|
The Bills will want to exercise caution when it comes to restructuring since it does have a financial impact on the future. If Brandon Beane knows that he doesn’t want a player here long term, then turning salary into guaranteed money in the future is a harder pill to swallow, especially if they plan on cutting the player before the end of their contract. But for some of the players that the Bills know will be here long term, such as White, Diggs, and Dawkins, it is tempting to approach them about a possible restructure to save the Bills some money in a year when they are cash-strapped. Those players taking less money this year might just make the difference between being able to afford a top-tier free agent or a middle-tier free agent. Everyone will need to work together this offseason to help the Bills out financially, and I do expect to see some restructures utilized this spring.