Green Bay Packers: Pros & Cons to Restructuring Preston Smith’s Contract

With the Green Bay Packers finding themselves about $11.4 million over the projected salary cap, there are a few ways that they can go about creating that additional cap space. The most well-known option is cutting a player whose cap hit is greater than their dead cap hit, which creates savings for the team.

Another avenue to create cap space is by signing a player to a contract extension, which adds on years to the current deal–Davante Adams would be a prime candidate for this. And lastly is by restructuring a contract.

This offseason, many have expected Preston Smith to be one of the players who is cut, given that Green Bay will save $8 million in cap space this season by doing so and the fact that he’s coming off a down year. But recent comments from Brian Gutekunst suggested otherwise, as he told reporters that he “expects” Smith to be back this season.

Obviously, I could be very wrong, but I’m having a hard time believing that the Green Bay Packers are going to take a $16 million cap hit for Smith in a year where the salary cap is shrinking. If that’s the case, they have two ways to go about keeping him. The first is asking him to take a pay cut, which is something that Smith clearly won’t’ want to do, but it could be a better alternative than hitting free agency when there are fewer dollars for teams to spend.

The other, as I’ve already mentioned, is restructuring his deal. However, I don’t see that being a viable option either, despite providing the Packers with some short-term flexibility.

Why the Green Bay Packers would restructure Preston Smith’s contract

There’s really only one answer to this, and that is that a restructure would create cap space in 2021. By restructuring Smith’s deal, the Packers would take a portion of his 2021 salary, which totals $6.85 million and/or part of his $4.5 million roster bonus, and convert it to a signing bonus–aka cash.

The player still receives the same amount of money, but teams are able to spread the cap hit from the signing bonus out over the life of the contract, rather than taking that hit in one year. This then lowers the cap hit in 2021 because either the base salary or roster bonus has been reduced.

Why won’t the Green Bay Packers restructure Preston Smith’s contract

To truly gain the full benefit of the restructure, it’s advantageous for the player to have multiple years left on their deal–just like David Bakhtiari did when he converted his 2021 roster bonus to a signing bonus about a month ago. This allows teams to spread the cap hit from the signing bonus out over several years, thus reducing its impact on the cap year over year.

However, with Smith, the Green Bay Packers don’t have that luxury. Smith’s contract is up in 2022, meaning any cap space saved in 2021 by restructuring a portion of his deal all has to be recognized next season where he already has a cap hit of $16.5 million.

Sure, some financial flexibility would be gained this year, but the overall value of restructuring a contract wouldn’t be recognized because Smith has only one additional year left on his deal. Green Bay would then run into a similar issue next offseason, except the cap hit would be even greater than what it is now.

So to put a bow on everything I’ve just said, I don’t see this being a very good option either.

Gutekunst’s comments caught me — and I’m guessing most everyone else — off guard. But coming off a down season and in a year where the salary cap is shrinking, paying Smith the full amount of his contract for 2021 or looking to restructure it don’t seem to be the financially prudent moves. Does that mean Smith will take a pay cut? Your guess is as good as mine.

While we don’t know what the future holds for Smith and the Packers, we do know that Green Bay has to be under the salary cap by the new league year, which is less than two weeks away.