Green Bay Packers Salary Cap Update, How Did We Get Here?

Perhaps more so than any offseason in the past, many were locked into the Green Bay Packers salary cap situation. With the league salary cap plummeting from $198.2 million in 2020 to $182.5 million in 2021, due to COVID-19 and a lack of fans in the stands, the Packers found themselves in a serious cap crunch with difficult decisions to make.

Despite falling short of the Super Bowl once again, this was a Super Bowl-caliber roster and a team that was arguably the best in football for much of last season. So with the hope being that Green Bay can make another run in 2021, it was quite clear that GM Brian Gutekunst did all he could to keep the band together for at least one more year.

Players Re-signed

Aaron Jones, Kevin King, Marcedes Lewis, Tyler Lancaster, Will Redmond (ERFA), Robert Tonyan (ERFA), Yosh Nijman (ERFA), Allen Lazard (ERFA), Malik Taylor (ERFA), Randy Ramsey (ERFA)

However, by prioritizing their own, and the fact that they still had very little cap space, that limited Green Bay’s ability to bring in any potential high-impact free agents from other teams.

The only addition that could potentially fall into that category was the recent signing of linebacker De’Vondre Campbell to a one-year deal. All of their other signings were simply made to help fill out the 90-man roster, and up until about a month ago, long-snapper Joe Fortunato was the only outside addition.

Outside Free Agents Signed

De’Vondre Campbell, DeAndre Thompkins, Blake Bortles, Kurt Benkert, Jake Dolegala, Joe Fortunato

Now, of course, in order to make all of these signings, the Packers had to create some serious cap space along the way. They entered the offseason about $30 million over the salary cap, and in addition to clearing those cap charges, they also had to make sure that they had room for their re-signings, the new players they brought in, and some additional expenses, which I will get to shortly.

There are several ways that a team can go about creating cap space, and out of necessity, the Green Bay Packers used just about all of them.

Pay Cuts

Many assumed that Preston Smith was going to be cut this offseason after a down 2020 campaign, but instead, he and the Packers agreed to an incentive-laden pay cut. This took Smith’s cap hit in 2021 from $16 million to $8.75 million.

Devin Funchess also took a pay cut to stay with the team, albeit a much smaller one of $750,000. Funchess’ cap hit in 2021 is now $1.5 million.

Contract Restructures

Billy Turner, Mason Crosby, Adrian Amos, Za’Darius Smith, Dean Lowry, Robert Tonyan, Marcedes Lewis, David Bakhtiari

The benefit of restructuring a deal is that teams are able to clear cap space in the current year by turning a portion of a player’s base salary into a signing bonus and prorating that cap hit out over the life of the deal. Not a bad idea, especially for a team in a cap crunch like Green Bay.

The issue for the Packers, however, is that in order for this to truly be effective, they needed contracts that have multiple years left on the deal. For example, a $20 million signing bonus on a four-year deal comes with a cap hit of $5 million each year. But a $20 million signing bonus on a two-year deal comes with a $10 million cap hit each season.

However, other than Bakhtiari, that wasn’t the case for the Packers, which meant that they had to get creative by adding voided years to several contracts. On paper, voided years add additional years to the contract, allowing the team to spread out the cap hit over the “new” life of the deal. But that’s only on paper; if a player has one year remaining and four voided years are added on, his contract would still terminate after one year.

When you hear the phrase “kicking the can,” that’s exactly what this is. The addition of voided years provides relief during the current season, but once the contract is up, the cap hits that were pushed into future years immediately come due.

Veteran Cuts

Rick Wagner, Christian Kirksey, Anthony Rush, KeiVarae Russell, John Lovett, Mike Weber

This is likely the most well-known way to create cap space. When a veteran’s cap hit (money on the books for that season) is greater than their dead cap hit (money that is on the books even if the player is no longer on the team), then a team can save cap space by cutting them.

With Rick Wagner and Christian Kirksey, this was absolutely the case. Green Bay was able to create additional cap space by moving on from them. The others on this list were likely cut to make room on the 90-man roster for a new addition.

So, where do the Green Bay Packers currently stand?

After all of those offseason moves, Over the Cap has the Green Bay Packers at $5.08 million under the salary cap. Although they are under, there are likely more moves to come, as there are additional expenses not accounted for in that figure. And as Brian Gutekunst told us this prior to the draft, there are a handful of contracts that the team wanted to address in the coming months.

What are the additional expenses?

When looking at how much cap space a team has, it’s important to keep in mind that there are several expenses not accounted for. If it’s early in the offseason, the cap projections won’t reflect the incoming draft class. In this instance, the $5.08 million has everyone in Green Bay’s 2021 draft class accounted for, except for Amari Rodgers, who remains unsigned.

That cap figure also only accounts for the top-51 contracts on the roster—and as we all know, there are 53. It also doesn’t factor in the cost of fielding a practice squad or making sure that there are reserves for any in-season spending so that the team can sign a Tyler Ervin or a Damon Harrison, for example.

What cap-saving moves can still be made?

Depending on how training camp and the preseason unfold, there are some veteran cuts that could take place that provide some needed cap relief. I highlighted nine of those players in a recent article, which you can find here, but a few from the list include Lucas Patrick, Josh Jackson, and Oren Burks.

Another cap-saving avenue for the Green Bay Packers is with contract extensions. An extension adds new years on to the current deal — and real years, not voided years — which allows the team to convert a portion of a player’s base salary to a signing bonus and then spread the cap hit out over the life of the contract, rather than absorbing the entire cap hit in one year.

A few contract extension candidates include Davante Adams, Aaron Rodgers, Za’Darius Smith, and Adrian Amos.

Remember, the cap charges always come due

While there are a number of cap-saving maneuvers that can be made, and we’ve touched on them, at some point, those cap charges must come due. There’s no escaping them, but Green Bay has shown us that there are a number of ways to push those expenses into future years and avoid them for the time being.

According to Ken Ingalls, Packers’ salary cap guru, this offseason, the team has pushed $37 million worth of cap charges from 2021 into future years, with $22 million of that coming due in 2022. As we look ahead to next offseason, it’s going to be much of the same for the Green Bay Packers. Over the Cap already has them at $34.5 million over the projected cap, which means more difficult financial decisions will have to be made.

All contract info via Over the Cap and roster moves from ESPN