7 Contract restructures to help Packers get out of salary cap hole

INDIANAPOLIS, IN - MAR 01: Brian Gutekunst, general manager of the Green Bay Packers speaks to reporters during the NFL Draft Combine at the Indiana Convention Center on March 1, 2022 in Indianapolis, Indiana. (Photo by Michael Hickey/Getty Images)
INDIANAPOLIS, IN - MAR 01: Brian Gutekunst, general manager of the Green Bay Packers speaks to reporters during the NFL Draft Combine at the Indiana Convention Center on March 1, 2022 in Indianapolis, Indiana. (Photo by Michael Hickey/Getty Images) /
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The Green Bay Packers again find themselves in a salary cap hole this offseason, and to get their way out of it, they will have to restructure a number of contracts.

At the moment, Over the Cap has the Packers at $16.48 million over the 2023 salary cap, and there are really three ways for Green Bay to go about creating that needed cap space. They can cut a player who has a larger cap hit than dead cap hit. They can restructure a contract. Or, in the right situation, extend a player.

When it comes to roster cuts and extensions, the Packers have few options. As I’ve written previously, over $10 million in cap savings can be had by moving on from Aaron Jones, but for a team that needs playmaking, this makes little sense. Whether it’s Aaron Rodgers under center or Jordan Love in 2023, the goal should be to win as many games as possible. This will clearly be the case with Rodgers, and to truly evaluate Love, Brian Gutekunst should put the best team around him, and that includes keeping Jones.

When it comes to Bakhtiari, the Packers can save $5.7 million by releasing him, which in the grand scheme of the NFL salary cap, is a relatively small amount–especially for a player who was still playing at a high level when on the field. And although his status from week to week in the first half of the season was unknown, Bakhtiari’s knee really wasn’t an issue during the second half. In short, 13 games with Bakhtiari is more valuable than $5.7 million in cap space.

The only real contract extension candidate is Rashan Gary, and in an offseason full of difficult decisions, this will be one of the easier moves that Gutey has to make.

This leaves contract restructures as the Packers’ most likely path to clearing that cap space and getting out of the red. The way a restructure works is that the team will oftentimes take a portion of a player’s base salary or roster bonus and convert it to a signing bonus.

The benefit of this for the team is that the entire cap hit from the base salary — or roster bonus — is incurred in the current season. So an $8 million base salary counts as an $8 million cap hit. A signing bonus, however, can have its cap hit spread out over the life of a contract. For example, if a player has an $8 million base salary with three years left on his contract, $6 million could be converted to a signing bonus, with $2 million staying in the current year, $2 million going to Year 2 of the contract, and $2 million going to Year 3, thus lowering the current cap hit from $8 million to $4 million.

The downside to this approach is that the cap hits in those future years do increase because of the additional cap charges being kicked down the road. Another term you may hear with a restructure, and something the Packers have done frequently the last two seasons, is adding voided years to a deal. Essentially, these are years added on to a contract for bookkeeping purposes.

The actual contract length itself doesn’t increase — this isn’t an extension — but on paper, it gives the Packers more years to push cap charges into. You will see this strategy utilized most often on contracts with just one or two years remaining. Then once the contract voids, all of those cap charges that were pushed into the voided years come due and fall on the current year’s books.

Adrian Amos has a voided contract that terminates this offseason, and unless extended, he will leave behind a dead cap hit of $7.9 million that will count towards the Packers’ salary cap in 2023, even though he will potentially be playing with a new team.

Unlike with roster cuts or extensions, the Packers have a number of contract restructures at their disposal. Below, Over the Cap gives their projections on how much cap space could be created with each move.

Rasul Douglas: $2.23 million

De’Vondre Campbell: $2.76 million

Aaron Jones: $10.89 million

Preston Smith: $6.62 million

Kenny Clark: $10.9 million

Jaire Alexander: $9.39 million

David Bakhtiari: $7.86 million

In addition to creating enough cap space to get solvent, the Packers also have other expenses not yet reflected. They’ll, of course, need cap space for any free agent signings they are going to make, as well as for the upcoming draft class. Green Bay will need room to roster a practice squad, along with space for any in-season moves that are made. So, in reality, the Packers have to clear quite a bit more cap space than just the $16.48 million that they are in the hole.

Green Bay, along with every other NFL team, has to be out of the red by March 15th, which is when the new league year begins, and free agency opens. So you can expect some of these moves to begin taking place in the not-so-distant future.