We had news recently that Cowboys offensive tackle Tyron Smith had agreed to restructure his contract with the team, reducing his massive $17.6MM cap hit. Thanks to Todd Archer of ESPN, we now have some details on the deal. Smith was headed into the last year of an eight-year agreement, so his restructure essentially functions as a one-year contract.
The newly restructured contract will be a one-year, $6MM deal with a potential maximum value of $17MM. He received a $3MM signing bonus for the changes and has his $3MM base salary guaranteed. The deal rapidly escalates from there with several playing time incentives. Smith will receive an additional $1MM bonus for each of these snap share thresholds: 50%, 55%, 60%, 65%, 70%, 75%, 80%, 85%, and 90%. This means that if he plays over 90% of the Cowboys’ offensive snaps, he will receive $9MM, one for each of the nine levels.
He can also receive playoff incentives, 75% of which are paid off of wins alone. The remaining 25% is paid if he plays over half of the team’s offensive snaps in those wins. He would receive $500,000 for each playoff win in which he plays the majority of the snaps. With four possible playoff wins, that’s a total of $2MM in playoff bonuses. Those plus the $9MM from the playing time incentives and the $6MM guaranteed at signing push the contract to it’s maximum value of $17MM.
Here is some other news on restructures from around the league:
- The Chiefs created some financial breathing room by restructuring star quarterback Patrick Mahomes‘s massive contract, according to ESPN’s Field Yates. The team converted $12MM of his 2023 roster bonus into a signing bonus, creating $9.6MM in cap space for the season.
- Yates also reports that the Steelers found some cap space by restructuring the contract of a star. Safety Minkah Fitzpatrick agreed to a restructured deal that would reward the Steelers with $10.07MM of additional cap space in 2023 by converting $13.42MM of his 2023 salary into a signing bonus.
- The Saints were able to gain some cap room by restructuring the deal of guard Andrus Peat, according to Nick Underhill of NewOrleans.Football. The team converted $4MM of his 2023 salary into a signing bonus, reducing his salary from $11.83MM to $7.83MM. He then took an additional pay cut to reduce his 2023 base salary to $1.5MM as the team voided out his 2024 salary, adding three more voidable years to the deal. The moves resulted in an additional $9.53MM in cap space for New Orleans.
- Another NFC South player reportedly took a pay cut as Panthers tight end Ian Thomas agreed to a restructured deal, according to Tom Pelissero of NFL Network. In his new deal, Thomas will earn $3MM in 2023 and $3.65MM in 2024. The deal creates an additional $2.88MM in cap space.
- Another report from Yates tells us that the Bills have agreed to a renegotiated contract with running back Nyheim Hines. While the details are not yet available, it entails a $1MM signing bonus and the opportunity to earn $4.79MM in bonuses, clearing out some cap space for Buffalo while providing some incentives for Hines next season.
- Lastly, following the tight end’s trade to the Giants, Darren Waller has agreed to a renegotiated deal with his new team, according to Yates. New York has converted $9.84MM of his 2023 base salary into a signing bonus. The move creates $7.87MM in additional cap space for the Giants.
I’d hope that by restructuring Minkah’s contract, it would signal the Steelers are still trying to shore up some holes. Even Cam is saying they still need help on the D-line
You need a PhD to understand all these restructuring and cap savings. The only thing I do know is that with them you are really just kicking the can down the road into further years on dead money. I think? Don’t understand how you can go from a $17m cap hit in the final year of contract to $2m because they convert the money to signing bonus and incentives?
How about just do it simple, whatever you pay the person that year is his salary cap hit. So if he gets a $5m signing bonus and a salary of $5m his cap hit is $10m. And if the next year his salary is still $5m on that 2 year deal his cap hit is $5m.
Besides the signing bonus which is spread across a maximum of 5 years and not likely to be earned incentives, essentially a 1 year defferal, and cash a player receives must be counted against that years cap. Void years have created much of the confusion amongst people, as players count against the cap, but are no longer under contract. You can add void years by paying the player a signing bonus and spreading over years not covered under the players contract. So Dallas will have Tyron Smith clogging up their cap when he no longer plays at the level his cap hit suggests, and with his contract over, there will be no way to dampen the hit. See the Saints and Bucs for prime examples.
The Khan artist at it again
Maybe. Maybe not. Restructuring Minkah was nice. Could have done the same with TJ. Still some big problems here. Maybe he’ll pull a rabbit out of the hat
When is a contract a contract?
Other sports, like baseball, sign a contract and abide by the terms for the duration of the contract, even if it later becomes an albatross.
Everytime a football team needs money because they won’t stay under the salary cap, they “re-structure” someone else’s contract to fit them in.
A contract should run the length of the agreement without any adjustments or re-structuring.
Teams need to learn how to structure their roster and sign players with the money they have left under the salary cap.
If you need to add a player, then just cut another player to make room under the salary cap.
This is nothing but an exercise in “creative financing.”
To be fair, MLB doesn’t have a salary cap. A better comparison would be the NHL, where the value of a contract is only reduced via buyout or a mutually agreed-upon contract termination. But you do make an excellent point.
Okay, I’ll bite.
You sound mad that you don’t understand the complexities of these contracts. That’s okay, most people don’t. But until their contracts are guaranteed, this is what you’ll have. And since contracts will never be guaranteed, this is what you have.
But if we’re being honest, it’s not that hard to understand the idea of “2023 base salary converted into signing bonus” creates cap space for 2023.
I think I agree with you that NFL contracts will never be fully guaranteed. The sport unfortunately lends itself to traumatic injuries in many cases. I believe that the league has improved its safety standards, but I doubt much more can be done without ruining the game. I’m always glad to see that players seem to be getting better paychecks. It’s a tough sport but we love it.
Steelers just signed Isaac Seumalo for the O-line. Gotta love the new front office