Extreme Makeover: Salary Cap Edition – New Orleans Saints

As the NFL moves further away from the pandemic, the job for every team’s salary cap department gets easier. While we don’t have a formal projection for the 2024 cap yet, it’s safe to say that number will end up north of $240 million, growing by more than $16 million for the second consecutive year. By the time March rolls around, there will be a lot of money burning holes in the pockets of a lot of teams. 

Not every team will be so fortunate, however. Looking ahead at the 2024 salary cap projections from Over The Cap — the best website for anything NFL salary cap-related on the Internet — there are 11 teams projected to be in the red in effective cap space, which takes into account money to sign draft picks and fill out a full roster. Six of those teams have deficits of $20 million or more to navigate:

• New Orleans Saints: -$98.7 million
• Los Angeles Chargers: -$57.3 million
• Buffalo Bills: -$52.7 million
• Miami Dolphins: -$51.3 million
• Denver Broncos: -$26.8 million 
• Dallas Cowboys: -$21.4 million

These six teams are the ones we’ll take a closer look at in a series of articles this week, examining how each squad can get back in the black this offseason. Before we dive in, here are some quick salary cap-related notes and definitions, as this can be a complicated subject. 

• Salary cap: The cap is the maximum any NFL team can spend on player salaries. Essentially, every team gets the same pie and can choose how to split it up, with various accounting mechanisms to manipulate how much cap space is available in any given year. 
• Dead Money: A term for money that has already been paid to a player and will count against a team’s salary cap no matter what. Most of the time this comes from signing bonuses, either from when a deal is initially signed or from restructures. When a player is cut, all the dead money remaining on their contract accelerates to the current year. 
• Restructure: An accounting trick teams can use to manage the cap in a given year. Signing bonus money is always prorated (spread equally) over the remaining years of a contract. That means teams can convert all but the minimum of a player’s base salary to a signing bonus and reduce the cap hit at the expense of increasing dead money in future years. 
• June 1 designation: Another accounting trick for teams — after June 1 when a player is cut the dead money is split over two years instead of all accelerating to the current year. Teams can designate two players per year as “June 1 cuts” and cut them before that date without the dead money hit, although they don’t get the resulting cap savings until after that date either. 
• Void years: Essentially “dummy” years that are added onto a deal, usually to help spread out the cap hits with restructures. They are not actual contract years that teams or players are required to fulfill. 

If you’re a visual learner like me, Over The Cap’s team cap calculator is a handy little tool to play around with and get a sense of how all of these terms and numbers shake out in real life. I leaned on it heavily when breaking down the cap situations and path forward for these teams. 

With the homework out of the way, let’s get into it…

New Orleans Saints: -$98.7 million

This will be the fourth year I’ve done a version of this piece looking ahead at the salary cap situation. Every year, it’s been the Saints with the most work to do to balance their books. But in 2024, the Saints will face their biggest deficit yet. They will need to create well over $100 million in cap space to be able to function this offseason. 

They’ve created well over $100 million in cap space each of the past two offseasons in order to have room to operate, and this coming offseason they’ll need to do that much just to break even. 

Despite the sticker shock that number might give some people, it’s not a surprise to the Saints. New Orleans has created over $100 million in cap space each of the past two offseasons and are in this position partially by design. The Saints have been one of the most aggressive organizations philosophically when it comes to cap management and restructuring contracts for years. 

Two guiding principles are behind the Saints’ salary cap tactics over the better part of the last decade. The first is a desire to always compete, eschewing a reset or a rebuilding year in favor of maximizing the chances in any given year of contending for a Super Bowl. When they had Drew Brees throwing passes and Sean Payton coaching, that made a lot of sense. 

The second is that a dollar in cap space today is worth more than a dollar in cap space tomorrow due to the NFL’s consistent salary cap growth over the last two collective bargaining agreements. In the last CBA, the cap grew by about $10 million a year and under the latest one it looks like it could grow by $16 million or more annually. That growth made cap space in the present more valuable than cap space in the future because it represented a bigger percentage of the overall pie, and it helped the Saints offset the money they were pushing out to future years. 

Since then, Brees retired, Payton resigned and a global pandemic caused the NFL salary cap to drop for the first time in a decade. But the Saints doubled down on their cap strategy, and it’s fair to question the wisdom of that given the results. They’ve failed to run away with a horrid NFC South, their offense is stagnant despite paying up for veteran QB Derek Carr this offseason, and their aging defense won’t be able to keep them afloat forever. 

This offseason presents another interesting pivot point. If the Saints end up missing the playoffs, they will have to consider making major changes to the coaching staff and front office. They’ve resisted shaking things up in the name of continuity but that gets harder and harder to justify without results. If they decide they finally can’t avoid hitting the reset button, all bets are off for how they’ll proceed. 

Carr Troubles

The challenge is the Saints have already boxed themselves in to some degree for 2024. New Orleans guaranteed Carr his entire $30 million base salary in 2024, plus a $10 million roster bonus in 2025 that becomes guaranteed on March 17, 2024. The only way to cleanly escape all of that is via trade, and given the way Carr has played this season it’s highly improbable another team bails New Orleans out. Cutting Carr before his bonus is due would at least save $10 million but then the Saints would need to find a new starting quarterback with $30 million less to work with. 

Maybe that’s the best option in the end, but it’s clear from the way the contract was structured that both sides envisioned at least a two-year commitment. There are void years through 2029 that would enable New Orleans to restructure Carr’s deal for maximum savings in 2024 and 2025. Restructuring Carr in 2024 would add $23 million in much-needed cap flexibility, but it would limit their options again the following offseason by increasing the dead money burden. The Saints have to evaluate if that still makes sense — regardless of what the plan was back in March. 

Restructure Candidates

Let’s leave Carr’s contract alone for a moment. The Saints will need to restructure a long list of players to get under the cap even if they do decide to hit the reset button. Here’s the list in table form: 

*only one decimal shown, simple restructures w/ no void years

Star CB Marshon Lattimore and RT Ryan Ramczyk top the list as core players. Even though they’re older, DE Cameron Jordan and LB Demario Davis are also likely restructure candidates. The Saints guaranteed Jordan $13 million in 2024 in his new deal this past summer, and Davis is still playing at a high level even though he’ll be 35 soon. 

Doing max restructures with void years for those four players would create a little over $40 million in cap space. A big chunk, but still not even halfway there, so let’s go ahead and add C Erik McCoy, G Cesar Ruiz and DE Carl Granderson to the restructure list. All of them have signed extensions in the past couple of years and Ruiz and Granderson have bonuses in 2024 designed specifically to be restructured. That adds another $21 million.

Players like RB Jamaal Williams, DT Nathan Shepherd, OT James Hurst, S J.T. Gray, TE Foster Moreau and DT Khalen Saunders aren’t core players, but all either already have guaranteed money or have played well enough to be in the team’s plans in 2024. Restructuring their contracts creates another $11 million. 

That takes us to some trickier decisions. The two biggest remaining cap hits on offense, outside of Carr, belong to RB Alvin Kamara and jack-of-all-trades QB/TE Taysom Hill. There’s a case to be made those two have been the Saints’ best — or at least their most consistent — players on offense this season. But Hill will be 34 in 2024 and is still a gadget player the Saints sometimes struggle to integrate effectively into the game plan. Kamara will be 29 which is nearly the equivalent of 34 in running back years. Restructuring either player comes with some downside. 

Still, the Saints don’t have a lot of options and the way Kamara and Hill have played in 2023 will engender some confidence. Kamara’s deal actually already includes a void year for a 2024 restructure which would save $8.1 million. Restructuring Hill’s contract adds another $6.6 million. 

That’d be enough to put the Saints in the black, but they’ll need more space to fill out a full 53-man roster and sign their draft picks, let alone make any other moves. They will have one June 1 designation to use after cutting WR Michael Thomas — probably for real this time after the two sides hammered out a last-minute extension last year. Both G Andrus Peat and QB Jameis Winston are candidates, but using it on Winston would save just a little bit more in cap space, which would not hit the books until after June 1. That’s $7.3 million the Saints can put toward signing draft picks and an in-season budget for practice squad and injury replacements. 

Other contracts the Saints can look toward to create space include the ones for S Tyrann Mathieu, S Marcus Maye and TE Juwan Johnson. All three will be entering contract years in 2024. The savings for cutting each player would be minimal but restructures would net over $14 million in additional cap space. Both Maye and Mathieu are over 30 and Johnson didn’t follow through on what was expected to be a breakout season. But at the risk of sounding like a broken record, the Saints don’t have a ton of options. 

TL;DR

That was a lot of words to say the Saints basically need to restructure everyone not named Derek Carr to even field a team in 2024. Maxing out everything and using June 1 cuts on Thomas and Winston gives the Saints around $13 million in effective cap space, which is enough to maybe sign a cheap veteran or two, not materially address a flawed roster outside of the draft.

If they run it back with Carr, they can add another $23 million via restructure that gives them a respectable offseason budget — albeit one with no margin for error. But if the Saints want to get off this hamster wheel of constant restructures, they probably need to make Carr a June 1 cut, draft a replacement or start 2023 fourth-rounder Jake Haener (or both), max out their restructures and operate on a shoestring budget with an emphasis on finding young, cheap contributors for 2025 and beyond. 

It will be fascinating to see which path the Saints choose.