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Saving the Cap - Why Restructuring Mario Williams Won't Work

9/18/2015

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By Paul Wanecski

 

Many fans seem to be under the impression that creating salary cap room is easy. While some contracts are easy to restructure, more often than not the majority of contracts make it difficult to shift dollars around. All things with a player’s contract come with circumstances and consequences. The Buffalo Bills are set to exceed the salary cap next season already (these numbers will change, but it is alarming to look at). Given what we have heard from a lot of fans, simply restructuring Mario Williams’ contract is not an option for the Bills to counter-act this.

 

It is important to note that players have to agree to a contract restructure. The team cannot change a player’s pay when a contract is signed without authorization. If Mario Williams decided that restructuring his contract was not in his best interest, he doesn’t have to allow it. Players like Drew Brees, for example, consistently restructured his contract in New Orleans to help free up salary cap space (and also usually got a nice check in the form of a new signing bonus each time). The problem with Brees was that his salary cap number skyrocketed over the years from the Saints deferring dollars into the tail-end of his contract, which made his deal practically impossible to swallow against the salary cap. Players usually don’t mind restructuring as the team is taking money in the form of base salary and turning into a signing bonus with is then prorated over the life of the remaining years of the contract. This gives the player money that they originally hadn’t earned yet up front and who can argue with that?

 

This is where the term “restructuring” gets over-used. Unfortunately for the Bills, Mario Williams’ contract contains so much guaranteed money and prorated signing bonus already that a simple restructuring (when base salary is converted to signing or roster bonus) will not offer any significant cap relief. Here is the current structure of his deal as it stands from Overthecap.com:

Contract Breakdown

 

You can see several unique bonuses built into Mario’s contract. He earns a $400,000 bonus for each Pro-Bowl. In 2014, he had a $10.6 million dollar roster bonus which is paid at that start of the year and only impacts the salary cap of that year, much unlike his signing bonus which currently is absorbing $5.4 million dollars for this year and the same amount next year. Because his salary cap number is nearly $20 million this year and next year, yes, Doug Whaley and team could try and shift some dollars into later years, the problem is that his salary cap figure is already $16.5 million for 2017 which is his age 33 season.

 

By comparison, at age 34, Dwight Freeney made $3.5 million. JJ Watt’s contact is set to expire prior to his age 33 season. Cameron Wake is 33 this year and his cap number is $10.4 million. Jared Allen is making $12.5 million this year, however, his contract was written so he only made $3 million the first year. This year appears to be a “catch-up” season because realistically he should be making about $8.5 million, also at age 33. Robert Mathis made $8 million dollars in his age 33 season. Long story short, Mario Williams’ contract is far exceeding his market value at his age for his position. So what is the solution to that?

 

Doug Whaley and the entire team at One Bills Drive know Mario’s contract is a time-bomb. He is going to be vastly overpaid in the backend of his contract and as it stands, not much can be done about it. Pushing dollars into the final year of his deal (by changing some of his base salary into a roster bonus) is possible but would bring little relief. The best solution would be to discuss a two year extension, building his contract to his age 35 season. Given the comparable, this would allow the Bills to restructure and shift dollars into the latter part of his contract. Is it risky? Every player is one play away from ending their career but older players carry significantly more risk. The goal should be to drop Mario’s base salary after age 33 to the $6-7 million dollar range. That may seem out of scope with the examples we just reviewed, however it is important to remember that the salary cap goes up every year, so the long angle on this is that base salary will be considered a bargain when the time comes. While that seems low, it will allow the Bills to take his massive base salary the next two years and consolidate that into a series of roster bonuses with a signing bonus. This gives maximum flexibility to the long term salary cap and gives Mario additional financial security in the short and long term. While it will be hard to get his 2016 year down below $16 million dollars because of the bonus money already in place (which could be removed but that typically indicates some sort of pay-cut has been installed in the deal), even doing a simple extension and restructuring would bring in line base salary and cap value at the end of the contract.

 

Simply taking the money that Mario makes now and trying to reallocate that does little good. By extending his contract, additional years allow for money to be distributed more evenly, ultimately lowering his cap impact. It is a common misconception that contract restructuring positively impacts all years on a contract. The opposite is true; it allows for short term cap relief, however, most restructuring just pushes dollars that have to be accounted for into later years. Once a signing bonus is given, that money will be counted against the salary cap and cannot be erased by a restructuring. Since Mario has $7.4 million in bonus money this year alone without figuring his base salary (as well as $8.4 million in bonus money next year without figuring his base salary), it is easy to see why you cannot just restructure his contract without extending it.

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