By: Mike Patt
Hello sports fans, and welcome back to the IE Sports Radio Blog. The Super Bowl match-up has been set, and congratulations to the Kansas City Chiefs and San Francisco 49ers for making it to the championship game. For the other 30 teams, the off-season has begun. For 18 of them, this has been the case for a few weeks. Some of these teams have excellent salary cap situations, while some do not. The worst case is the New Orleans Saints, who currently sit around $83 million over the projected salary cap for the 2024 season. This will need to be corrected before the league year begins on March 15th, and is not going happen without some complications.
Before we dive into the fix, let’s look at how the Saints ended up here. They were one of the first teams to extensively use “void years”. Void years are a salary cap tool that allows teams to disperse some of a player’s cap hit over years in which they are not under contract. For example, let’s sign I sign a player to a one year, $5 million contract. As part of the contract, I give that player a $3 million signing bonus, and add two void years. This allows me to divide the cap hit of the bonus over three years instead of one. As a result, their total cap hit in year one is only $3 million, even though I paid him $5 million, but their are two years after with $1 million hits. It is a short term gain deal with it later approach, and this is a tame example compared to what teams do.
When COVID hit, the NFL reduced the salary cap in correspondence with the lost revenue from the pandemic. Teams reacted in different ways to this change. New Orleans circumvented this by signing players to heavily backloaded contracts (low cap hits to start, high cap hits towards the end of the contract) and void years. This allowed them to assemble a talented squad on paper, and the long-term ramifications of this approach would have been worth it had the Saints been successful as a result. However, they have one playoff win in the past four years, and have failed to make the playoffs in three straight seasons.
It did not have to come to this point either. New Orleans had an opportunity following the 2021 season where they could have absorbed significant dead money (cap space lost to guaranteed money remaining on released player’s contracts) and drastically reduced the long-term impacts of these deals. However, doing so would have essentially forced them to tank, and the front office decided that this was not an option for them. Last year, they could have taken a similar approach, but they would have had to absorb penalties last year AND this year. Again, not in the cards with the front office. With that said, let’s take a look at how to handle this year’s dilemma.
Get Under the Cap
As I stated earlier, New Orleans has to get under the salary cap by March 15th. This will require them to trim around $83 million worth of salary; more if they want to sign free agents (which we will get to in the next section). Normally, teams would use a combination of re-structuring contracts and releasing/trading players to accomplish this. In analyzing the current contracts, virtually none of them offer any relief if players are released or traded. Doing June 1st cuts (which allow teams to split dead money between this year’s cap and next year’s) will not help either, as the team would not realize the savings until June. This leaves re-structuring as the only outlet.
There is a bit of irony in this result, as restructuring contracts in 2022 and 2023 contributed to where they are now. Still, the team will have to re-structure every deal they can in order to accomplish their task. This will convert non-guaranteed base salaries and roster bonuses into guaranteed option bonuses, which will then be spread out over the remaining years/void years to lower this year’s cap hit. I know, we are back to the short term gain long term problem tactic, but the Saints legitimately have no other choice. One article suggested making underperforming veterans take pay cuts as option. Given the leverage the players have with guaranteed money (low likelihood of being released), this would be challenging to say the least.
There are two contracts that the Saints should not touch; RB Alvin Kamara and TE Foster Moreau. The team should keep half an eye on the future, and Kamara and Moreau would represent significant savings via release or trade in 2025 if their contracts go un-modified. I know I will catch some flack for suggesting the release of Kamara, but the reality of the situation suggests it is possible. There is one player I would try to trade, and that is DE Payton Turner. The former first round pick has appeared in only 15 games an recorded 3 sacks in his first three seasons. Trading him would save about $1.5 million, which is a drop compared to the total needed. He is one of the few guys who would actually save money in a trade, so I would give that a shot.
Most Free Agents Leave, Virtually No Signings
The list of pending free agents for the Saints this off-season is not extensive, but there are key names. QB Jameis Winston, OL Andrus Peat, and CB Isaac Yiadom are among those who are un-restricted, meaning they have more negotiating power. In order to re-sign players like this, or free agents from other teams, the Saints would probably have to clear an additional $10-$15 million in cap space. They already have to clear extra space for draft picks. Based on the contracts currently on the roster and the work they already have to do, I do not see that happening.
There is good news on this front. New Orleans has several players under exclusive rights, meaning they can offer a good value contract that the player must sign. One key player with this designation is WR Rashid Shaheed, who is an important piece on offense. The Saints will also benefit from the top 51 rule, which means that only the top 51 contracts count towards a team’s cap. There are 55 players currently under contract, which means any additional signings will bounce a lower contract from the list, reducing the total impact of the new signing. This is not going to save much, but every little bit helps.
The Derek Carr Situation
One of the more interesting components of this off-season revolves around a very important position. In 2023, the Saints signed Derek Carr to a 4-year, $150 million contract. It was maybe more than you would expect a 32 year old signal caller who did not win very much in Oakland/Las Vegas to receive, but nonetheless, the deal was signed. His first season actually looked really good…on paper. The eye test and general perception is that Carr is just a stop-gap option until they find the future of the franchise. If that is the case, he is an expensive choice for that role.
It would be very difficult for New Orleans to correct this year’s situation without doing something about Carr’s $35.7 million cap hit. His base salary is guaranteed, so releasing or designating him a post-June 1st is out of the question. The team has two choices, the first pf which is (you guessed it) restructuring. The Saints could do a significant restructuring of Carr’s base salary, which would greatly assist in getting under the limit and potentially open the door for free agent signings. The problem is that this move would add severe complications to his 2025 salary situation. It would not be impossible, but it would add another layer to an already dense problem next year.
The other option, and one that is quite intriguing, would be to trade Carr. In a trade, the partner would assume the responsibility of handling his base salary, so that guaranteed portion get’s removed from the Saints books. This brings Carr’s dead money below his cap hit, providing a tangible benefit to make the move. It would not save as much as a restructuring, but since all of his remaining dead money would be absorbed in 2024, New Orleans would see significant savings in 2025 and 2026. It would be a massive step towards digging themselves out of this hole.
There are problems here as well. For one, the Saints would have to find a new QB. Ideally, they would pull one back in the trade as long as the salary is not too rich, but the more likely option is to draft one. The other problem is finding a trade partner. New Orleans would need to find a team that has ample cap space to handle Carr’s contract, a need at the position, and would either have to be out of position to grab a top prospect in this year’s draft or need a veteran to go with a top young prospect. There are a few teams that fit this description (including one of my personal favorites), but that discussion could be a blog post all in itself. My expectation is the restructuring approach, but stranger things have happened.
Draft Approach
One of the main ways New Orleans can get out of this situation is through the draft. Rookie contracts, especially those after the second round, are much more affordable than free agent contracts. The more players you can add through the draft, the easier it will be to build the foundation of the roster with lower cap hits. Currently, the Saints have nine projected picks in the 2024 draft including compensatory selections (these are picks given to teams who lose valuable free agents). Seven of these are expected to fall in rounds five through seven, which is excellent. Ideally, this number needs to increase to 11-12 picks total, 8-9 falling on day three.
The best way to add picks is through trading back. I understand this is not the most attractive option, but moving back in the first round will net you those extra picks while leading to a lower contract and still offering the opportunity to add an impact player with a fifth year option. In terms of positional needs, assuming all free agents depart, wide receiver will be at the top of the list. Linebacker will need some attention, and the secondary and offensive line will need depth in the later rounds. Quarterback will be an intriguing spot to watch depending on how the team handles the Derek Carr situation as described above.
Further Complications
There are several ways New Orleans can manage this situation, but no one way leaves them free of further complications. The restructurings will increase their salary cap commitments for 2025, 2026, and beyond. They already have $300 million committed for 2025, and depending on what moves they make, that number will increase by possibly another $30 million. This is why certain decisions make more sense to help reach the goal of getting out of this mess. Unfortunately, the Saints may end up in a position where they make moves with harsher long-term ramifications. This will lead to more restructuring next year, but that is a fate that is unlikely to be avoided.
Losing free agents will stink, but will help in one aspect. Assuming the big name players sign decent contracts elsewhere, and New Orleans does not sign significant contracts on their own, they are in line to add multiple compensatory picks in the 2025 draft. These will be later round picks as well, which is fantastic for this scenario. If New Orleans can string together a few drafts in a row with 10-12 picks, and build a roster that is filled over half way with players on affordable rookie deals, then that will help shine the light at the end of the tunnel. The goal should be to be near the end of the problem by 2026, and back to a normal state (if such a thing exists) by 2027.
Now, it’s not all bad for the Saints. Depending on what of the listed above actions occur, the team will return a large portion of a roster that had a winning record and positive point differential in 2023. With their division opponents not guaranteed to make massive improvements, they should be contenders. A 2024-25 playoff run would help ease the headache caused by the salary cap situation. Tune in to let’s wine about DMV Sports, hosted by Mike Patt, on Fridays at 9PM EST/6PM PST. Check out all of the great shows throughout the week on IESR, as well as the live calls on our partner station USRN. Shout out to our sponsor, Planet Jerky, and all you loyal listeners who continue to help our network grow. Thank you for reading, and we will see you next time on IE Sports Radio; your direct feed for ALL that is sports.
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