Jason Fitzgerald

Jason is the founder of OTC and has been studying NFL contracts and the salary cap for over 15 years. Jason has co-authored two books about the NFL, Crunching Numbers and the Drafting Stage, which are widely circulated in the industry and hosts the OTC Podcast. Jason's work has been featured in various publications including the Sporting News, Sports Illustrated, NFL Network and more. OTC is widely considered the leading authority on contract matters in the NFL.

Recent Posts by Jason

OTC Podcast: January 28, 2023

In this week’s (very long) OTC Podcast:

  • Aaron Rodgers contract and trade thoughts
  • QB salaries and playoff success
  • All your questions for the week

Listen on Google Play Music

QB Salary Cap Charges and the Playoffs

With the exits from the playoffs of Josh Allen and Dak Prescott this past weekend along with the rumored trade of Aaron Rodgers, there has been more and more discussion about the ability to win and how much the QB earns. We do some work on playoff roster analysis so I thought I could throw a quick post together looking at the top earner for each team in a given season (so not the spend on the entire QB room, just the top player) and how much that salary cap level made the playoffs.

For this post I looked at the last five seasons and determined what QB had the highest salary cap charge for a team. That might not mean that the player was the starter, just that this was what the team budgeted at the top level for the highest earning position on the team. Each cap number was then adjusted to be a percentage of that years unadjusted salary cap. The players were then binned by cap percentage 0-1%, 1-3%, 3-5% and so on. Finally, I grouped the teams into playoff and non-playoff teams.

I thought the numbers here were kind of interesting. When we look at playoff teams you can see that a good number are cheap players and then there is a peak in that moderate-high range between 11 and 13% of the cap before it falls down. While that is certainly a positive for the low cap number when we get to the non-playoff chart it also becomes pretty clear that while there is a high reward on those lower cost players there is certainly a risk factor as that is also our biggest group for missing the playoffs. Here is how the success rates break down for each range and what those ranges would be based on a $225M salary cap:

Cap RangePlayersPlayoff RateMin Cap (2023)Max Cap (2023)
Under 1%540.0%$0$2,250,000
1-3%2544.0%$2,250,000$6,750,000
3-5%3735.1%$6,750,000$11,250,000
5-7%1540.0%$11,250,000$15,750,000
7-9%825.0%$15,750,000$20,250,000
9-11%1827.8%$20,250,000$24,750,000
11-13%2259.1%$24,750,000$29,250,000
13-15%1650.0%$29,250,000$33,750,000
15-17%955.6%$33,750,000$38,250,000
Over 17%520.0%$38,250,000$47,000,000

I think this gets us deep into the concept of risk and reward. The groups that have the highest success rate clearly are the most expensive players with over 50% of the teams spending between 11 and 17% making the playoffs. I would imagine when all is said and done with restructures that group would include players like Mahomes, Allen, Prescott, Rodgers, Cousins, Watson, and Goff next year. But it is certainly not 100% and too often the hit rate is considered to be just that and then you are left bitterly disappointed when you are one of the 45% or so of the teams on the outside looking in.

The other number that stands out, and it’s a very small group, are the teams that have been forced to carry a QB at a super high cap charge. There have only been five and the only one to make the playoffs was Mahomes this past year. While 17% is no magical number I think this is something to keep in mind for cap planning that when you do have one of these veterans under contract you should aim to keep the structure within a certain range. There may be no need to max out the restructures and instead should try to keep the numbers manageable year after year.

When we get into our cheaper players our success rates drop to about 40%. These are mainly going to be draft picks with a few exceptions for journeymen players like Jameis Winston, Mitchell Trubisky, and Marcus Mariota. The worst range is that 7 to 11% range which is mainly going to comprise those players who got a starting job off a small sample of games like Nick Foles, Teddy Bridgewater, and Case Keenum or were trade ins like Carson Wentz. This is no mans land in the NFL and generally speaking a waste of a team’s time if its not a pure cap manipulation for the front end of a veteran player’s contract.

What about long term success?  Here is the average spent per top QB, as a percentage of cap, by playoff appearances.

Playoff AppearancesAvg. Cap Spend
55.7%
46.8%
39.3%
28.0%
16.7%
07.8%

The team with 5 is the Chiefs but this group of teams that hits the 4 and 5 are mainly high end rookies during their rookie years and their initial extension years when the salaries drop lower. The peak spend comes from teams with 2 and 3 playoff appearances, which are mainly the teams with the Cousins type QB contracts.

Here is a look at the five year average salary cap spend and the average playoff appearances per group.

RangeTeamsAvg. Playoff Seasons
13-15%32.7
11-13%41.8
9-11%32.0
7-9%81.9
5-7%53.0
3-5%91.7

Again you can see the upside that comes from the long term of being able to have that salary cap figure remain low over a long term with our 5 to 7% averaging 3 playoff appearances in the last five years compared to 2.7 for the most expensive capped teams (these teams are the Vikings, 49ers, and Packers on the expensive end and the Bengals, Chiefs, Ravens, Patriots, and Browns on the lower cost end). Granted these are all small size groups but I think it helps to illustrate that the unknown of draft is often no worse than going nuts navigating the cap each year just to have about the same success rate.

The Salary Cap Impact of Trading for Aaron Rodgers

With the rumor mill circulating about the future of Packers QB Aaron Rodgers I received a number of questions today, mainly from Jets fans, pertaining to his contract and his salary cap charges if he were to be traded.  As I mentioned before when discussing Rodgers, his is a complex contract and the different “if’s and when’s” of the deal make it hard to present on OTC to cover all the various possibilities, so let’s break down the various costs.

A team who trades for Rodgers, as long as he is traded for prior to the regular season, would inherit Rodgers guaranteed 2023 salary, which is $59.465 million. If the team trades for him during the workout portion of the offseason that would be increased by $50,000, which is a workout bonus he will earn if he shows up for three days of the program. The team would also be responsible for a $49.25 million injury guarantee in 2024. That salary would be fully guaranteed if Rodgers is not released a few days following the Super Bowl in February.

Because these salaries are so large there is a great deal of confusion as to how a team could fit Rodgers under the cap, but that is where more of the complexity of the deal comes in. A team that acquires Rodgers (or the Packers if they keep him) has the option to pay Rodgers 2023 salary as a $1.165 million base salary and a $58.3 million option bonus. For salary cap purposes that option bonus is prorated across four years for a charge of $14.575 million per year. In 2024 the team has another option that allows them to split the salary up as $2.25 million in base salary and a $47 million option bonus, which for cap purposes would be prorated over three years at a charge of $15.666 million per year.

Rodgers also has a 2025 and 2026 season in his contract at very low salaries of $20.9 and $15.05 million. For all intents and purposes these are void years as there is no scenario that would see Rodgers playing at these salaries. My assumption is they were only included in the contract to make it easier to work out a retirement on the cap in 2025 and/or drive the APY on the contract lower so it would never look as if Rodgers received a $50M+ per year contract.  

Here is the breakdown of how the trade would look on the salary cap assuming that both options are exercised and he is traded before the workout period this year:

YearBase SalaryOption 1Option 2Roster BonusWorkout BonusSalary Cap Charge
2023$1,165,000$14,575,000$0$0$50,000$15,790,000
2024$2,250,000$14,575,000$15,666,666$0$50,000$32,541,666
2025$15,850,000$14,575,000$15,666,666$5,000,000$50,000$51,141,666
2026$10,000,000$14,575,000$15,666,668$5,000,000$50,000$45,251,668

As you can see the salary cap charges are very resonable for the 2023 and 2024 season and low enough in 2023 where arguably any team in the NFL could trade for him and absorb that hit.

The dead money in the deal could become concerning and there is no guarantee that Rodgers would even play more than this season for a team. If Rodgers decided he did not want to play in 2024 the team would sign him to a new contract that is really just for salary cap purposes. The contract would eliminate the 2024 option bonus and allow the team to carry Rodgers on the cap until June at a charge of about $16 million which would reduce to $14.575 million on June 2.  The team would be responsible for $29.15 million in dead money in 2025.

The bigger charge would be if the team decided to walk away from Rodgers rather than allowing the guarantee to kick in. At that point they would lose their ability to June 1 him and instead would take on a cap charge of $43.725 million in 2024.

The dead money numbers get larger if Rodgers were to be on the team in 2024.  At that point the team would have sunk costs of $30.242 million in each of those two “dummy” seasons and likely a player no willing to play for $20 million in salary or simply not play at all. The cleanest option here would be retirement where they would do the same thing mentioned before about taking out all bonuses from that year and process him as a June 1 retirement and take on a $30.242 million cap hit as dead money in both 2025 and 2026. If the two sides part ways then the team would take on a massive $60.483 million cap charge in 2025.

As for the Packers, they would take on $40,313,570 in dead money if they were to trade him. This is the prorated portion of the contract that comes from his $40.8 million bonus received last season and the remaining proration from a $14.26 million bonus from 2019 and a $14.465 million bonus from 2021. These costs do not travel to the new team.

An interesting option for Green Bay would be to delay the trade until after June 1, which would allow the Packers to split the dead money up as $15,833,570 in 2023 and $24,480,000 in 2024. In that scenario they would be required to carry Rodgers until June 1 at his current Packers cap charge of $31,623,570, which certainly does not help for free agency but would when it came time to sign rookies.

While this would be a highly unusual approach, Rodgers would likely not be much of an offseason participant anyway and it would allow the Packers to defer draft compensation until 2024. While I have no idea what a trade package for Rodgers would look like, given his huge salary this year and age, I can’t imagine a team throwing the farm for him since he may very well be a one year rental. Recent trades for Deshaun Watson, Russell Wilson, and Matt Stafford were for much younger players who were likely to sign extensions with their teams. Each was a trade with a logical time horizon of four to five years, not one. The two sides could easily set compensation based on performance in 2023 and Rodgers roster status in 2024.

Rodgers does not have a no trade clause in his contract so the Packers can trade him with or without his permission, but one would think that any team trading for him would need assurances from him that he will play for them. If Rodgers would like to play for one of the teams in the veteran “QB hunt” he would probably need to make a decision sooner rather than later.

Right now teams in the market for a QB are going to monitor Rodgers situation, Lamar Jackson’s situation in Baltimore, Derek Carr’s situation with Las Vegas, and the free agency of Tom Brady and Jimmy Garoppolo.  Carr would be the first domino to fall with a trade either being agreed to right after the Super Bowl or his release coming that week. Teams would be free to sign Carr in February if he were released. Jackson’s franchise tag deadline will be March 7th. Teams will know at that point if Jackson will receive the non-exclusive or exclusive tag and if he were or were not to be available via trade. Free agency begins on March 15 at which point Brady and Garoppolo will be free to sign with any team they choose. Ryan Tannehill may also be an option at that point as well if he is released by the Titans. Team’s cant really sit and wait on Rodgers if these other options are in any way appealing only to have him decide he only will play for Green Bay in April.

2023 NFL Salary Cap Space Update

In the last few days you have probably noticed a number of changes to every teams estimated salary cap space for 2023 and I just wanted to take a second to explain what all the changes have been as I have gotten more than a few questions about it.

Right now we are working with an estimated salary cap of $225 million for each team in the NFL and this is the same number that we have been using since last year. This number could go up or down by a few million (the NFL thus far has only said the cap may exceed $220 million) but it should be a fair estimate. This week we added what should be the official 2022 carryover figures for each teams adjusted salary cap. Sometimes these have some minor changes but will most likely remain constant.

The other thing that we added were estimates for adjustments to every teams salary cap. These adjustments come from incentives that were earned but not counted on the 2022 cap, incentives that went unearned but counted on the 2022 cap, per game bonuses that were not earned, guaranteed salary recovery, termination pay that went unfiled and so on. These numbers are not official and may change by a lot but I think it is better to show some of the changes when we know that some changes could have a big impact on cap room, such as Geno Smith earning his incentives this year. We did not yet include the workout bonus hold. That will reduce each teams cap by close to $1 million when we add it on.

This week we also began adding the futures contracts which have been signed so far. This is where the bulk of the cap changes came from. In the modern NFL teams no longer carry large rosters year over year so there are big changes in roster size from the end of the regular season (or when a playoff team is eliminated) to the first week of the offseason. For the most part teams will sign most of their practice squad players to a “futures” contract and those numbers are now much bigger thanks to the 2020 CBA which finally saw the minimum salaries rise for inexperienced players.

The minimum for an NFL player in 2023 will be $750,000 so that eats the salary cap away very quickly. Because of that for teams that have less than 51 players under contract, the best way to estimate the cap room for each team is to take 51 and subtract from it the number of players under contract and multiply it by $750,000. That will reduce the shock of future signings’ impact on the salary cap.

On the salary cap page you can also view each teams “effective” cap space. This takes into account those future signs for you and also adds in the impact of the teams rookies who they will draft. This is probably the best estimate for how much room teams have to spend but teams have plenty of time to work around that number since rookies will often not hit the salary cap until mid summer.

One other thing to note during the offseason is that the numbers we have will differ from the occasional official NFL reports you see on Twitter or the NFLPA reports. While our numbers will always differ (those are official sources!) it is usually more glaring in the offseason. Typically this is from two things. One are restructures of contracts that we are not yet aware of, but the bigger one is the treatment of void years.

In order to present the most likely salary cap impact we will present the salary cap charges to reflect that the contract is set to void, unless it is a contract that is designed for a post June 1 release. For example we currently have Tom Brady’s salary cap charge at $35.1 million, which is the number it will be if the contract voids on the final day of the league year. The official figure until that date would be $10.8M plus whatever the void salary is (his cap could probably be as high as $50M or as low as $12M depending on what they have in there as a placeholder). When situations change we will change those numbers accordingly.

Just as a reminder you can view each teams salary cap space estimates on the cap space page. Also handy to work with the cap is our calculators that let you manage each teams roster. Our restructure page can give you an idea of the maximum that each team can create by “kicking the can” as much as possible on active contract. Finally the transactions page will break down the various cut and restructure mechanisms for each player over a certain cap figure. Just one side note that for very complex contracts like Aaron Rodgers these numbers are going to be off on trades due to the timing of options in the contract. We have articles on the site explaining them so if you see something that looks impossible for those big money QBs who are rumored to be traded don’t hesitate to ask for an explanation.

OTC Podcast: January 9, 2023

In this week’s OTC Podcast:

  • Should the Bears take a QB in the draft
  • The 7th seed in the NFL playoffs
  • All your questions for the week

Listen on Google Play Music

Michael Thomas and Saints Agree To Restructured Contract

As discussed here as a strong possibility a few months back, the saints and Michael Thomas have agreed on a restructured contract that will pave the way for his release from the Saints in 2023. Field Yates first had the details of the restructure for ESPN.

The new contract will effectively turn the 2023 season for Thomas into a void year without it technically being one. Thomas will carry a minimum salary for 2023 and will have a large roster bonus due in 2024. If the Saints fail to release Thomas prior to the 3rd day of the league year that bonus becomes guaranteed. This is all procedural on the part of the Saints as this now gives them a two day window to declare Thomas a post June 1 release and spread the salary cap charge out over two seasons rather than taking the hit all in 2023.

This is a salary cap concept first put into practice by the Eagles a few years ago as a creative way to June 1 a player whose original contract would not allow a June 1 release due to salary cap considerations. Prior to this move Thomas’ salary cap number would have been about $28.2 million in 2023 and his dead money $25.452 million. Had he been designated a June 1 cut the Saints would have had a $28.2 million salary cap hold until June 2, which was not really feasible for the team. On June 2, the cap number would drop to $11.813 million and the defer $13.639 million to 2024, but the cap damage would already be done.

with the new contract the team will carry a $13.15 million cap charge once they exercise the June 1 designation. That will then reduce to $11.993 million on June 2 with $14.181 million hitting the 2024 salary cap, creating $15 million in cap room over the original contract. The reason for the slight difference in dead money between the two scenarios is because the Saints paid Thomas a $902,941 signing bonus as part of the restructure. This was not a payment for doing the team a solid but covers the 17th game check that he was entitled to as a benefit as part of the CBA which he would have lost due to the restructure. If Thomas is physically unable to play football next year he can qualify for a injury protection benefit though the structure of this leads me to believe he is healthy.

Thomas’ contract became a minefield for the Saints with massive amounts of restructures over the years and his body unfortunately broke down during the extension years and he missed multiple games for the team along the way. We now estimate the Saints to be about $39 million over the 2023 salary cap.

Cardinals Restructure JJ Watt’s Contract for 2023 Cap Relief

The Cardinals have done an interesting restructure of J.J. Watt’s contract for 2023 according to ESPN’s Field Yates that I thought was worth a quick discussion.

Watt’s original contract was set to void on the day prior to the start of free agency in 2023. Once the contract voided it was going to leave the Cardinals with $7.2 million in dead money next season. Watt indicated he is retiring after the season and that gives teams more leeway with contracts like this to improve their cap situation.

To make this work what the Cardinals would do is remove the void year and replace it was a dummy salary worth the minimum in 2023 ($1.165 million). That makes Watt’s 2023 salary cap number fall from the $7.2 million had the contract voided to $3.565 million. Even though Watt is retiring, the timing of this restructure would indicate that Watt will be released from his contract and not placed on the retired list by Arizona.

By doing the restructure prior to the end of the regular season the Cardinals now have the ability to designate Watt a post June 1 cut. On June 2, 2023 his cap number will then fall to $2.4 million with $4.8 million deferred to 2024. Had the Cardinals not done this prior to Saturday then Watt would have actually had to remain on the roster until June 1 of 2023 to get the same cap treatment. I would guess that the Cardinals likely would have to guarantee a large amount of future salary in the event they did not release him as promised to get him to sign the contract. That would make certain that Watt has a chance to change his mind about retiring in the future and be free to sign anywhere.

This is a neat little trick with the cap that not enough teams do outside of the Eagles. It’s something I’ve discussed in the past regarding the Saints in particular with Michael Thomas for next season if he wants to continue playing his career elsewhere. They have until Saturday to modify a contract to be able to take advantage dropping a salary to the minimum and using the June 1 designation. If retiring though they can do the deal at anytime.