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.
Cap bookkeeping: the Cardinals have tacked on a year to J.J. Watt's contract, strictly for procedural purposes.— Field Yates (@FieldYates) January 5, 2023
Arizona can now designate Watt as a Post-June 1 move in March, spreading the dead cap hit from his current deal out between 2023-2024 ($2.4M in 2023, $4.8M in 2024).
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.
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.