How the Saints cleared $111 million in cap space and what it means for 2022

METAIRIE, La. -- No team was more hamstrung by the NFL’s reduced salary cap than the New Orleans Saints, who began the offseason nearly $100 million over the threshold.

Yes, the Saints put themselves in this position by living dangerously close to the cap for more than a decade. But like every other team in the league, they had been operating with the expectation the cap would keep rising from last year’s high of $198.2 million per team -- maybe by a large margin once new TV deals and the 17-game schedule kicked in. Instead, the cap plummeted to $182.5 million due to lost revenues because of the coronavirus pandemic.

The Saints' approach? Keep their best players and stay committed to trying to win a fifth straight NFC South championship.

“It’s not a rebuild for us,” Saints general manager Mickey Loomis told SiriusXM NFL Radio. “It might be what I would call a retool.”

Maybe that approach seems obvious. But it was a question mark heading into this offseason, considering the Saints’ daunting cap situation and expected loss of quarterback Drew Brees to retirement.

We saw the Saints trade superstars like Jimmy Graham and Brandin Cooks in past years as part of their “retooling” to free up cap space and acquire draft picks. But this year, they stayed committed to expensive players such as receiver Michael Thomas, defensive end Cameron Jordan, left tackle Terron Armstead, running back Alvin Kamara, linebacker Demario Davis and others.

They also placed the franchise tag on free agent safety Marcus Williams, even though it came with a cap charge of $10.5 million. They have made it a priority to work out long-term extensions with right tackle Ryan Ramczyk and cornerback Marshon Lattimore -- even though both could command salaries in the range of $20 million per year.

And they will almost certainly add another free-agent veteran or two in the coming weeks if the value is right. They have reportedly shown interest in starting cornerbacks to replace Janoris Jenkins, for example.

Of course sacrifices had to be made. The Saints released several veterans from the second tier of their roster they might have kept in previous years -- a group that includes Jenkins, receiver Emmanuel Sanders, linebacker Kwon Alexander, punter Thomas Morstead, tight end Josh Hill and guard Nick Easton. They traded defensive tackle Malcom Brown. They also let defensive end Trey Hendrickson get away in free agency, among others.

And the Saints restructured almost every other contract they could, pushing cap costs into the future bringing them right back to this same situation in 2022.

Here is a look at how Loomis and the Saints’ invaluable VP of football administration Khai Harley made the math work to clear $111 million in cap space -- and what next year’s cap situation looks like as a result:

$23.925 million cleared by Brees’ retirement and ‘pay cut’

Brees was scheduled to count $36.15 million against this year’s cap, including a salary of $25 million and $11.15 million in dead money from previous signing bonuses. He then had another $11.5 million in dead money scheduled to hit the books next year after his contract ran out.

The Saints had to get extra creative in perhaps their shrewdest cap move of the offseason.

If Brees retired immediately, his cap charge would be $22.65 million ($0 salary, but all of the remaining dead money accelerated onto this year’s cap). However, if the Saints wait to file Brees’ retirement paperwork until after June 1, they can split the dead money charge over two years ($11.15 million this year and $11.5 million next year). The problem is that if they wait until June 1, they have to count Brees’ salary on their books until then.

So Brees agreed to a “pay cut” to the veteran minimum salary of $1.075 million for this season, lowering his cap charge to $12.225 million until June 1 and $11.15 million after June 1.

$35 million cleared by releasing or trading players

This was the hardest part of the equation, especially when it came to a beloved veteran like Morstead. Most of these were football decisions, though -- meaning the Saints feel like they can either find upgrades or replacements at better values. Especially considering free agents will be discounted throughout the NFL because of the reduced cap.

Alexander, for instance, was an obvious candidate for release since he was due $13.4 million and tore his Achilles in December -- even though the Saints liked him and could pursue a reunion in the future. Jenkins and Sanders were tougher choices since the Saints don’t have any obvious replacements lined up.

The Saints saved all $13.4 million by releasing Alexander, since he had no guarantees or dead money remaining on his contract. They saved $7 million by releasing Jenkins (from a $14.2 million cap charge to a total of $7.2 million in remaining guarantees in dead money). They saved $5.875 million with Easton (from $6.875M to $1M). They saved $4 million with Sanders (from $10M to $6M). They saved $2.605 million with Hill (from $3.355M to $750,000). They saved $2.5 million with Morstead (from $4.5M to $2M).

Trading Brown works the same way as releasing a player for cap purposes, except they get a draft pick in return. They saved $5 million by trading him (from $6.5M to $1.5M).

That marks a total of $40.38 million in cap savings. However, when the NFL calculates a team’s salary-cap charge, it counts the top 51 salaries on the roster. So those seven players have to be replaced by seven new players at the rates of $660,000 to $780,000 per player.

$52 million cleared by restructuring contracts

This has been a common practice for the Saints for years -- and it has become a lot more common around the NFL this year. Teams convert a player’s base salary or roster bonus into a signing bonus so his cap charges can be spread over multiple years.

In its most basic form, let’s say a player is scheduled to have a $10 million salary and a $10 million cap charge this season, and he has three years remaining on his contract. If you change that to a $1 million salary and a $9 million signing bonus, then the bonus can be counted as $3 million over each of the next three years. Suddenly you’re paying the player the same amount of money in 2021, but his cap charge drops from $10 million to $4 million.

The downside, of course, is his cap charges will rise in the next two years. If you do that, you need to hope the cap increases.

The Saints have taken this method a step further by creating fake contract extensions scheduled to automatically void before they become reality. The Saints made waves on Sunday by doing this with quarterback Taysom Hill’s contract -- giving him fake salaries of $35 million per year from 2022 to 2025. Hill will never see that money, but teams sometimes make those salaries exorbitantly high because an NFL rule says players can’t renegotiate a higher salary within 12 months of their most recent renegotiation.

The Saints used these methods with just about every player they could this offseason, pushing the following totals from 2021 into future years:

A source said they will do the same with Armstead, whose deal could save about $7.5 million in cap space depending on the number of void years they add.

What this means for the future

Get ready for some déjà vu. The Saints have about $180 million in scheduled salary-cap costs for 2022, with 27 players on the roster. And that doesn’t include potential new deals for Ramczyk, Lattimore, Armstead, Williams, Hill and quarterback Jameis Winston -- whose price tag could skyrocket if he earns the starting job and thrives.

The NFL’s salary cap might increase next year, especially if fans return to the stands. But it will still take a couple of years to absorb all of last season’s losses. The Saints will probably keep treading water by making similar moves next offseason.

However, the Saints believe it's a good problem to have. Remember, they’re not in this situation simply because of poor cap management. They’re in this situation because they kept drafting and signing elite players who are worth $10 million to $20 million per year.

Keeping that type of talent together long term is the true challenge.