Barnwell on Steelers Cap Fixes

[bradshaw2ben]

I thought this pretty spot on for the priority moves and how it makes the actual cap situation not quite as bad as it seems:

Pittsburgh Steelers
Projected cap space: Minus-$7 million

Key free agents: WR JuJu Smith-Schuster, OT Alejandro Villanueva, RB James Conner, LB Bud Dupree, CB Mike Hilton, DL Tyson Alualu, CB Cameron Sutton, OT Matt Feiler

1. Restructure QB Ben Roethlisberger's deal. The Steelers and Roethlisberger both want to run things back one more time in 2021, but there's a problem, at least on paper. Roethlisberger has a $41.3 million cap hit due, the largest of any player in football. Here's how that works:

Roethlisberger's deal has four components. He has a $4 million base salary and a $15 million roster bonus, both of which are set to be paid into his bank account this season. Of that $19 million total, $14 million is already guaranteed for injury, so as long as he can pass a physical, the Steelers would not owe him those figures if they cut him.

He also has two cap charges on paper that need to be accounted for on Pittsburgh's cap. The signal-caller was given a $37.5 million signing bonus when he inked his three-year extension in 2019. While he gets paid all of that in one fell swoop when he signs his deal, Pittsburgh is allowed to spread the cap hits for that bonus across the length of the deal, so on the cap, the team has accounted for $12.5 million in 2019, 2020 and 2021.

The Steelers also restructured Roethlisberger's deal before the 2020 season, turning $19.5 million of salaries and roster bonuses into a signing bonus. In doing so, while they paid him that money upfront, Pittsburgh was allowed to spread the cap hit for that new signing bonus over the two remaining years of the deal, with $9.75 million coming due on the cap in 2020 and $9.75 million more in 2021.

The $12.5 million for Roethlisberger's first signing bonus and the $9.75 million more for his second signing bonus (the restructure) add up to $22.25 million in cap charges. The Steelers are on the hook for those charges regardless of whether he plays for the team or not. If he gets cut or retires, the Steelers would be paying $22.25 million for a player who isn't on the roster, which is what is commonly referred to as "dead money." Add up the $22.3 million in unaccounted bonuses, the $4 million base salary and the $15 million roster bonus and you get $41.3 million -- Roethlisberger's 2021 cap hit.

It's not hard for the Steelers to get out of this conundrum, although they'll feel some pain in 2022 for doing so. The easiest way to do this is for them to announce a four-year, $120 million extension for Roethlisberger. While that might seem outlandish for a player who might have one year left as a viable quarterback, the money means nothing and the years are only there to create as much cap space as possible.

In reality, Roethlisberger's deal would have only $19 million guaranteed. As you might remember, the Steelers owe him $19 million in unpaid cash for 2021; this deal converts the $15 million roster bonus and $3 million of his $4 million base salary into a new $18 million signing bonus. With four years of new runway, the team can spread that $18 million signing bonus across five years for cap purposes, meaning it is only on the hook for $3.6 million of that bonus in 2021.

What does all of that mean? In 2021, Roethlisberger's cap hit would drop from $41.3 million to $26.9 million, freeing up $14.4 million in cap space. The Steelers would owe the $22.3 million in unaccounted charges from Roethlisberger's last deal, a $1 million base salary and $3.6 million of the prorated signing bonus on his new extension. This restructure would get them more than $8 million under the projected cap for 2021.

If Roethlisberger retires after the 2021 season, the Steelers wouldn't owe any of the $120 million listed on his extension, since none of it was guaranteed. Since they've paid Roethlisberger an $18 million signing bonus and accounted for only $3.6 million of it on their cap, though, the unaccounted-for portion of the bonus accelerates onto their 2022 cap; they would owe $14.4 million in dead money in 2022. Given that the cap is expected to rise back north of $200 million next year, though, that's a trade the Steelers will happily make for one more year with their future Hall of Famer under center.

2. Extend CB Joe Haden or CB Steven Nelson. Restructuring Roethlisberger's deal gets the Steelers cap compliant, but to bring back some of their free agents, they'll need to keep going. Haden and Nelson are both in the final year of their respective deals and have cap charges of $15.6 million and $14.4 million, respectively. Cutting Haden would save $7 million, while moving on from Nelson would create $8.3 million in room. Those savings could help the Steelers bring back Sutton or Hilton from their free-agent pool.

As was the case with Roethlisberger, though, extending one of those corners can create cap space and keep the player around. Let's say the Steelers give Nelson a four-year, $40 million extension. They could guarantee Nelson a $1 million base salary for 2021 and pay him an $18 million signing bonus. With five years of runway, they would be responsible for only $3.6 million of that bonus in 2021, meaning they could keep Nelson around and actually save $3.7 million on their cap. That alone won't be enough to bring back Hilton, but it'll help create space without sacrificing a starter. Extending Nelson and cutting Haden could get the job done.

3. Extend OLB T.J. Watt and/or S Minkah Fitzpatrick. The Steelers are blessed to have two young stars on defense, but they're due for raises. Watt is entering the fifth-year option of his deal, meaning his cap hit spikes to $10.1 million. Fitzpatrick, who is only in his fourth year, is still a huge bargain at $2.7 million. Let's focus on Watt as a way to both give a player a big raise and still keep things cap compliant.

He only has that $10.1 million left on the final year of his deal, so the Steelers don't have much flexibility there. He's due for a massive extension, likely topping the five-year, $135 million deal Joey Bosa inked with the Chargers last July. Let's say Watt's five-year extension hits $140 million. Here's how Pittsburgh can make that work without creating more cap problems:

YEAR BASE SALARY SIGNING BONUS ROSTER BONUS CAP HIT
2021 $1,089,000 $9,000,000 $0 $10,089,000
2022 $10,000,000 $9,000,000 $7,000,000 $26,000,000
2023 $16,000,000 $9,000,000 $0 $25,000,000
2024 $21,000,000 $9,000,000 $0 $30,000,000
2025 $23,000,000 $9,000,000 $0 $32,000,000
2026 $27,000,000 $0 $0 $27,000,000
Totals $98,089,000 $45,000,000 $7,000,000 $150,089,000

The team could give Watt a massive raise without raising his 2021 cap number by a single penny. Watt gets just over $46 million guaranteed at signing, with a $45 million signing bonus and his $1.1 million base salary for 2021. The Steelers famously don't give non-quarterbacks multiple guaranteed years, which came up in the Antonio Brown fiasco, but Watt's huge signing bonus makes it impossible to cut or trade him before 2024.

He'll make just over $79 million over the first three years of the deal, and while that $26 million figure in 2022 seems difficult to manage, they will restructure his base salary and roster bonus into a second signing bonus to reduce his cap hit. This is on the low end for a Watt deal, so the Steelers might be forced to push his cap hit slightly higher in 2021, but the idea will remain the same. This would be much tougher to do with Fitzpatrick given his $2.7 million cap hit, which is why the star safety might have to wait for 2022 to get an extension.

[Mick]

For Ben, that’s what the Steelers would like, but i doubt Ben’s agent agrees to a deal that doesn’t add new guaranteed money above and beyond what he’s already due for showing up in 2021 on his existing contract.

Beyond that...I love TJ Watt. He’s one of the best defenders in the league. Is he worth $35M in cap space per year after his rookie contract? I understand that that’s the market rate. Question is whether paying him that much helps us win a championship.

[bradshaw2ben]

For Ben, that’s what the Steelers would like, but i doubt Ben’s agent agrees to a deal that doesn’t add new guaranteed money above and beyond what he’s already due for showing up in 2021 on his existing contract.

Beyond that...I love TJ Watt. He’s one of the best defenders in the league. Is he worth $35M in cap space per year after his rookie contract? I understand that that’s the market rate. Question is whether paying him that much helps us win a championship.

I think Ben will do almost exactly what Barmwell is suggesting. Both sides know he's either done after this year and gets the same amount of money he was promised OR he plays really well and they renegotiate next year when the team has some space and the cap is bigger.

[tbsteel]

Good read from Barnwell, which is nice to see as he has always struck me as being anti-Ben/Steelers.

I still can't envision this offseason being a net positive for this team. Just thinking out loud, but this is a pretty realistic outcome for what we might see:

Big Ben extended
Haden and/or DeCastro extended
Zach Banner signed to play LT
Mason Rudolph extended as an overpaid backup
Bring back Jesse James just cuz

Lose Bud Dupree, Juju, Hilton, Sutton, Villaneuva, Feiler, and Conner to FA.

Would that not be the worst offseason since the motorcycle crash? Definitely up there.