5 steps to free up $80 Million in LA Rams 2021 NFL salary cap

Step four – Restructure contracts

The LA Rams must restructure the contracts of Aaron Donald, Jalen Ramsey, Robert Woods, Cooper Kupp, Michael Brockers, and A’Shawn Robinson. Six players who command over 45 percent of the LA Rams NFL Salary cap.  Six players who can save the team approximately $50 million in salary-cap space.

But before we go any further, let’s clarify what we are talking about here. Restructuring a deal is simply an accounting term where the dollars fall into a different ‘bucket’.  We are not talking about reworking or renegotiating a contract. That is when both sides sit down and toss out part of or the entire previous contract and revise it with new clauses.  For a restructure, the total dollars REMAIN THE SAME.  But the categories of those dollars change, allowing the expense to be amortized, or spread out, over the remaining life of a contract.

Let’s examine the simple case of A’Shawn Robinson. In his reworked contract, he is under contract through 2023, and his 2021 salary cap impact is estimated to be $5,250,000. So how does the restructure work? Well, the LA Rams and Robinson could agree to consider the salary and roster bonus due him as a signing bonus in 2021. That allows the team to spread the $3,500,000 over two years, versus the original terms of the entire amount hitting in 2021.  Spreading the money over two years saves the Rams money this year, but pushes the current savings into a future year. In accounting terms, that is called a ‘deferral’.

The accumulative effect of using that process over the six players mentioned earlier would save the Rams some $50 million in cap space in 2021.  Of course, savings is only temporary, as the impact is merely deferred into future years. Of course, NFL revenues are expected to return to normal, and future NFL salary caps will rise significantly as a result.

Aggregate 2021 Salary Cap Savings: ($78.3  million)