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

The two things that popped up in social media as follow up questions to the LA Rams trade that landed Detroit Lions’ quarterback Matthew Stafford conveniently fell into two categories. The first was concern over the LA Rams’ future draft picks. That is answered pretty quickly. The second was about how this all has affected the LA Rams salary cap situation for 2021. And that is where we need to gear down.

This is all dirt road from here on. The LA Rams 2021 NFL salary cap is still hidden in the fog.  Per Over the Cap.com, the estimated 2021 NFL Salary Cap is estimated at $181,674,171.  Per Spotrac.com, their estimated 2021 NFL Salary Cap is estimated at $180,674,141. While both sites have minor differences in the salary cap, they both agree that the LA Rams are currently projected to be over the cap for 2021 by over $30 million.  If the numbers you find after clicking on the links are different, don’t worry. Estimates change almost daily.

If you were hopeful that trading away QB Jared Goff would save the LA Rams some salary cap dollars? Well, you are only partially correct.  What it did was send approximately $29 million of Jared Goff’s 2021 Salary to the Detroit Lions. In return, the Rams must now recognize Stafford’s $20 million of compensation due to him this year. And in the meantime, the Rams must now also recognize $22 million of Goff’s signing bonus in 2021. $29 million outbound. $42 million on the books instead.

Give and take. The NFL salary cap is just one huge game of TIP-IT.  Instead of trying to remove weights from one of three counterweights, the NFL allows NFL teams to move the weight of salaries from today and place them into tomorrow.  But if a player is waived or traded, those dollars must be returned to the ‘now’ stack.

What do the LA Rams wish to do?

So the hope for an instant salary cap fix is not happening. But don’t despair. If you haven’t figured it out by now, there are always ways to ‘fix’ the salary cap. It’s a matter of what do the LA Rams ultimately want to do. If the LA Rams intend on re-signing many of their projected free agents this year, they’ll need a war chest of about $40 million to do so. Factoring in paying for the 2021 NFL Draft selections, and a free agent or two, and the Rams will need approximately $80 million of ‘savings’.

But before we get started, this was exactly where the LA Rams found themselves a year ago. At that time, the presumption was that the Rams would want to re-sign their outbound free agents. They did re-sign some players but focused their efforts upon their offensive linemen and undervalued rotational players.

The belief then was that the Rams had too many salary obligations to cut RB Todd Gurley, to trade any player, or to resign anyone. That wasn’t the case.  In fact, the LA Rams managed to re-sign Jalen Ramsey, Robert Woods, and Cooper Kupp as well.  When the Rams needed to find the money, the money was found.

So the trick is finding the money. That takes four different forms. To change the salary cap impact in a given season, the Rams must do one of four things:
Trade away a player for a less expensive player – transfer costs to a new team.
Waive a player – end relationship. May trigger guarantees.
Restructure a player’s contract – shift money around without changing amount (timing)
Renegotiate (rework) a player’s contract – renegotiating the entire deal. (change terms)

Those are all the tricks that exist. Now the trick is to decide which of these strategies to apply this year. It takes the right combination

Ready … aim…

Of course,  the greatest savings to be found in NFL contracts are those with the highest amounts of compensation. So the first order of business is to focus upon where this team can successfully free up some cold hard currency.  And the biggest savings logically will be found with the biggest payouts.

But before we begin, let’s not fool ourselves. Saving money on any NFL salary cap does not come easy.  In fact, it’s likely to involve some difficult and painful decisions. And to carve over $80 million out of the team’s current estimated 2021 salary cap expense of some $225 million, the cuts will be noticeable.

So where do we start? To base our ‘Five-Step plan’ on meaningful data, we turned to the experts at Over The Cap.com.  For the Matthew Stafford contract details, we relied upon the experts at Spotrac.com. Now, where were we?  Ah yes, where to start. Well, typically you start at the top. In this case, that’s the new guy on the roster, QB Matthew Stafford

Step one – Extend QB Matthew Stafford

The LA Rams have committed to QB Matthew Stafford. After trading QB Jared Goff, two first-round picks, and a third-round pick, nobody is fooling anyone with a position of ‘we want to see how he’ll do here’ on his salary cap impact.  So let’s be realistic here. Stafford is the LA Rams quarterback for the next four years.

So why not modify his contract to reflect that?  His current contract is fairly straight-forward. He is slated to earn $20 million in 2021, plus another $23 million in 2022. That’s actually not bad for a veteran quarterback at the cusp of turning 33-years old. So how can the Rams work this out to make everyone happy?

Well, Stafford is looking for $43 million over the next four years.  The Rams could extend his contract through 2024 and stretch out the number of years Stafford gets paid. That would carry Stafford to age 37, where he would likely have to make a decision to remain in the NFL or retire. But what good will that do the Rams? Well, if the LA Rams go with a four-year deal valued at $90 million, here’s how they save money:

Year          Salary              Signing Bonus         Total Cap hit            Cap Savings
2021        $    500K          $20 million               $ 5.5 million            ($14.5 million) savings
2022        $22 million                                          $22.5 million          ($     500K) savings
2023        $28 million                                          $33 million              $33 million additional cap expense
2024        $19.5 million                                       $24.5 million          $24.5 million additional cap expense.

So the LA Rams place another $500,000 in Stafford’s pocket today, and save $14.5 million in the salary cap for doing so? That’s how the salary cap works We’ll talk more at length about why the NFL accounting rules allow this. For now, suffice it to say that the math is correct and the savings are there.

Aggregate 2021 Salary Cap Savings: ($14.5  million)

Step two – Trade RT Rob Havenstein

Sell high and buy low. While that is a good rule to use when talking about investments and property holdings, it seems a bit calloused when talking about NFL players. Yet here we are, in the midst of another year of ‘where will the LA Rams find the money?’.  One place?  Trading away right tackle Rob Haventstein.

Havenstein is a solid NFL offensive tackle who struggled in 2019 due to injury. But his Pro Football Focus grade of 80.0 for the 2020 season suggests that he is back to his solid form.  So why trade him? Well, there are two very good reasons. First of all, the LA Rams need the money. Secondly, the LA Rams could use draft picks. Is it all about trading away to save money? Well, Havenstein had a good year. 2021 may not be as productive.

The LA Rams proved that they have the wherewithal to replace injured offensive linemen. They managed to slide in a new and improved Joseph Noteboom into the very physically demanding offensive left tackle position. For the right tackle position, the LA Rams drafted offensive tackle Tremayne Anchrum who was very impressive in training camp. And the Rams welcome back offensive tackle Chandler Brewer this year. Brewer has been very impressive in the past.

Havenstein could be dangled in the trade market for day one or day two pick. While Trent Williams commanded only a fifth and a third-round pick, he was far more costly and had just one year on his contract.  Havenstein has two-years remaining on his contract, is in the prime of his career, and would attract significant interest after a successful 2020 NFL season.  Placing him on the trading block would save the team a substantial amount of money, and would give the Rams more draft assets.  In a scenario where the Rams are content to move Hauenstein as a post-June 1 trade, they could save $6.8 million from the 2020 salary cap.

Aggregate 2021 Salary Cap Savings: ($21.3  million)

Step three – Cut Andrew Whitworth

Nothing the LA Rams can do this offseason will hurt as much as what I am about to say that they must do.  The team should cut offensive left tackle, Andrew Whitworth. And despite what anyone says in the comments section, nobody can feel worse about this action than myself. But, it’s time.

Andrew Whitworth is 40 years old, just had one of the most incredible seasons of his NFL career, and pushed himself so hard that he returned from an MCL injury to his knee to return to play in the NFL Playoffs in just eight weeks.  But honestly, his performance in the playoffs was off the charts for a morale boost. It wasn’t his best work of the season by any means.

Whitworth is interested in coming back. His Pro Football Focus grade for 2020 was an outstanding 88.7.  How can he ever hope to top that? The truth to the matter is that neither he nor the LA Rams should expect him to. In fact, it is the perfect way for a distinguished veteran to call it a career. After all, the Rams learned that young Joseph Noteboom was up for the challenge. If the Rams cut Whitworth, they’ll save another $7 million in 2021 salary cap space.

Of course, Whitworth can always sign one with another NFL team. In the process, that team can predefine the role for Whitworth. If that role is as a backup and Whitworth signs on, all the better for both sides.  The Rams need to get younger on the offensive line, build a group now to carry them for the next four years.  I hate to say it, but it’s time to part ways. Whitworth was Jared Goff’s bodyguard.  The LA Rams need the money.

Aggregate 2021 Salary Cap Savings: ($28.3  million)

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)

Step five – Cut Johnny Hekker

The LA Rams need savings in 2021 for their salary cap. And once more, the Rams can do so by pondering the unthinkable moves. In this final stroke to find money, the Rams should cut long time star punter Johnny Hekker. Why? Well, Hekker will cost the Rams nearly $5 million this year, and his production is on the decline.

Per Spotrac.com, Hekker is the 2nd highest paid NFL punter in 2021. That really does not align well with the fact that he was the 17th-ranked punter in 2020 based upon footballdb.com. If the LA Rams are going to hold RB Todd Gurley, WR Branding Cooks, and QB Jared Goff accountable for their production after getting a very lucrative contract, then they need to be just as rigid in addressing this matter.

The fact is that the Rams cannot afford to overpay at any position right now. That means that there may be additional savings to consider with TE Tyler Higbee’s contract or perhaps LB Kenny Young’s contract as well. But when the goal is to save $80 million against the  2021 Salary cap, cutting Hekker makes complete sense.

Cutting Hekker saves the LA Rams approximately $3.8 million. That is just enough to nudge the Rams in saving just over $80 million in their 2021 salary cap.  That would push the Rams into approximately $50 million in salary cap money with which to re-sign veterans, sign new players, and pay for drafted rookies.  Will it be enough? Well, it’s certainly enough to get started. Who knows? With that much cap room, Les Snead may sign a couple of marquees free agents as well?

Aggregate 2021 Salary Cap Savings: ($82.1  million)