Packers Restructure Chandon Sullivan's Contract

The Packers restructured Chandon Sullivan's contract to gain salary cap space.

The Packers converted the maximum possible amount of Chandon Sullivan's $2.133 million base salary (the low RFA tender) into a signing bonus.  Sullivan's base salary will now be the $920,000 minimum with the remaining $1,213,000 paid as a signing bonus.  The Packers added four void years.  The move generates $970,000 in salary cap space for 2021, and results in a dead money charge for 2022 of the same amount.

The Packers have almost $7.6 million in cap space according to Overthecap.  So why did the Packers scrape the bottom of the barrel to get additional cap relief this year that will have to be accounted for in 2022?  And why now?

My first thought it is that 2021 is a big year for Sullivan.  After a nice year in 2019, he by some accounts regressed in 2020.  It is possible that Sullivan preferred to bet on having a good season as a springboard to a bigger contract in 2022.  Sullivan has earned something in the area of $5 million in his NFL career to date.  The Packers also might have preferred to wait.  I note that the Packers converted as much as possible of Tonyan's RFA tender into a signing bonus while adding void years rather than reaching a long-term extension.  The reasons are probably much the same in both situations.

My next thought is that converting base salary to a signing bonus does not qualify as a renegotiation under the CBA.  Contracts can only be renegotiated once every 12 months under the rules.  That allows the Packers some flexibility later if Sullivan remains in the team's plans after this year.

My last thought is that the Packers want to be able to add a player after week one when a veteran's contract is no longer guaranteed for the rest of the season.  If the Packers had added a veteran prior to today's game and that veteran was on the roster for the Saints game, his salary would be guaranteed.  Also, restructuring Sullivan's deal before game one means the maximum can be converted.  If they waited, the team would issue game checks to Sullivan for each game played, reducing the total that could be converted.

Although the Packers have roughly $7.6 million in cap space, that figure always diminishes over the course of a season due to injuries.  The cost of elevating 2 players from the practice squad to the active roster each week would exceed $900,000 (not that I expect the Packers to always elevate two players).  The Packers also have to concern themselves with incentives that may have to be paid and additional injuries.  Last year, the Packers' cap space decreased by some $5 million from game one to the end of the league year.

 

 

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Comments (12)

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Thegreatreynoldo's picture

September 12, 2021 at 06:04 am

If anyone has any other possible reasons for the team's decision to restructure Sullivan, please write them in the comments below.

TJ Watt got a 4 year extension for $112M, or $28M AAV. The cash flow is very strong. $80M is fully guaranteed by way of a $35M signing bonus plus guaranteeing his base salary for 2021, 2022, and 2023. Pittsburgh previously was like the Packers: all guaranteed money had been in the form of the signing bonus. The Steelers paid $20M guaranteed more than 3 tags would have cost to buy that fourth and fifth year (only four new years).

Use the link below to see what a $28M AAV contract very close to the Packers usual structure might look like. Then remember that the Packers would need to keep Davante Adams' cap hits for 2021 and 2022 roughly neutral. That is, in an extension signed today they probably would reduce his cap hit by $8M or so and then have his cap number for 2022 be roughly $8M. That would make 2023 through 2026 look ugly with cap numbers in the mid-thirty million area.

https://overthecap.com/player/t-j-watt/5614/

I see no chance of GB franchise tagging Adams.

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jurp's picture

September 12, 2021 at 07:43 am

Maybe it's a good thing we DIDN'T draft Watt; we would've lost him due to cap hits.

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PewAuKeeFan's picture

September 12, 2021 at 08:50 am

Or, maybe Watt would have been enough to nudge Packers over the hump and get that Lombardi trophy in 2019 and 2020.

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Duneslick's picture

September 12, 2021 at 02:07 pm

Does anyone think Rodgers will be in GB next year. 44 million over the cap. So players have to bet cut to get under the cap and then more cut to sign Adams Lazard MVS and Tonyan as they are not part of next years cap and are free agents. Dont forget Jaire will be getting 15 million next year too The team will be losing many top players from the current team no matter how you look at it and Rodgers will not want to play on the team that is left. BTW if he stays more players will have to be cut to provide for paying his contract. Thays why Rodgers and Adams call it the last dance. They are not watching the decline of the team with rose colored glasses

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CoachDino's picture

September 12, 2021 at 06:24 am

good point on the after week 1 change that may be driving this. while thepackers seldom use the ftag i hope its on the table to help da move from his imo over reaching contract stance

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Thegreatreynoldo's picture

September 12, 2021 at 06:53 am

I think the Bosa ($27M/yr) and Watt ($28M/yr) deals show that the players can read the headlines about the TV deals. Certainly their agents are salivating.

I just read that Amazon is expected to pay $2.5 Billion per year for the right to telecast out of market Sunday Night Games. The old (well current) deal is with Direct TV and is believed to be worth $1.5B per year. That's a 67% increase.

I think the chance of using the tag on anyone in 2022 is zero. Normally i would use a phrase like while there might be a non-zero percent chance, in this case I think it is 0.00000000000000% chance.

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CoachDino's picture

September 12, 2021 at 07:31 am

lol...more good points. question, why do u think no one will use? due too the cap surge in 2023 and teams ability to sign and push out? the surge in salaries in 2023 making todays prices more friendly to fo considering deals....

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Thegreatreynoldo's picture

September 12, 2021 at 08:48 pm

I think teams will pay good and elite players a lot of money if they can structure the contract to meet the team's needs. You can't structure a franchise tag. For a WR, it will be $19M in Cash next year and thus a $19M cap hit. The tag has to be issued in Feb. and early March. GB is already $50M over the cap. No way GB can issue a tag to Adams since that would push it to $70M plus.

I don't think the Packers can extend while adding void years to enough players to meet the salary cap limit on march 16th next year. I think it would require cutting every player on a 2nd or 3rd contract.

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stockholder's picture

September 12, 2021 at 07:49 am

The hole in the defense. Expect Savage to be out of position when he covers his butt.

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jurp's picture

September 12, 2021 at 08:06 am

Yes, because King rules all in your world.

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Spock's picture

September 12, 2021 at 10:13 am

Thanks, TGR. I always learn something (although, sadly, I seem to forget it immediately :)! ) from your salary cap information. In this case I think the most likely case for Sullivan's restructure is your final possibility, "My last thought is that the Packers want to be able to add a player after week one when a veteran's contract is no longer guaranteed for the rest of the season. If the Packers had added a veteran prior to today's game and that veteran was on the roster for the Saints game, his salary would be guaranteed. Also, restructuring Sullivan's deal before game one means the maximum can be converted. If they waited, the team would issue game checks to Sullivan for each game played, reducing the total that could be converted." THAT seems to me to be the most logical (Hey, my moniker is Spock, lol) explanation of "Why now?". We shall see when/if the Packers add a veteran after week one.

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flackcatcher's picture

September 12, 2021 at 12:46 pm

If Redman had not gone down for this season, Sullivan may have gotten cut for salary cap alone. Packers are barely above water Cap wise for this season. So that Gute had to resort to this kind of Cap maneuver before the season even started is telling. Sullivan may be the early sign of deeper trouble ahead for this team for this year. Hope for a healthy team. On the big picture, 2022 and 2023 could be a bloodbath for the player's contract. The debt that teams are carrying could restrict them from signing their high performance veterans. It's ironic, as Packers player rep, Rodgers warned the younger players about this sort of situation. Of course Agents want to get paid and pushed for the league agreement. And here we are. The NFL is a young players league, and next year it could a lot younger.

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