Now that the offseason is here, many Titans fans are going to websites like Over The Cap, clicking on “cap space”, scrolling to “Titans”, and beginning to freak out when they see the number $6,486,442 next to their team’s name. That’s not enough to re-sign key contributors like Corey Davis or Jonnu Smith and it’s certainly not enough to go get the high-end pass rusher that this team desperately needs.
However, a deeper dive into their financial situation paints a much rosier picture. Over The Cap — a great resource whose numbers we will use for this exercise — did a study of the “cap health” of all 32 NFL teams last offseason and Tennessee checked in as the 9th most healthy cap situation in the league (and that was after the Ryan Tannehill and Derrick Henry extensions).
What factors go into cap health? Cap space is one element, obviously, but the percentage of guaranteed money remaining on contracts and the ratio of bonus money to salary is another. Those factors point to cap flexibility and the Titans are among the best in the NFL in those metrics.
That flexibility is going to be critical this offseason with a salary cap that is expected to drop for the first time since 2011. The revenue shortfalls caused by COVID-19 epidemic are driving this dip and the NFL and NFLPA agreed on a $175 million floor — which would represent a big drop from the $198.2 million current cap — for the 2021 salary cap prior to the season.
However, the decision by the league to go ahead and move to 17 regular season games in 2021 has generated optimism that the cap will actually come in above the $175 million floor. Numbers in the $195 million range have even been floated.
A higher cap would obviously give the Titans more flexibility, but that’s not their only path to creating the space they need to make sure that the 2021 roster is ready for another run at the playoffs.
Most people will instantly gravitate towards cuts as the way to create cap space, but the biggest chunk available to the Titans comes through the magical world of restructuring. This is the wizardry that teams like the Saints and Eagles have used for years to sign veteran players when it seemed like they were capped out heading into the offseason.
The Titans have massive flexibility with the deals they have on the books thanks to the way they structure contracts and years of responsible cap management. They have missed on some players during the Jon Robinson era, but they haven’t missed on many long term deals that left behind substantial amounts of dead cap space. Guys like Dion Lewis, Sylvester Williams, and Josh Kline were all released with minimal guaranteed money left on their deals.
So how do restructures work?
Restructures are a little bit like buying furniture on an interest-free credit card. You’re still going to pay the same amount, but you’re using the NFL’s salary cap rules to spread the cap charges out over multiple years.
Let’s take Derrick Henry as an example contract to show how this can work. The Titans signed Henry to a four-year, $50 million contract last offseason with a signing bonus of $12 million and $25.5 million fully guaranteed.