Explaining the salary cap ramifications of a potential Aaron Rodgers trade

Amid all of the drama between the Green Bay Packers and Aaron Rodgers is a simple truth: the team cannot feasibly trade Rodgers before June 1st, even if it wanted to. The bottom line for this comes down to the salary cap and the rules set out in the NFL’s Collective Bargaining Agreement surrounding what money is charged to the cap and when.

The Packers’ contract with Rodgers is structured in such a way that trading him before June 1st actually leaves the team with a larger salary cap charge for Rodgers than the $37 million cap hit he would cost if he played in 2021 with no change to his contract. For a team that is already dangerously and uncomfortably close to the cap and that needs to free up money for the draft class and in-season expenses, that is not a tenable scenario.

However, the June 1st rule would allow the Packers to spread the dead money from Rodgers’ contract over the 2021 and 2022 seasons instead of seeing it all accelerate into 2021 alone. Here’s a look at how that works.

Rodgers’ Contract

Aaron Rodgers signed his most recent contract extension during training camp of the 2018 season, which was also Brian Gutekunst’s first year as the Packers’ general manager. That deal had a $57.5 million signing bonus, which gets divided evenly across the next five years after signing for salary cap purposes.

In other words, Rodgers’ contract includes a salary cap charge of $11.5 million in each year from 2018 through 2022, in addition to the money he would receive each year through base salary, roster bonuses, and workout bonuses.

Then, in 2019, Rodgers restructured some more money from a roster bonus that was to be paid in early 2020 into another signing bonus. That was $14.26 million in total, which was split evenly across five years once again — this time as $2.852 million in each year from 2019 through 2023.

For 2021 and 2022, both of these amortized amounts apply to the salary cap for a total of $14.352 million each year in signing bonus charges, while 2023 has just the $2.852 million from the 2019 restructure.

Finally, the Packers paid Rodgers a $6.8 million roster bonus this March. If the team were to trade or release him, that money must remain on the team’s cap for 2021 no matter what.

The June 1st Deadline

In terms of the NFL’s salary cap calculations, June 1st is an important date, defined in Article 13 of the league’s Collective Bargaining Agreement. It is the reason that many teams release players before the start of free agency with a “post-June 1st” designation, though that is something that does not apply in this particular scenario. Here is the direct language from the CBA:

(1) For any player removed from the Team’s roster, or whose Contract is assigned to another Club via waivers or trade, on or before June 1 in any League Year ... any unamortized signing bonus amounts will be included in Team Salary for such League Year ...

(2) For any player removed from the Team’s roster or whose Contract is assigned via waivers or trade after June 1 ... any unamortized signing bonus amounts for future years will be included fully in Team Salary at the start of the next League Year.

Let’s simplify this a bit, then look at an example. A player traded or released before June 1st (and released without a “post-June 1st” designation) will see all future years’ amortized signing bonus money accelerate, applying to the salary cap in the current year. Here is a sample contract to consider:

2021: $5M base salary (non-guaranteed), $2M signing bonus amortization ($7M total cap number)
2022: $7M base salary (non-guaranteed), $2M signing bonus amortization ($9M total cap number)
2023: $8M base salary (non-guaranteed), $2M signing bonus amortization ($10M total cap number)

In this case, if a team trades or releases this player prior to June 1st 2021, the team must absorb all current and future amortized signing bonus money on the 2021 cap. That means that the $2M for 2021, $2M for 2022, and $2M for 2023 all accelerate and apply in 2021 as a $6 million dead money charge. In this theoretical scenario, the team saves $1 million against the salary cap in 2021 (the difference between the dead money charge and the player’s $7 million scheduled cap number), but they do not have any financial liability in 2022 or beyond.

By contrast, if the cut takes place after June 1st, only the signing bonus money for 2021 (and any other money already paid out in 2021) applies to the 2021 cap; all future signing bonus money then accelerates to the next year’s cap. In this case, that means a $2 million dead money charge in 2021 — a savings of $5 million in cap space — and $4 million dead in 2022 thanks to the acceleration of the 2022 and 2023 bonus amounts into 2022.

Trading Rodgers before June 1st

After an example, let’s look back at the specifics around Rodgers. He has the following amounts of money on the books that would accelerate differently based on when a theoretical trade would happen:

2021: $14.352M signing bonus amortization, $6.8M roster bonus (paid on March 20th); scheduled total cap hit $37.2M
2022: $14.352M signing bonus amortization; cap hit $39.85M
2023: $2.852M signing bonus amortization; cap hit $28.35M

Summing up all of the signing bonus money and the roster bonus already paid this year brings the total amount of dead money to $38.356 million. Compared to Rodgers’ scheduled cap number of $37.202 million, that means that the Packers would actually have to carry a cap number $1.154 million higher by trading him in the month of May than if they simply left him on the roster.

The only benefit to doing this would be that the Packers would be free and clear starting in 2022. However, the team’s untenable salary cap situation at present makes that pathway nearly impossible to take.

Trading Rodgers after June 1st

If the Packers were to trade Rodgers after June 1st, however, the calculation changes drastically. The team would still absorb the same amount of dead money in total, but it would be split up over 2021 and 2022.

2021 would see only $21.152 million in dead money from the roster bonus and the signing bonus money that was due to hit this year. The rest of the signing bonus money — $17.204 million from the 2022 and 2023 years — would hit the books in 2022 instead.

That would free up $22.85 million in salary cap space in 2021 and another $25.5 million for 2022 while clearing the contract off the books entirely for 2023.

All contract details courtesy of Overthecap.com.