By any objective analysis, the Green Bay Packers’ contract with outside linebacker Nick Perry has been a disaster. After a career year in 2016, when Perry totaled 11 sacks and played in 14 games while on a one-year, $5 million deal, the team signed him to a five-year contract worth $60 million.
That has not gone as planned.
In a little less than two seasons since signing that contract, Perry has just 8.5 sacks in 21 games. He has gone on injured reserve, ending his 2018 season after just nine contests and a miserable 1.5 sacks.
Green Bay got away with a cheap cap hit for Perry last season, at just under $6 million, but his number leapt to $10.75 million in 2018. That will only continue to increase next year, forcing the Packers’ hand into a difficult decision about a player who will enter his eighth NFL season at the age of 29.
Barring a contract restructuring, which seems unlikely, the Packers will either need to eat one more year of Perry’s contract or swallow an eight-digit dead money number. However, there are three different options for general manager Brian Gutekunst and cap guru Russ Ball to weigh after this season concludes.
First, note that all three options affect the team salary cap equation in 2019, 2020, and 2021. Here is a look at Perry’s current cap values for those three years, from Overthecap.com:
All three scenarios I lay out below involve cutting Perry no later than the 2020 offseason. Therefore, all three assume that the 2021 year is wiped cleanly off the books, so let’s assume that as a given moving forward.
Cutting Perry outright in the 2019 offseason is one possibility. It would wipe the final three years of his contract off the books, but it would cost the Packers dearly against the salary cap in terms of dead money.
The signing bonus on his five-year contract was $18.5 million, which for cap purposes gets spread out evenly over the five seasons. However, a conventional cut of Perry results in the final three years of signing bonus money — $11.1 million in total — accelerating and hitting the Packers’ salary cap in 2019. Now, Perry’s contract carries a salary cap charge of just over $14.4 million in 2019, so cutting him would save the Packers only about $3.3 million next season against the cap. Is the chance of getting a healthy year of Perry worth $3.3 million? Probably. But as you’ll see shortly, that’s not the only option.
A conventional cut of Perry would absolutely need to take place by March 14th, 2019. This is because of one of the clauses in his contract, which pays him a $4.8 million roster bonus if he is on the roster on the third day of the NFL’s 2019 league year — which is March 15th. If the Packers were to keep him around through that time and would have to pay that out, it would be added to any dead money that would go on the cap, so this decision will absolutely be made before then.
2019: $11.1 million dead cap, $3.3 million cap savings
2020: No dead cap, $14.3 million cap savings
Keep Perry on his current deal, then cut him before 2020
Up until recently, I thought that Perry simply staying in Green Bay for one more year and releasing him during the 2020 offseason was the most likely scenario. This has changed, for reasons that I’ll explain shortly, but let’s look at what the impact would be on the Packers if they were to simply leave Perry on the roster for next season.
As mentioned earlier, the current cap charge for Perry’s deal comes to about $14.4 million. $3.7 million of that value is the amortized signing bonus money for one year. His actual 2019 compensation would then consist of a $5.2 million base salary, the $4.8 million roster bonus, $600,000 in per-game roster bonuses, and a $400,000 workout bonus, coming to a total of $11 million. (Note that the numbers do not quite add up to $14.4 million, because some of the per-game roster bonuses are treated as “not likely to be earned” due to Perry missing several games in 2018.)
My thought was simply to keep Perry on the roster in 2019, then cut him after that season, when the dead money is more palatable for 2020. In that case, the Packers would lose just $7.4 million in dead money that year, which would save them $6.9 million against their 2020 cap. That still leaves Doing this would mean the Packers would still be using about $21.8 million of cap space on Perry over the next two years, however, compared to just $11.1 million if they would release him; that brings the total cost of doing this to roughly $10.7 million.
2019: No change in cap ($14.4 million charge for Perry remains)
2020: $7.4 million dead cap, $6.9 million cap savings
2021: No dead cap
However, there is a different way to structure how that $11.1 million would hit the cap with a release this offseason that makes that idea much more tolerable.
Release Perry as a Post-June 1st cut
The third option is one that had not initially occurred to me, largely because the Ted Thompson-led Packers had never put themselves in a position to need to use it. I need to credit Justis Mosqueda for reminding me that it is an option, and one that applies ideally to Perry’s situation. This is the “Post-June 1st” cut option, which is often used by other teams on players with lengthy contracts remaining and when cap space is at a premium. Teams like New Orleans (Coby Fleener), Dallas (Orlando Scandrick), and Pittsburgh (Lamarr Woodley) have all utilized this option in recent years to spread dead money out over multiple years when in desperate need of cap money.
In a nutshell, the Packers could cut Perry at any time this offseason before March 15th (there’s that roster bonus deadline again) to get some significant cap relief. They would have to keep Perry’s full cap hit for 2019 on the books until June 1st (though the roster bonus may come off earlier since it would not get paid out — we’re still a bit unclear on that), but on June 2nd it would clear and give the Packers relief for 2019. However, the team is projected to have over $40 million in space next year, so even if they were to do this and sign a few free agents this offseason, that shouldn’t be a significant issue.
The upshot of this designation is that only one year’s portion of the signing bonus money — $3.7 million — goes on the 2019 cap. The rest, a $7.4 million charge for the final two seasons, would apply to the 2020 cap instead. Thus, the Packers would get $10.7 million in cap relief this season, while the move would have an identical impact on the 2020 cap as simply cutting Perry next offseason. That would still save another $6.9 million that year; the difference is getting that $10.7 million in cap space back in 2019 (as of June 2nd) in exchange for having Perry off the roster a year earlier.
2019: $3.7 million dead cap, $10.7 million cap savings (as of June 2nd)
2020: $7.4 million dead cap, $6.9 million cap savings
What’s the best move?
When looking at the final two options, the equation basically comes down to this: is it worth $10.7 million in 2019 to have Nick Perry on the roster? If you’re getting 2016 Nick Perry, who played in 14 games and racked up 11 sacks, that answer is plausibly yes. But the Nick Perry who played 12 games last year and went sackless in seven of them or the one who suited up for nine games this year with just two sacks is hardly worthy of that dollar value.
The Packers could even use some of that money on the front end of free agency, signing a veteran pass-rusher and coming up tight against the cap, only to have the $10.7 million charge come off the books in June to give them their usual buffer for the regular season. Could Green Bay, currently projected to have something north or $50 million in cap space even before a potential Perry release, go after a player like Jadeveon Clowney or Dee Ford? What about going after a player who got the franchise tag in 2018, say Ziggy Ansah or DeMarcus Lawrence?
Alternately, Brian Gutekunst could use that $10.7 million to shore up other areas on the team, perhaps finding a solid free-agent guard for the right side of the offensive line or some top-flight help for the secondary. Or perhaps there are some contract extensions coming up next summer that the team could work on with the help of that extra cap space — players like Mike Daniels and Blake Martinez will need new contracts before 2020, while Kenny Clark will likely play that year on a fifth-year option before needing a new deal for 2021.
Ultimately, the Post-June 1st cut appears to be the Packers’ best and most likely option with Perry. It provides the team significant financial flexibility in 2019 while avoiding continuing to pay out money to an often-injured player whose pass rush numbers have dropped precipitously in recent years.