Calculating the Packers’ salary cap impacts and deadlines in Aaron Rodgers’ contract

The clock is officially ticking on Aaron Rodgers’ time with the Green Bay Packers. That began two weeks ago, when the franchise made Jordan Love its first-round pick in the 2020 NFL Draft.

However, the remaining length of Rodgers’ tenure will be determined as much by dollar signs as any other factor. With a massive contract signed prior to the 2018 season, moving on from Rodgers any time soon will come with a heavy cost. But just when could it make financial sense to make the switch to Love and let Rodgers go?

Even through a financial lens, the Packers’ decision will be dictated in large part by how Rodgers plays. The Packers’ current situation seems to have more parallels to that of Tom Brady, Jimmy Garoppolo, and the New England Patriots in 2014 than it does to the Rodgers/Favre saga 15 years ago. And in those circumstances, Brady elevated his game, playing better from 2014 through 2017 than he did the few years before a challenger appeared.

If Rodgers does the same, the Packers could end up looking to trade Love down the road. But that will require QB12 to live up to his high price tags, something that is hardly a guarantee, since Brady is the exception rather than the rule. With that in mind, it’s worth examining the options that the Packers have with Rodgers over the next few years to understand the salary cap ramifications that would take place if the team moves on from him, either via release or trade, before the end of his current contract.

Rodgers’ deal carries the following salary cap values over the next four years:

2020: $21,642,000
2021: $36,352,000
2022: $39,852,000
2023: $28,352,000

It surprised this writer to find some financial benefits to moving on from Rodgers as early as 2021, particularly in the form of a post-June 1 release. But still, making a move in 2022 makes the most sense from a financial and accounting perspective, should Rodgers be trending in decline. Here, APC will break down the various options that the Packers have for moving on from Rodgers and the different deadlines that could spur action.

Remember that in general, June 1 is a critical deadline for salary cap calculations. Transactions made before this date — whether coming in the form of a trade or an outright release — result in all current and future dead money being accrued onto the upcoming year’s salary cap. Thus, any money already paid for the current year, the amount of signing bonus money applied to the current year’s cap, and the signing bonus money applied to future years’ caps all accelerate onto the current year. If the transaction is made after June 1, however, only money already paid for the current year and the current year’s signing bonus amortization are applied to the current year’s cap, while all future signing bonus money goes onto the next year’s cap.

One other minor factor that is in play but that will not be heavily considered here is the concept of workout bonuses. Rodgers has $500,000 in workout bonuses each year of his deal. For the purposes of this analysis, APC will consider the bonuses unpaid by the Packers if they time the transaction properly. However, moving Rodgers after the bonus is paid — which could only really apply to post-June transactions — would simply add a half-million to the dead money in the current year, thus reducing the amount of cap space freed up in those calculations by the same amount.

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2020

Move Rodgers before June 1

It’s obvious that the Packers cannot move Rodgers now. The financials completely prevent this from happening, as moving Rodgers now would cost the Packers $51.15 million in dead money. That’s almost $30 million more than his 2020 cap charge, so the team would need to free up that amount of cap space to do this. That’s simply not realistic.

Dead cap 2020: $51,148,000
Scheduled 2020 cap charge: $21,642,000
2020 cap increase: $29,506,000

Move Rodgers after June 1

This would be silly, as the Packers would still end up with over $51 million in dead money on the books, but it would at least be spread out over the 2020 and 2021 seasons, and with a slight cap savings in each year. If you want to get really technical, this is the first pathway where the Packers would not be truly devastated by the financial impact of moving on from Rodgers.

Dead cap 2020: $19,592,000
Scheduled 2020 cap charge: $21,642,000
2020 cap savings: $2,050,000

Dead cap 2021: $31,556,000
Scheduled 2021 cap charge: $36,352,000
2021 cap savings: $4,796,000

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2021

Move Rodgers before day 3 of 2021 league year (approx. March 18th)

2021 becomes a weird year here, because there are two separate deadlines to consider, but four ways to make this work. The first is early in the year, prior to the Packers’ payout of Rodgers’ roster bonus. That is a $6.8 million check scheduled to be paid out on the third day of the league year. The Packers can indeed gain some cap space by releasing Rodgers prior to paying out this bonus, though the amount they would gain is small — a little less than $5 million. Still, this is technically an option that would avoid costing the Packers extra cap space, though it would still leave them with $31.5 million in cap money for a quarterback that is playing elsewhere.

Dead cap 2021: $31,556,000
Scheduled 2021 cap charge: $36,352,000
2021 cap savings: $4,796,000

Move Rodgers after day 3 of league year but before June 1

This should be a complete non-starter. Because of Rodgers’ $6.8 million roster bonus due on the third day of the league year, the Packers would end up eating a bigger dead money hit on the 2021 salary cap by releasing or trading Rodgers in this window than his contract is worth. Fundamentally, if the team pays the roster bonus, they would have to wait until after June 1st if they changed their mind on keeping him.

Dead cap 2021: $38,356,000
Scheduled 2021 cap charge: $36,352,000
2021 cap increase: $2,004,000

Move Rodgers after June 1, 2021

Here is where you start to see some actual, tangible financial positives for the Packers for moving on from Rodgers. In this scenario, the Packers end up with eight-digit cap savings in both 2021 and 2022 before clearing the books entirely for 2023. That’s something that could actually work, though at this point another season of Rodgers is probably worth paying $15 million for.

Dead cap 2021: $21,500,000
Scheduled 2021 cap charge: $36,352,000
2021 cap savings: $14,852,000

Dead cap 2022: $17,204,000
Scheduled 2022 cap charge: $39,852,000
2022 cap savings: $22,648,000

Release Rodgers as a post-June 1 cut before the third day of the 2021 league year

This is the other option involving moving Rodgers before day three of the league year, but it requires releasing him outright and designating the move as a post-June 1st release — a trade is not an option here. In doing so, the Packers avoid paying Rodgers’ 2021 roster bonus of $6.8 million, but they would keep a little less than $30 million in a cap charge on the books through the offseason. That amount would then adjust on June 1, however, opening up $22 million in cap space on that date and having the same impact in 2022 as above. All told, this move leaves open about $22 million in each of those two seasons.

As you’ll see moving into 2022, this effectively makes the first few days of 2021 an inflection point. The Packers will have a decision to make about whether each year of Rodgers is worth an incremental cost of $22 million compared to letting him go. It’s actually a weird situation, though: If the team wants to just release Rodgers outright in 2021, doing it at the start of the league year as a post-June 1 cut offers the team the most flexibility, even if they cannot take advantage of it for a few months. But if they would rather trade him, they probably should wait until after June 1st.

Dead cap 2021: $14,352,000
Scheduled 2021 cap charge: $36,352,000
2021 cap savings: $22,000,000

Dead cap 2022: $17,204,000
Scheduled 2022 cap charge: $39,852,000
2022 cap savings: $22,648,000

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2022

Move Rodgers before June 1

The 2022 offseason is the first time that it makes good financial sense to consider trading Rodgers during the early part of the offseason, and it works out from a release standpoint as well. But comparing this to the post-June 1 release in 2021, one can see that choice in the 2021 offseason effectively makes the contract a $22 million per year option on Rodgers in each of 2021 and 2022.

Dead cap 2022: $17,204,000
Scheduled 2022 cap charge: $39,852,000
2022 cap savings: $22,648,000

Move Rodgers after June 1

This doesn’t do much good, as it would probably benefit the Packers more to get $22.6 million in cap space in March rather than waiting until June to open up $25.5M in space. But it’s still theoretically an option.

Dead cap 2022: $14,352,000
Scheduled 2022 cap charge: $39,852,000
2022 cap savings: $25,500,000

Dead cap 2023: $2,852,000
Scheduled 2023 cap charge: $28,352,000
2023 cap savings: $25,500,000

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2023

Move on from Rodgers any time before the season

Finally, Rodgers, contract is up after 2023, and most of his spread-out signing bonus cap hit is gone, leaving only a bit left over from his 2019 conversion of a roster bonus to a signing bonus to account for. In this case, with Love still under team control for two more years, it’s highly unlikely that the team would stick with Rodgers unless a new extension were in place. But cutting or trading him after three more seasons would leave the team with just a scant $2.85 million dead money bill to deal with. This becomes basically a $25.5 million option year for the team.

Dead cap 2023: $2,852,000
Scheduled 2023 cap charge: $28,352,000
2023 cap savings: $25,500,000

Note: all contract details courtesy of Overthecap.com