Packers restructure Preston Smith’s contract, save $7.25M in cap space for 2021

Rarely can an NFL team and a player who has not lived up to his contract find a compromise. More often than not, players get released for salary cap purposes rather than finding a way to stick around, particularly when a team is dealing with difficult cap-related decisions.

But the Green Bay Packers are no ordinary organization, and Preston Smith seemingly is willing to bet on himself this offseason. The two sides have reportedly agreed on a new contract structure for the veteran edge rusher, keeping Smith in Green Bay and in the team’s pass-rush rotation. For the Packers, the team gets almost as much salary cap relief in 2021 as it would have from releasing Smith outright. For Smith, he has an opportunity to earn more money in 2021 than he would have before, while avoiding a potentially painful roster cut and free agent search during a tough offseason for players.

According to NFL Network’s Ian Rapoport, the contract breaks down as follows:

• $1 million base
• $6.5 million signing bonus (split evenly as a $3.25 million cap hit each in 2021 and 2022)
• $300,000 per-game active roster bonuses
• $200,000 workout bonus
• $4.4 million in not likely to be earned sack incentives (which do not get charged to the 2021 cap)

When factoring in the $4 million in prorated signing bonus money on the cap for 2021 from Smith’s original contract, this deal will give him a $8.75 million cap hit this year, down from the $16 million he would have cost without any restructuring. Furthermore, this is nearly the same amount that the Packers would have carried in dead money if they had released him outright ($8 million).

The sack incentives kick in at 6, 8, 10, 12, and 14 sacks for the 2021 season. Thus, if Smith achieves the 14-sack mark, he would earn the full incentive amount and actually exceed the $12 million in cash he had been scheduled to receive in 2021.

For Smith, who was seemingly staring down the possibility of a pink slip, he gets the security of knowing that he has a job this season and an opportunity to get a little bit of extra money if he has a monstrous year chasing quarterbacks. He also picks up a $6.5 million check today, getting an extra $2.5 million more than his $4 million roster bonus that was due next Friday. The Packers, meanwhile, get to keep Smith in the rotation, making edge rusher less of an urgent need this offseason while getting cap relief that they desperately require before the league year begins next Wednesday.

With this restructure, Green Bay will face a more significant cap hit on Smith if they decide to move on from him after 2021. He will have signing bonus proration of $7.25 million, which would be the dead money on the cap should they decide to part ways this time in 2022. But with the cap expected to rebound next year, the team has kept its edge group intact, giving Smith an opportunity to rebound while offloading some cap money to next season.

It truly is a rare win-win.