Deshaun Watson contract restructure: Implications for the Browns

Deshaun Watsoncontract with Cleveland Browns Very straightforward but also unique. Signed in the spring of 2022 The trade that sent Watson from Houston to ClevelandUnder the deal, Watson will get $230 million over five years — exactly $46 million each year, fully guaranteed. No fancy roster bonuses or option bonuses. He got a $44.965 million signing bonus and a $1.035 million salary in 2022, and he was set to receive a $46 million salary in each of the 2023, 2024, 2025 and 2026 seasons.

As far as NFL contract structure goes, this is about as basic as they come. So it’s fair to explain why a team would change it — as the Browns did on Thursday. Reorganization for the second year for the third consecutive time and next year’s cap number was increased to $72.935 million.

Last year, the Browns Watson’s contract was restructured For salary cap relief, converting all but $1.08 million to a signing bonus and adding a void year in 2027. Teams always do this because signing bonuses, even if paid fully upfront, can be spread out over five years for salary cap accounting purposes. So of the $44.92 million in 2023 salary that the Browns converted to a signing bonus, they would only have to count one-fifth ($8.984 million) against their cap each year. This made Watson’s cap number $19.057 million in 2023 and his 2024, 2025 and 2026 numbers all $63,774,678 (and added that “void year” where the cap number is the remaining $8.984 million; otherwise they would have had to count one-quarter of the new signing bonus instead of one-fifth each year).

That $63,774,678 would have been the highest cap number in the league this season, so on some level, it wasn’t a huge surprise to learn Thursday morning that the Browns had restructured Watson’s deal againConverting $44.79 million of Watson’s salary into a signing bonus, adding another void year in 2028 and reducing his 2024 cap number to $18,984,678.

Of course, just like last year, this has the effect of increasing his future cap numbers. So far, Watson’s 2025 and 2026 cap number will be $72.935 million. And that’s for a team that’s already projected to be nearly $44 million over the cap in 2025!

So why do the Browns keep doing this? And won’t they have to pay a heavy price for it in the future? Let’s explain this in a little more detail and see what it means for the team and Watson in the future.

The answer to this The “why?” There’s short-term salary cap relief. Thursday’s restructure means the Browns now have more than $62 million in 2024 cap space, more than any other team in the NFL. (They had more than $25 million in space before the move, too.)

The natural reaction to this is, “So what? Free agency happened months ago. Why would a team need all that cap space?” Well, it’s important to remember that cap space can be carried over from year to year, so even if the team doesn’t use any of the $62 million this year, Cleveland can roll it over to next year, when, as mentioned above, it’s going to need it.

The reason for doing this now is that no team knows when it might need cap space. With over $62 million in cap space, the Browns can do whatever they want in terms of player acquisitions this year. Any player that becomes available in a trade, no matter how expensive, the Browns now have the ability to acquire him.

This is a pretty extreme example, but let’s say a Bengals receiver Tee HigginsSteelers Edge Rusher TJ Watt and 49ers offensive tackle trent williams All became available in trades. If you wanted to trade for those three, you would need about $62 million in cap space to absorb those salaries, and the Browns have exactly that! No matter how unpredictable the situation is, they would at least be able to explore that possibility. That’s maximum short-term flexibility for a team with Super Bowl aspirations.

But what will happen? The future? Aren’t the Browns just pushing a potential problem and making it worse? Watson hasn’t played well for the Browns, starting 12 games in two seasons, completing less than 60% of his passes and throwing 14 touchdowns and nine interceptions. And if he plays poorly this season and Cleveland decides to waive him after 2024, the Browns will not only have to pay him $92 million in guaranteed cash but also an incomprehensible dead-money cap charge of $172.77 million.

To put it in perspective, that’s more than the per-team NFL salary cap was as recently as 2017. Even if the Browns designated him for cut after June 1 and split the hit over two seasons, he would take a dead-money hit of $86.385 million in each. That’s the most dead money any team has ever taken on by cutting a player. $85 million in cap space It cost the Broncos to release it Russell Wilson Last off-season.

So sure, when you put it that way, it sounds ridiculous.

But the Browns don’t see it that way. First, they expect and believe Watson will play better. They brought him in as their long-term franchise quarterback, he’s two weeks away from his 29th birthday, and assuming he stays healthy, they believe his best is yet to come. In their ideal world, they’re looking at extending his contract after the 2024 or 2025 season, and if they do, they can fold all those future cap hits into the new deal with fun tools like extra void years and such.

Second, the Browns and many other teams expect the NFL salary cap to keep rising. Just maybe not as much every year as it did last year. An increase of $30.6 million this yearBut even if it increases by half each year, the cap will be $300 million by 2027 and close to $350 million by 2030. The amount of dead money that teams deem acceptable is going to increase right along with it. A few years ago, an $85 million dead-money hit seemed impossible — a number big enough to fold a franchise. But until Bo Nix can play, the Broncos will move past this in a year or two and be just fine.

So yes, the worst-case scenario is that the Browns will have to part ways with Watson at the end of the contract or even sooner. If that happens, they’ll have bigger problems than just dead money. At that point, there will probably be different people deciding who to pay and how much to spend. And to that end, the worst-case scenario isn’t something the current front office spends a lot of time thinking about.

Let us be clear. It’s unlikely we’ll look back on the price the Browns paid to acquire Watson (in terms of trade assets and contract) as a good move, even if you ignore the off-field behavior that led to the move. Suspended for the first 11 games of his debut season In Cleveland — he was accused by more than two dozen women of sexual misconduct during massage sessions — giving a veteran quarterback a five-year fully guaranteed contract in a market where all your competitors refuse to do so is an excessive payout. This is not a defense of that decision.

But there is some logic behind the math of this restructure. The conclusion is that if Watson plays well, the Browns will be fine because they can keep him moving. And if he doesn’t play, they’ll be in a reset anyway, the way the Broncos are right now … but in a universe where the salary cap is much higher. Teams go through all sorts of financial and accounting hurdles these days to pay quarterbacks as much as their current cost. The Browns’ hurdles aren’t impossible to overcome. They’re just a little different than the rest.