NFL Contracts: How Does Restructuring a Deal Actually Work?

At first glance, an NFL contract seems pretty straightforward. An athlete receives a specific salary (and usually some bonuses), and they're committed to playing in a particular team for a set number of years. And while that isn't wrong, there's a bit more at play thanks to the salary cap.

That explains why, during the offseason, you'll frequently hear talk about contract restructures. Even to NFL fans, that process can seem a bit mysterious; the two parties sit down, move some numbers around and the club ends up with some extra cap space.

What's the thought process behind those moves? And how does an NFL contract restructuring actually work?

How Does the NFL Salary Cap Work?

Given that pro sports franchises cost a pretty penny, you might think that owners are clear to spend as much money as they please on their respective teams. In the NFL, though, that doesn't fly.

The league, like some of its North American counterparts, has a hard salary cap. That means that teams cannot spend more than a certain amount on their roster. For the 2024 NFL campaign, for example, the ceiling is $255.4 million.

On paper, the idea makes sense. By setting a spending limit, everyone plays on an essentially equal playing field; one owner can't show up and, taking advantage of their wealth, pay the best player at each position an exorbitant fee. Compromises have to be made, and that, in theory, leads to competitive balance around the league.

There's also a cap floor, which mandates that teams have to spend at least a certain amount on salaries.

To be clear, actual take-home cash doesn't have to match the amount a player counts toward the salary cap (their cap hit). That total, instead, combines a variety of factors, including base salary, pro-rated signing bonuses, and other cash flow like roster bonuses.

But even if you believe that the hard cap is a net positive, it can still land teams in sticky situations where it's tough to fit another star player's contract under the limit. That's where the idea of restructuring a contract comes in.

How Does Restructuring an NFL Contract Work?

No NFL team wants to be stuck against the salary cap ceiling, unable to make a move. With that in mind, restructuring a contract is designed to create a bit more breathing room.

When a player receives a signing bonus, that money is paid upfront, but its cap hit is spread across multiple years of the contract. That reality is the key to restructuring a deal.

"A typical contract restructure is when a team converts part of a player's base salary into a signing bonus to create immediate cap relief," an NFL.com write-up explained. "This does, however, increase the player's yearly cap hits thereafter by pushing more dead money into future years."

Think about it this way. That money is already allotted to the player, and that can't change; the team will just spread it out to lessen the immediate burden.

Over the Cap notes that there's another option: the maximum restructure, which is a bit more involved. That "increases the amount of cap space via conversion into prorated signing bonuses by either extending the contract or by adding void years to a contract, years that do not extend the contract but are only used as placeholders for the proration. Maximum restructures are typically considered a renegotiation of the contract that requires the player's consent to execute."

And while the process doesn't get applied to every contract, reworking a deal can be a valuable tool in a team's arsenal. According to Over the Cap's restructure table, the San Francisco 49ers can create a league-leading $96 million in 2024 cap space through simple restructures.

Sometimes, it can seem like salary cap numbers are made up, and teams magically create space whenever they need it. Now, when restructures enter the picture, you'll have a fuller picture of what's actually taking place behind the scenes.