Saints cap space: How did New Orleans sign Derek Carr if they're so far over the salary cap?

The New Orleans Saints are signing quarterback Derek Carr to a four-year contract worth up to $150 million, per NFL Network. Ian Rapoport and Mike Garafolo are reporting the deal includes $100 million in total guarantees with $60 million guaranteed at signing. The move gives them a decent quarterback option that makes them competitive in the NFC South.

The bigger question on many people's minds is how the Saints are able to sign him in spite of being in a bad position against the salary cap. Prior to the signing, Over The Cap had the Saints at a projected $18,174,318 over the 2023 salary cap.

The team has to be under the cap when the new league year starts on March 15. They'll likely release some players and restructure contracts for other players to make up the space. We don't have a full breakdown of Carr's contract, and how much is bonus money vs. how much is base salary will impact cap space. Rapoport and Garafolo did note that, “Carr structure[d] his deal to accommodate Saints' cap issues.”

They'll still need to clear some money to get under the 2023 salary cap. They have until the 15th to get under the cap, so they've got another week to sort this out. The easiest way to do that is restructuring existing contracts. That involves reducing a 2023 base salary and turning the difference into a signing bonus.

For example, cornerback Marshon Lattimore is due $14.5 million in base salary this year and has a salary cap figure of $22,464,317. They could reduce his salary to the veteran minimum of $1,080,000 and turn the remaining $13,420,000 into a signing bonus over the rest of the deal. He's signed through 2026, so if they spread out that money over the four remaining years, that becomes an annual $3,355,000 cap hit added on. That reduces his 2023 cap number from $22,464,317 to approximately $10,124,317, clearing over $12 million in cap space.

Doing so puts them up against the wall in future years, but it buys them time this year. The Saints have become regulars when it comes to restructuring deals. Often it involves adding dummy years at the end of a contract that automatically void. It's an accounting trick that is legal and allows a team to extend out a bonus beyond the time of how long the player's contract would actually run.

At some point, the NFL might make some changes in how teams maneuver around the cap, but for now, the Saints are doing everything they can to keep kicking the can down the road. It is already hurting them in terms of their ability to add more talent, but they remain competitive in a bad NFC South in the meantime.

  
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