The New York Giants are currently in a salary cap bind as they prepare for free agency with negative-$23,883,036 in cap space, per Over the Cap.
General manager Joe Schoen has vowed to fix that so the team can begin to dig out of the massive hole left behind by four years of mismanagement by outgoing GM Dave Gettleman.
Schoen has said he wants to clear $40 million in cap space this spring, which will entail clearing a lot more in order to net that amount.
One way to achieve that goal is release players outright, but that is not always the best course of action as teams can get saddled with huge dead cap charges.
Another creative way to reduce the salary cap is by restructuring existing contracts. OTC describes this process as “the conversion of scheduled payments such as base salary or roster bonuses into signing bonuses that are prorated equally across the length of the contract, over a maximum of five years.”
There are two types of restructures — ‘simple’ restructures and ‘maximum’ restructures:
A simple restructure converts payments into prorated signing bonuses within the confines of the remainder of the contract. Teams typically have the ability to unilaterally execute simple restructures without any action necessary from the player.
A maximum restructure 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.
OTC reports the Giants can go the ‘simple’ route and restructure $43,359,066 in contracts which would yield $18,765,030 in cap space. Or, they could go the ‘maximum’ route and restructure $87,276,302 in contracts and gain $62,682,266 in cap space.
Based on the OTC numbers, the simple route still leaves the Giants well short of Schoen’s overall goal. The maximum route would likely mean committing to players the team may not have been otherwise willing to commit to long-term.
So, the solution for Schoen is probably somewhere in the middle and leaves him with his desired $40 million in open cap space.
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