How the Chiefs can get Under $175 Million in Salary Cap Hits in 2021

The NFL has ruled on how potential revenue shortfalls could impact future salary caps, and the Kansas City Chiefs may need to get to $175 million in salary in 2021.

The NFL has ruled on how potential revenue shortfalls will affect the salary cap, and the news isn’t great for the Kansas City Chiefs.

The lowest the 2021 salary cap can now drop, due to lower-than-expected profits because of COVID-19, is $175 million. This would be a drop of $23.2 million compared to the 2020 salary cap.

For some teams, this number won’t be terribly hard to hit. The Indianapolis Colts have an effective salary cap space of over $108 million in 2021. For other teams, this number might be nearly impossible to hit. The Eagles are $54 million over the previously-projected salary cap in 2021, per overthecap.com, and this projection (along with the Colts') is based on the salary cap rising.

Where do the Chiefs land? Closer to the Eagles, but not exactly in their special slice of salary cap hell. As of now, if the salary cap was $175 million and cap rollovers were factored in, the Chiefs would be roughly $21.6 million over the salary cap in 2021.

“Roughly” is used intentionally here, as the specifics of how exactly opted-out players will impact the cap is unknown right now. The general consensus seems to be that if a player opts out of the season this year, then their contract will “toll,” essentially shifting their current contract down the road by one year.

The Chiefs have had two players opt out of the 2020 season: running back Damien Williams and guard Laurent Duvernay-Tardif. Their combined $8.2 million salary cap hit will now carry over into the 2021 season and will be taken off the 2020 salary cap.

Note: There is a bit of confusion about how exactly LDT’s contract will toll as the contract, before he opted out, would have voided in 2021. Now that his contract tolls, his number becomes a bit uncertain.

All of this is a fancy way of saying that if a player opts out of the 2020 season, their contract doesn’t count on the 2020 salary cap.

One thing that must be considered when talking about the 2021 salary cap is that the Chiefs only have 50 players under contract in 2021 as it currently stands, according to Over the Cap. A ton of good players and solid depth will also become free agents next year, including names like Charvarius Ward (RFA), Sammy Watkins, Bashaud Breeland, Daniel Sorenson, Mike Pennel, and more. The Chiefs will need to retain or replace this depth next year in order to stay competitive for a Super Bowl.

If we consider all these things, it still all leads to the same conclusion. The Chiefs will need to make some tough choices in 2021 if the salary cap does indeed come in at $175 million. However, there are many ways for the Chiefs to hit this mark and it will require more salary cap genius by Brett Veach and company to do so.

For the following examples, a team salary cap of $187.8 million will be assumed as the Chiefs salary cap in 2021. This is the $175 million set by the league, plus the $12.8 million in salary cap space the Chiefs have right now.

Patrick Mahomes’ roster bonus

The first thing the Chiefs will almost assuredly look at in order to save money is Patrick Mahomes’ $21.7 million roster bonus.

In The Art of NFL Contracts: Part 4, I went over how teams can restructure contracts to save money, and that is mainly what the Chiefs would do with Mahomes’ roster bonus. The Chiefs would convert the money in a roster bonus to a signing bonus, which the team could then spread out over five years against the salary cap.

If the Chiefs convert all of Mahomes’ 2021 roster bonus to a signing bonus, the team can immediately save $17.4 million. This doesn’t come without a cost, however. Mahomes’ salary cap hit until 2025 would go up by $4.4 million each year. This isn’t a small chunk of change.

The Chiefs can choose a smaller portion to convert to a signing bonus, but Mahomes’ roster bonus is definitely the first place the Chiefs will be looking for instant salary cap savings, as Mahomes is the safest bet the Chiefs can mortgage some of the future on.

2021 salary cap savings:

Convert full roster bonus: $17.4 million

Convert $12 million of roster bonus: $9.6 million

Restructure veteran contracts

After Mahomes, there are other players that could be in line for contract restructurings.

Chris Jones, Frank Clark, and Tyreek Hill are all established veterans that would have multiple years on their contracts in 2021 that could be targeted for savings by converting salaries or roster bonuses into signing bonuses. We already saw Frank Clark restructure in the 2020 offseason, so he seems fine with the idea of doing this.

One thing to remember with contract restructures is that it makes the player harder to cut in the future, due to pushing guaranteed money later into the deal. This can be seen with linebacker Anthony Hitchens, as he is currently uncuttable because he restructured his contract by a fair bit in the 2019 offseason, pushing guaranteed money into the later parts of his deal.

Jones, Clark, and Hill are established veterans for the Chiefs who would be good bets still, so they will be prime candidates for restructures come 2021. Like Mahomes, their whole salaries/roster bonuses don’t have to be converted, but if they were, that would mean the most immediate salary cap savings.

2021 salary cap savings:

Tyreek Hill, convert full roster bonus of $11.8 million: $5.9 million

Chris Jones, convert full base salary of $20.6 million: $13.7 million

Frank Clark, convert full base salary of $17.6 million: $11.7 million

Cut Eric Fisher

There is only one player the Chiefs could cut to save more than the $11.5 million in salary cap space the Chiefs would get back if they cut left tackle Eric Fisher, and that would be cutting Tyrann Mathieu. The latter scenario seems very unlikely currently, so the safest bet for a large salary cap savings cut is Fisher.

Whether this happens would most likely be predicated on whether Lucas Niang progresses nicely off his injury and in rookie year. It’s hard to imagine the Chiefs releasing a safe, starting left tackle if they do not have a solid replacement. If Niang is ready though, Fisher’s time on the Chiefs might be coming to an end.

2021 salary cap savings: Cut in 2021 offseason: $11.5 million

Cut Anthony Hitchens

In the 2021 offseason, Hitchens is finally cuttable.

Possibly Brett Veach’s worst move as GM, Hitchens has never contributed enough to justify his contract. A restructure in 2019 has basically made him uncuttable until 2021 at the earliest, and even then, he would have to be cut with a post-June 1 designation, spreading out his dead money over two seasons.

Much like cutting Fisher, whether Hitchens is cut is probably dependent on how a 2020 rookie looks this year. If Willie Gay Jr. progresses nicely and can assume the role as the play-caller on defense, it might be Hitchens’ last season with the Chiefs.

2021 salary cap savings: Cut with June 1 designation in 2021 offseason: $6.5 million

Cut Alex Okafor

Whether Okafor stays with the Chiefs in 2021 will matter on how well he plays in 2020, and even that might not be enough.

The veteran makes almost $8 million in 2021 and with only $2 million in dead cap space, so he is a prime cut candidate to get the Chiefs closer to the lower cap. Okafor would have to play extremely well for the Chiefs to not be enticed by this amount of salary cap savings.

2021 salary cap savings: Cut in 2021 offseason: $5.95 million

Extend some veterans

There are a couple of veteran players the Chiefs could extend to lower their cap hit in 2021 to provide some relief.

The main player to monitor for this is Tyrann Mathieu. In 2021, Mathieu will be entering the final year of his contract that he signed with the Chiefs in 2019. He will carry a hefty salary of $19.7 million, which is the highest single-season salary cap hit for a safety in NFL history. If the Chiefs wish to keep Mathieu on another contract, then extending him and moving some of this money to later years in the extension long-term would be a good way to save money in 2021. The amount saved is entirely dependent on how the contract is structured, but the Chiefs could get an ample amount of salary cap room from this.

Other veterans like Travis Kelce and Mitchell Schwartz carry salary cap hits that are probably lower than their real value in 2021, having a cap hit of $9 million and $10 million respectively. New deals for them could lower their 2021 cap hit potentially, but it’d shave only a few million off, unless the contracts have very creative structures.

2021 salary cap savings:

Tyrann Mathieu, realistic savings in new contract: around $10 million

Travis Kelce, realistic savings in new contract: around $2 million

Mitchell Schwartz, realistic savings in new contract: around $3 million

Putting it all together

So, what could a realistic Chiefs cut-down look like?

Let’s assume they go for Mahomes' contract first. I don’t think the Chiefs want to convert all of Mahomes’ roster bonus to a signing bonus, so let’s do $16 million of it. This saves $12.8 million and the Chiefs are now $5.6 million over the 2021 salary cap.

Now suppose Lucas Niang is ready for action and impresses the coaches in practice enough to where they are comfortable with him at left tackle. The Chiefs then can cut Eric Fisher. This saves $11.5 million and the Chiefs are now $5.9 million under the 2021 salary cap.

Alex Okafor has a fine, but not great 2020 season. While he’d be a nice player to keep on a pay cut, he definitely won’t stay for $8 million. Let’s assume he won’t take a pay cut so the Chiefs cut him. This saves $5.95 million and the Chiefs are now $11.85 million under the 2021 salary cap.

Now Chris Jones has another great 2020 season so the Chiefs are comfortable with keeping Jones through the remainder of his contract. They decide to restructure some of his base salary to save more in 2021. This saves $5.3 million and the Chiefs are now $17.15 million under the 2021 salary cap.

From here, the Chiefs have enough cap space to go through a quiet offseason, re-sign some depth players, and sign their rookies in the 2021 draft. If the Chiefs wish to do more they could look at Hitchens or save a few million by extending Kelce or Schwartz.

Brett Veach has proven in the 2020 offseason that he and his salary cap team are very good at manipulating the salary cap and structuring contracts to do so. Mahomes’ contract is especially a feat of great structure that has given the Chiefs many avenues to manufacture salary cap space at will for many years into the future. Veach and co will have to use all these avenues next year to fit under a salary cap that might bottom out, but it certainly isn’t impossible to do so as the team currently stands. Hopefully, Brett Veach is up for an encore performance in 2021.