Leo Williams provides some cap relief

[Michael K.]

https://www.seattletimes.com/sports/sea ... gn=6249806

It's a start I guess.

Seahawks reworked Leonard Williams’ contract. What that means for the salary cap.
Feb. 6, 2025 at 10:41 am

Bob Condotta By Bob Condotta
Seattle Times staff reporter
The Seahawks began taking care of some offseason business this week — getting compliant with the salary cap — by restructuring the contract of defensive lineman Leonard Williams.

As first reported by OvertheCap.com Thursday morning, the move creates $14.1 million in cap space for 2025. The Seahawks had been about $27.5 million over the cap before the move and are now $13.4 million over the cap, according to the website.

As explained by OvertheCap.com, the Seahawks converted $18.745 million of Williams’ 2025 salary to a bonus.

They added two void years to his contract — which runs through the 2026 season — to spread out the cap hit.

That brought down Williams’ cap hit for the 2025 season from $29.1 million to $14.06 million. It increases his cap hit for 2026 to $29.6 million and adds new cap hits of $4.686 million for 2027 and 2028. Those are dummy years added solely to spread out the cap hit.

Illustrating the need for the Seahawks to make cap-cutting moves, they still have the third-least cap space available of any team even after the restructure of Williams’ contract.

The Seahawks, and all NFL teams, have to be at or under the cap when the new league year begins March 12.

Williams can still be a free agent after the end of the 2026 season and the Seahawks seem likely to consider an extension for Williams after this season that would bring down his 2026 cap hit and mean that he would be a member of the team during the void years.

Williams, 30, led the Seahawks in sacks with 11 and made the Pro Bowl for the second time in his career.

Contract restructures such as this are typically written into contracts as an option and not something the player has to necessarily agree to. Teams typically have the option to enact a restructure of turning salary into bonus — which means the player gets the money immediately instead of in regular installments throughout the season — at any time.

Void years are a fairly common tactic used to push out future cap hits.

The Seahawks generally resisted using them until the challenges created by drops in revenue because of the COVID-19 pandemic.

They have used them relatively sparingly in recent seasons. With the challenge presented by this year’s cap, and some other big questions the team needs to address, they felt it worth it to kick some money down the road.

Making it easier is the knowledge that the salary-cap numbers are expected to continue to rise.

Teams this year had $255.6 million to assemble their rosters this season. Teams are working with an estimated cap number of $265-275 million for the 2025 season — that number will be set by the start of the new league year.

Overthecap.com is basing its 2025 cap numbers on an estimate of the cap set at $272.5 million.

It is expected to continue to rise in similar increments in future seasons. The cap number is determined via a formula in which roughly 48% of all league revenues are apportioned to teams to use for player salaries.

The move with Williams came a week before a Feb. 14 date when $17.7 million of his $20 million salary for 2025 would have become fully guaranteed. That date helped spur the decision to make an alteration to Williams’ contract.

Pushing the cap hit into future seasons indicates that the Seahawks remain in “win-now’’ mode, creating space without sacrificing the roster.

Harsher moves to create more space could come later.

The Seahawks could open up $17 million in cap space by releasing veteran receiver Tyler Lockett. His cap hit of $30.895 million is the third-largest on the team, which along with his age (he turned 32 in September), has led to widespread speculation that he won’t be with the team in 2025.

The Seahawks needs cap space not just to get compliant but to make additions to the team when the free agent signing period begins March 12.

They could create cap space by redoing the contracts of quarterback Geno Smith and receiver DK Metcalf. Each is entering the final years of their contracts with Smith holding a $44.5 million cap hit for 2025 and Metcalf at $31.875 million.

The Seahawks could give each extensions that would assure they will stay with the team beyond 2025 while bringing down their cap hits.

[D-train]

Funny that when teams regularly use loophole in the salary cap to defer money into the future to get around the salary cap nobody bats and eye. But when the Dodgers do it to avoid the Luxury tax people act like MLB is doomed.

[57reasons]

It's a good start. bout time we started kicking the can to play for now, look how well it's worked for the Rams.
now cut Tyler and there's suddenly 3M to play with and more when the limits get raised. Cutting Fant and Dre Jones should add $20M more, perhaps enough to take on Joe Thuney in a trade. Extend DK and gain some more.

[Sibelius Hindemith]

So John is "going for it" next season?

[Donn Beach]

Thought he goes for it every season

[Sibelius Hindemith]

It seems to be a formula for sustained mediocrity.

[Gametime]

Funny that when teams regularly use loophole in the salary cap to defer money into the future to get around the salary cap nobody bats and eye. But when the Dodgers do it to avoid the Luxury tax people act like MLB is doomed.

I think it has more to do with the $260 25 man roster and a bunch of futures pushes and no cap, instead of just moving money around.

[Donn Beach]

The cap and the luxury tax aren't really comparible that way. There are cap ramifications of what JS is doing, it's worked into that system. I don't think it's that big a deal in how the cap is supposed to function. The luxury tax on the other hand works differently. Allowing the dodgers to circumvent paying the tax on the biggest contract in MLB history seems to me goes against it's purpose to begin with

[D-train]

If the intent of the the salary cap is parity as opposed to just saving the owners money it is a complete fail. And the lack of a cap does nothing to prevent parity in MLB. Take a look at how many SB winners there have been this century and how many WS winners there have been.

[Donn Beach]

The cap is a line teams can't cross, the luxury tax is a penalty for crossing a line. The cap creates parity in terms of team payroll, there's other reasons a team wins a SB, you just can't complain they are paying more for their roster. As I understand it JS is kicking the can down the road, be will eventually have to apply that money to a cap hit. I think the luxury tax actually has been pretty effective. But it does have to come into play. I don't see how it would with deferred payments

Okay I searched a little, this is a reddit post but it sounds reasonable

The yearly luxury tax hit is based on the average annual value of the contract. Deferrals just lower the AAV based on the idea that, bc of inflation, the deferred payments will be worth less in the future than they are now.

The luxury tax hit will still only be considered over the 10 years of the contract. It's just that instead of being $70 million each season, it will be some lower value (the athletic reported that it will be something like $46 million).

I'm not entirely sure how MLB calculates that reduced value though. I assume it's some sort of Net Present Value calculation