Discussion of the potential retirement of New Orleans Saints quarterback Drew Brees was the dominant narrative of the 2020-2021 NFL Playoffs, but what happens to the remaining salary on Brees’ contract now that he has decided to retire after this season? Let’s take a look at his contract, the Saints’ salary cap as it stands, and how Brees’ retirement impacts the cap.
Drew Brees’ contract details and bonuses
On March 17, 2020, Drew Brees signed a two-year contract worth $50 million to keep him with the Saints through the 2021 season. As part of that contract, Brees received a $23 million signing bonus. However, Brees’ contract is not as simple as just a two-year deal worth $50 million.
Drew Brees has one year left on his current contract
The 2021 season was set to be the final year of Drew Brees’ contract. However, for salary cap purposes, the contract actually affects the Saints until the 2023 season. The reason for this? The Saints included two “void” years at the end of Brees’ deal. This allowed the Saints to spread that $23 million signing bonus across four years on their cap.
Any signing bonus is prorated against the cap for up to five years. Usually, a $23 million signing bonus would count for $11.5 million per year against the cap in a two-year deal. By adding the two void years to the end of the deal, the Saints spread that salary cap across four years, at $5.75 million per year.
However, on February 5, news broke that Brees had renegotiated his contract with the Saints. With Brees expected to retire this offseason, he agreed to reduce his salary to the veteran minimum of $1.075 million. As none of Brees’ salary was guaranteed in 2021, there is no reason for him not to reduce his salary. Brees will receive none of his salary in 2021 as it would not be paid until he played in a game.
What is the Saints’ cap situation in 2021?
There is no real way around the Saints’ salary cap situation other than saying it is a mess. As of February 28th, the Saints are projected to be around $65 million above the 2021 salary cap. Drew Brees’ contract was set to be their highest cap number at $36.15 million prior to the restructure. Even following the restructure, Brees still accounts for $12.225 million against the cap.
Old contracts are still haunting the Saints
The reason that Drew Brees’ contract has had such large cap hits in the past couple of years is due to money remaining from his previous deal. Brees’ previous two-year contract also had void years in the deal, and those have caused increased cap charges for the Saints on his current deal.
For example, in 2020, Drew Brees had a salary of just $2 million. His prorated bonus based on his current deal should have been $5.75 million, but due to the money remaining from his past deal, that prorated bonus cap charge was $21.65 million. Therefore, Brees had a cap number in 2020 of $23.65 million instead of $7.75 million.
That prorated bonus charge drops to $11.15 million in 2021. However, that is still double what it would have been had there not been money remaining from his old deal.
How does Drew Brees’ retirement affect the Saints’ salary cap?
Brees’ retirement is a benefit for the Saints purely from a salary cap point of view. Losing Drew Brees is not a good thing, but from a contract and salary cap situation, getting the $25 million in salary Brees was due off the books gives them some breathing space. By renegotiating the deal the Saints have removed $24 million of that money from their cap hit immediately.
However, now that Brees is retired, the cap does not simply reduce by a further $1 million. With Brees not playing in 2021, the money in the void years should accelerate onto the 2021 salary cap. Therefore, the Saints should be set to carry $22.65 million in dead money on their salary cap with Brees’ retirement.
What options do the Saints have?
Now that Brees has retired, the Saints can manipulate the cap to spread their cap hit in 2021 and 2022. This was discussed by Jason Fitzgerald on the Over the Cap podcast. The Saints can hold off placing Brees on the retired list. They have already started this process with the recent contract negotiation.
Brees salary cap hit then becomes the $11.15 million prorated bonus charge plus the minimum salary, giving him a cap charge of $12.225 million. Brees can then be placed on the retirement list after June 1. The significance of doing this is that the dead money in the void years impacts the 2022 cap instead of 2021. Additionally, that minimum salary would then not count against the cap in 2021 as it is not guaranteed.
Therefore, Drew Brees’ contract would count just $11.15 million against the Saints cap in 2021, from June 1 onwards. He would then count a further $11.5 million against the cap in 2022. This is a significantly better option than taking a $22.65 million salary-cap hit in 2021.
Until June 1, Drew Brees will count $12.225 million against the Saints’ salary cap. If they then place him on the retirement list post-June 1, that cap number will decrease to $11.15 million for the remainder of the season.