If general manager Chris Ballard wants to go full throttle this offseason, the Indianapolis Colts have the ability to create over $54 million in additional cap space, according to Over the Cap.
The way that the Colts can go about doing this is through restructuring a number of player contracts.
While there can be quite a bit of nuance to the mechanics behind a contract restructure, in short, cap space is created by taking cap charges from the current year and pushing them to into future years.
An example of this would be if a player has an $8 million base salary with three years left on his contract. The team could take $6 million of that base salary–which all counts towards the current year’s salary cap–and convert that to a signing bonus, which has the flexibility to be pro-rated over the life of the deal.
So from there, $2 million will stay in the current year, $2 million will go into Year 2 of the contract, and $2 million go into Year 3.
The end result is that this would then lower the current year’s cap hit from $8 million to $4 million, with $4 million going to the two future years.
It’s important to remember, however, that while there is cap relief in the short-term, those cap charges have to hit the books at some point, so restructures do inflate a players cap hit in future years.
In terms of potential cap-savings from these restructures, there are six plyers and contracts in particular that can provide the most cap relief this season.
When it comes to these restructures, this isn’t an all or nothing proposition for the Colts either. I wouldn’t expect Ballard to max out every contract from a cap perspective, but there often some maneuvering that is done of the course of an offseason to provide more immediate flexibility.
As of now, the Colts have $24.58 million in effective salary cap space–which is what is actually available to spend. Compared to the rest of the NFL, this ranks 18th.
So if the team wants more spending power heading into free agency, then we probably see some restructures take place beforehand.
And now, I know what you’re thinking, inserting a joke about how Ballard doesn’t utilize free agency. But if he’s going to stick true to what he said at his end of season press conference and add more competition throughout the roster, then free agency–to some degree–will have to play a bigger role in 2025.