After his 13th NFL season in Atlanta, Matt Ryan’s contract has come into sharp focus with a new regime taking over Atlanta. What is the situation with Ryan’s contract? What is his impact on the Atlanta Falcons salary cap, and what options do the Falcons have in terms of moving on from Matt Ryan?
Matt Ryan’s contract details and bonuses
Matt Ryan signed a five-year contract extension worth $150 million per year with the Falcons in 2018. The contract made Ryan the highest-paid quarterback in NFL history at the time, as he was the first player to receive an annual average value of $30 million per year.
As part of his extension, $94.5 million was fully guaranteed at signing. That included a $46.5 million signing bonus and a $10 million option bonus in 2019. A further $5.5 million of his 2021 salary became guaranteed on the third day of the 2019 league year. That takes the total guarantees in the contract to $100 million.
At the end of the 2019 season, Matt Ryan and the Falcons restructured his contract. The Falcons converted $12 million of his 2020 salary into a bonus. The move created $9.4 million in cap space in 2020. However, it increased his cap number by $3.13 million in each of the following three seasons.
Matt Ryan’s contract length is for a further three years
Ryan had one more season remaining on his old deal when he signed his extension in 2018. Therefore, Ryan is signed with the Falcons through the 2023 season. As we head into the 2021 offseason, that means Ryan has three years remaining on his deal. However, 2021 will be the final season in which Ryan has any guarantees remaining in his contract.
How does Matt Ryan’s contract affect the Falcons’ salary cap?
Former general manager Thomas Dimitroff has left the Atlanta Falcons with some salary-cap concerns heading into the 2021 offseason. With 42 players currently under contract, the Falcons are projected to be around $35 million over the 2021 salary cap. With a cap number of around $41 million, Ryan is set to count for a projected 23 percent of the Falcons cap space in 2021.
The Falcons have some extremely tough decisions to make regarding their salary cap in the coming weeks. Matt Ryan forms a big part of that.
What options do the Falcons have with Ryan this offseason?
The Falcons need to create space and fast. With Matt Ryan’s contract occupying a large amount of salary cap space, the Falcons may have to make some tough decisions with their QB.
Moving on from Matt Ryan is not a realistic option in 2021
From a salary cap standpoint, moving on from Matt Ryan is a tough ask for the Falcons in 2021. Across the signing bonus, option bonus, and restructure payment in the last few years, Matt Ryan has a lot of prorated bonus money remaining on his contract. There is $17.9 million in prorated cap hits remaining in 2021 and 2022, with a further $8.6 million in 2023.
If the Falcons release or trade Ryan in the 2021 offseason, all of that money accelerates onto the 2021 salary cap. Therefore, Ryan would leave a minimum of $44.4 million in dead money if he was released or traded. If the Falcons release Ryan, there would be another $5.5 million in dead money due to his remaining guaranteed salary in 2021.
The Falcons have the option to designate Ryan as a post-June 1 release
If the Falcons were to cut or trade Ryan after June 1, they would stop future dead money hitting the 2021 salary cap. In the event of him being released with a post-June 1 designation, Ryan would carry a cap hit of $23.4 million in 2021, saving $17.5 million. The remaining $26.5 million in dead money would then be counted against the cap in 2022. This spreads the pain into a season where the salary cap is expected to be higher than currently projected for 2021.
If the Falcons were to trade Ryan as a post-June 1 transaction, then they would incur just $17.9 million in dead money. Ryan’s $5.5 million in guaranteed base salary would move with him to the new team. The team acquiring him would be responsible for a cap number of just $23 million in 2021. In 2022, that number would be $23.75 million and $28 million in 2023. Depending on the price the Falcons would ask for in a trade, that would be a team-friendly deal on which to acquire a former MVP.
The issue for the Falcons is that this method does not solve their immediate needs. They need to be under the NFL salary cap before the new league year in March. They would still need to create $35 million in cap space before then. Trading or releasing Ryan as a post-June 1 transaction would essentially mean the Falcons are committing to a rebuild of their roster.
Could the Falcons restructure Matt Ryan’s contract?
A contract extension or a restructure seems the most likely option for the Falcons when it comes to Matt Ryan this offseason. A restructure would involve converting $23 million of Matt Ryan’s base salary into a signing bonus. According to Over The Cap, the Falcons could save $14.6 million against the cap by restructuring Ryan’s deal in 2021.
However, the issue for the Falcons is that Ryan already has a massive cap number in 2022. As of now, Ryan will count around $41.6 million against the cap in 2022. Shifting more money into that season would likely take him over $50 million.
The expectation is that the cap will rise in 2022. Yet, a $50 million cap number is still an enormous percentage of their cap space. Additionally, it would increase the cost of releasing or trading Ryan to around $30 million in dead money next offseason.
The Falcons could have an open negotiation with Ryan about restructuring the deal in other ways. He already has $7.5 million roster bonuses in his contract in the next two seasons, and the Falcons could add to those.
They would likely have to guarantee that money in order for Ryan to agree to a restructure. Restructuring Ryan’s deal is a difficult option for the Falcons. They would be potentially sacrificing the immediate future to reduce the pressure on the 2021 season.
The Falcons could consider an extension to Matt Ryan’s contract
At 35, with three more years already remaining on the deal, this is likely a last resort for the Falcons. However, they may end up with little or no choice. According to Over The Cap, an extension could save the Falcons $17.5 million in cap space in 2021. The Falcons have a couple of options for how they utilize an extension.
They could do a legitimate extension. Doing so, however, will likely require them to guarantee a large portion of Ryan’s salary over the next three seasons. They would essentially be tying themselves to the 35-year-old QB until at least his age 38 season. We have seen QBs playing beyond 40 in recent years, but it is a big risk to take.
Another option would be to extend the deal by adding void years. The Falcons could essentially restructure salary into a signing bonus. However, by adding two void years, the cap hit for that signing bonus would spread across up to five seasons.
For example, the Falcons could reduce Ryan’s 2021 salary to $2 million and convert it into a signing bonus while adding two void years. That $19 million in signing bonus would then count as $3.8 million per year in prorated bonuses over the next five seasons.
Once again, it makes it tough for the Falcons to cut Ryan in 2022 as his dead money would be over $40 million. However, it could be a way for the Falcons to free up cap space in 2021, without committing to Ryan as their QB beyond 2023.
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