Cap figures courtesy of OverTheCap.com … I mean, where else are you going to get this info?
The San Francisco 49ers’ trade up to three solidifies the top of the 2021 NFL Draft: the names are to be determined, but they’re going to be quarterbacks. The mystery begins at pick number four, where the Atlanta Falcons sit. The Falcons have a new GM (Terry Fontenot, formerly of the New Orleans Saints), new head coach (Arthur Smith from the Tennessee Titans) and a quality quarterback in Matt Ryan, the 2016 NFL MVP. Ryan turns 36 a couple weeks after the draft, and has shown some signs of his age, slipping to 18th in Adjusted Net Yards Per Attempt in 2020. But would the Falcons really move on after guaranteeing him $21 MM just a few weeks ago?
First, let’s look at that restructure. The Falcons lowered Ryan’s 2021 salary from $23 MM to $2 MM, converting the $21 MM difference to signing bonus and spreading it over the remaining three years of the deal ($7 MM each in 2021, 2022, and 2023). That lowered his 2021 cap hit by $14 MM, from $40.9 MM to $26.9 MM. It also increases future guarantees; Ryan now has $40.5 MM in prorated bonus money after this season.
It’s easy to understand why some interpret this move as taking a QB off the table. The $26.5 MM dead money the Falcons had prior to the restructure was high; $40.5 MM would eclipse Carson Wentz’ $33.8 MM charge as the biggest of all time.
But I would argue this cap hit (and most dead money hits generally) should be seen as a sunk cost—money that was already paid anyway. The Falcons were going to give Ryan the $21 MM; whether it hit the 2021 cap or the 2022/2023 caps is a matter of accounting convenience. No new money changed hands as a result of the restructure. If the Falcons move on from Ryan after 2021, they will have paid him the same amount of money over the two-year period 2021-2022 as if they’d never restructured him. The dead money is more of a psychological barrier than a real one—that money was paid.
And the Falcons had a pretty compelling reason for wanting that money to hit the cap in 2022: they had negative 2021 cap space. Big commitments, an aggressive approach to cap management, and a shrinking cap because of a COVID-depressed economy left the Falcons $23.2 MM over the cap entering the offseason. As of this writing, even with restructures to Ryan, left tackle Jake Matthews, and linebacker Deion Jones, the Falcons sit just $214 K over the cap. They’ll need to clear more space just to sign the 2021 draft class. There was no realistic way the Falcons could get under the cap without restructuring Matt Ryan’s contract.
You can argue Atlanta owner Arthur Blank won’t stand for Ryan’s dead cap hit in 2022. You can argue that the dead money looks gross (more on that in a minute) and Fontenot and Smith won’t want that PR hit in 2021. You can even argue none of the QBs available at 4 are worth drafting and Ryan has too much left in the tank to move on. But if you want to argue the Falcons restructuring Ryan proves they want to build around their veteran signal-caller, I’m going to stop you right there. They restructured Ryan because they had to. No matter what path they choose, this restructure is going to pose problems.
Dead Money Blues
The Falcons essentially have five options for Ryan in 2022:
- Trade Ryan and eat $40.5 MM in dead money
- Cut Ryan post-6.1, eat $24.9 MM in 2022, $15.6 in 2023
- Play Ryan on a $48.5 MM 2022 cap hit
- Extend Ryan beyond 2023 (his age 38 season), adding years and future dead money beyond 2023
- Add void years, paying Ryan less in 2022 and 2023 and kicking the can down the road so he takes up space when he’s not even on the roster anymore in 2024 or whatever
I understand why people think option #1 is unpalatable—biggest dead cap hit ever, gross!—but I can’t look at any of the other four and think they look great, either. Paying him nearly $50 MM seems like a non-starter, and continuing to defer the bill is a big reason the Falcons are where they are.
After Ryan’s restructuring, he’s got an attractive contract for the acquiring team: two years, $51.25 MM total. That’s a nice deal for a player who, while aging, remains a quality quarterback. We just saw the Tampa Bay Buccaneers win the Super Bowl by adding 43-year-old Tom Brady on a similar deal to a team already boasting a quality supporting cast. It’s not hard to imagine a team in a similar boat pursuing Ryan, who will turn 37 before the 2022 season. On that contract, assuming Ryan has a solid, healthy 2021 season, he might fetch the kind of trade return that would make swallowing the dead money easier.
As of this writing, the Falcons have about $37.5 MM against a projected 2022 cap of $203 MM, per overthecap.com. That sits in the middle-of-the-pack, but the problems run deeper: Atlanta has an NFL-low 20 players under contract. While they do have nine picks in the coming 2021 draft, they still have plenty of work to do to assemble the team of the future. A $40 MM+ cap hit for Ryan (live or dead money) will pose problems.
Atlanta basically has two options to reduce his 2022 cap hit to a manageable level. One, they can designate him a post-6/1 cut (which teams can do with two players cut before June 1) to spread his remaining dead hit over two years. Note that they can’t actually wait until June 1, as they incur a $7.5 MM roster bonus on the third day of the league year. Teams cannot designate traded players as post-June 1 cuts, so the options are more limited if Atlanta elects to trade Ryan.
The other option is to restructure. The Falcons can convert all but about $1 MM of Ryan’s 2022 salary and roster bonus to a signing bonus and spread it over the life of the contract. That’s only one more year, but they could add as many as three additional years to spread the bonus further, whether real years or funny money “void” years. Restructuring could save up to $18 MM, if they convert the maximum amount available to bonus and spread it over the maximum five years.
Of course, restructuring just kicks the can down the road, again. Ryan’s 2023 cap hit would eclipse $48 MM again after such a restructure. His dead money would exceed $33 MM. Even if they keep him through 2023 on that arduous hit and move on at that point, they’d still be on the hook for $13.5 MM in dead money. If they don’t want the $48 MM 2023 hit, they’ll need to restructure him yet again. At some point, the Falcons need to get off this merry-go-round.
And let’s face it: if the championship window for this Falcons team hasn’t closed, it’s only open by a sliver. The Falcons faced some disastrous luck to finish 4-12 in 2020, but their Pythagorean Won-Loss suggests a 7-9 team, which matches the team’s mark in 2018 and 2019. They haven’t been good for a while, and it’s going to be hard to build given the cap situation and the age of some of their key players, notably Ryan and star receiver Julio Jones, now 32.
Even with three teams ahead of them certain to take a quarterback, attractive options remain available for the Falcons at four. The top two picks seem set, with the Jacksonville Jaguars locked in on Clemson’s Trevor Lawrence and the New York Jets focused on BYU signal-caller Zach Wilson. Rumors are flying about what the 49ers might do at 3, but with Ohio State’s Justin Fields, North Dakota State’s Trey Lance, and Alabama’s Mac Jones all in play, a top-tier prospect will be available. The team will have to determine whether one of the available QBs fit new head coach Arthur Smith’s scheme and has the traits the scouting department values.
The GM Situation
I’ve laid out the case thus for the Falcons drafting a quarterback at 4, but there are compelling reasons not to. While he may be older, Ryan remains effective, and Atlanta certainly shouldn’t be effective QB play for granted. Ryan’s role in restoring competence and professionalism to an organization rocked by the Michael Vick scandal puts him in high esteem in the city and undoubtedly with owner Arthur Blank. But the biggest reason not to pick a quarterback, in my estimation, is rookie GM Terry Fontenot.
I’m not bad-mouthing Fontenot; he’s worked for a successful organization (the New Orleans Saints) and his track record suggests someone who has quality experience in a leadership role (he ascended to Director of Pro Scouting back in 2013), yet is still fairly young (40 years old). That’s a quality resume for a new hire.
Like nearly every new hire, however, Fontenot has had little opportunity to build an organization. He will be relying on key figures like Director of College Scouting Anthony Robinson, advisors (and former GMs) Phil Emery and Ruston Webster, and national scout Joel Collier. These are all holdovers from previous GM Thomas Dimitroff’s regime. Fontenot may well keep some of these voices in future years, but the typical hiring and firing cycle in the scouting calendar resets after the draft. He will likely bring in some of his own people at that point. If Fontenot is going to pick his QB of the future at 4—arguably the biggest decision a general manager makes in his career—he’s going to do it leaning on the counsel of people he didn’t hire.
UPDATE 4/6: Fontenot has made two key hires with college scouting backgrounds, Vice President of Player Personnel Kyle Smith, and Assistant Director of College Scouting Dwaune Jones, who worked with Fontenot in New Orleans. Still, a lot more front office restructuring figures to take place after the draft.
That’s especially scary, because unlike Dimitroff or, say, new Detroit Lions GM Brad Holmes, Fontenot doesn’t come from a college scouting background. He’s worked his entire 19-year front office career on the pro scouting side, dealing with current NFL players. So while he may not fully trust his holdover advisors, he may not feel comfortable with his own judgment on rookie quarterbacks either. The safer option might be to take the best player available, perhaps Florida tight end Kyle Pitts, LSU wideout Ja’Marr Chase, or one of the draft’s top tackles (Oregon’s Penei Sewell or Northwestern’s Rashawn Slater). He could also trade back, accumulating more picks and saving money on the rookie contract. Number four pick last year, Andrew Thomas, had a cap hit of $5.8 MM in his first year; #9 pick C.J. Henderson’s year one cap hit was only $3.7 MM. That’s something to consider for a team as cap-strapped as the Falcons, and that’s before you factor in the draft capital they stand to add by moving back.
As a columnist, I suck at hot takes because I tend to argue both sides of the issue, as I’ve done here. The bottom line, too, is something of a contradiction: in my estimation, the best thing for the Falcons franchise to do is draft their QB of the future at four overall, but if I were in Terry Fontenot’s shoes, I would probably trade back. Whatever path he chooses, Fontenot has his work cut out for him, saddled with a team whose reputation outstrips its success and a number of thorny cap issues to untangle. Whichever path he chooses, Fontenot will set the wheels in fate in motion, setting the course for both for his own career and for the future of the Atlanta Falcons.