Report: Chiefs create $9.6 milllion in cap space with contract restructure

According to a report from ESPN’s Field Yates, the Kansas City Chiefs have created $9.6 million in cap space by converting some of guard Joe Thuney’s 2022 base salary into a signing bonus.

With this change (and all known signings), we now believe the Chiefs have between $4.3 million and $5.3 million in cap space — probably closer to $5.3 million.

This is essentially an accounting move. Under the contract he signed a year ago, Thuney was due a base salary of $14 million in 2022. Under salary-cap rules, all of a player’s base salary each season is included in their cap hit. With this move, all but $1.035 million of that salary (the NFL minimum for a player with Thuney’s experience) is immediately paid to him as a signing bonus. Then the cap hit for that money may be spread across this season and the three remaining years of his contract; in essence, 75% of that $12.9 million ($9.7 million) no longer counts against the 2022 salary cap.

The portion of Thuney’s yearly cap hit that is attributed to the signing bonus will now rise from $3.4 million to $6.6 million.

For a while now, we have expected general manager Brett Veach to make cap-clearing moves in order to operate in free agency. In February, our Jared Sapp laid out seven ways the team could clear cap space in 2022. Although Jared included this move as a possibility, it was way down the list.

Roster-bonus-to-signing-bonus conversions on the contracts of quarterback Patrick Mahomes and defensive tackle Chris Jones — along with the release of linebacker Anthony Hitchens and the release (or the contract restructure) of defensive end Frank Clark — seemed more likely.

The latter two moves have now been made. But why did the Chiefs move Thuney to the top of the list?

As Jared noted in February, such a move on Jones’ contract would have cleared roughly the same amount of money. But the Chiefs have already done one of these conversions on Jones’ contract. In addition, only two years remain on the deal. So while clearing $9 million on Jones’ deal is possible, it comes at the cost of making his 2023 cap hit $36 million — along with $16 million in dead money.

Mahomes’ deal, of course, was specifically designed so that large amounts of cap space could be created with the stroke of a pen. As Jared previously explained, as much as $21.9 million in 2022 cap space could have been cleared that way. But like with the Jones deal, Veach has already been to this well once before. Creating the space that way would push Mahomes’ cap hit to almost $52 million in 2023 — a year that should see a substantial bump in cap space but will still be difficult for Kansas City because it currently has only 19 players under contract for that season. It may simply be that Veach would prefer to hold off on the “nuclear option” of raiding Mahomes’ deal until then — or even better, not to raid it at all.

That brings us to Thuney’s contract. With four years remaining, it is the Kansas City contract with the second-longest remaining term — meaning that the yearly charge for the conversion would remain low. Even better, the offensive lineman’s original signing bonus was only $17 million (if you can use a word like “only” with regard to a $17 million payment), meaning that its yearly proration was only $3.4 million. Even by nearly doubling that with this move, the contract will still have only $6.6 million in dead money going into its final year in 2025.

It’s possible to argue that it makes no sense to make this move with the contract of a player who — like Thuney — is already 30 years old. It’s a compelling argument. But the counter-argument is that the Chiefs have now seen Thuney up close for a full season. It’s unlikely they’d want to make this move unless they were pretty certain that Thuney could still play for two — if not three — of the remaining years of his contract.

How do we know? Because if they didn’t believe that, they still could have used the nuclear option. And if they really believe they need more cap space in 2022, they still can.