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Despite tight salary caps, Bills have room for big Josh Allen extension

Despite tight salary caps, Bills have room for big Josh Allen extension

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Bills Josh Allen

Bills quarterback Josh Allen is in line for a big contract extension.

Buffalo Bills General Manager Brandon Beane has enough wiggle room to manage the salary cap this season and get a giant contract extension done for quarterback Josh Allen.

There is a good chance there will be some collateral damage in 2022 in the form of salary cap casualties. Center Mitch Morse and defensive tackle Star Lotulelei, both safe for 2021, are the most at risk of being released in 2022.

The Bills currently stand $3.69 million under the 2021 NFL salary cap, according to the sports financial website Spotrac.com. The base leaguewide cap is $182.5 million. The cap for the Bills is $188.3 million because of the unused money from 2020 that they rolled into 2021.

This year’s cap is tighter because of the drop in NFL revenues due to the coronavirus pandemic. The cap went down $15.7 million, from $198.2 million in 2020. That 8% decrease is the biggest ever.

The Bills are tight to the cap for next year, too, because the cap is not expected to rise as high as many had hoped.

Spotrac.com estimates a cap increase of $10 million per team for next year, to $192.5 million. The Bills are just $1.1 million under that total, according to Spotrac. That includes big cap numbers for both Allen and linebacker Tremaine Edmunds. The Bills just exercised the fifth-year options for both players. Allen currently is counting $23 million and Edmunds $12.7 million in 2022. The Bills could bring both of those numbers down by striking contract extensions with the two players.

There was speculation early in the year among media and some agents that the NFL’s new television contracts – hammered out in March – would allow the cap to rise more in 2022. The deals are worth about $110 billion over 11 years, according to Sports Business Journal. However, it appears the new broadcast money isn’t going to flow into the revenue stream until 2023.

“I don't know exactly where it's going to be next year, probably not a huge increase,” Beane said of 2022 before the draft. “I mean, there's less uncertainty than there was a year ago, but there's still a lot of uncertainty. Are we definitely going to have full stadiums, which impacts the revenue, which impacts the cap? All those things will be part of the process, but the cap is probably not going to go up a lot next year. ... I think a lot of teams, including us, are still going to have some tough decisions going forward.”

As Beane suggested, full attendance in 2021 could push the cap figure up for ‘22.

However, two league sources told The News this week that they would be “surprised if it gets anywhere near $200 million” for 2022.

"We’re kind of projecting 195 to 200," Beane said on a SiriusXM radio interview this week. "I’m hoping closer to 200, just to be able to fit as many guys as we can.”

For the near future, the Bills don’t have to make any moves to create cap space.

The Bills need to sign their eight draft picks. But only the top three picks are expected to have higher cap figures than the 51st player on the salary list. The net increase for the draftees over what is already being counted is only about $1.3 million.

Once the regular season starts, the cap counts the top 53 players, not the top 51. The team also will need roughly $3 million in cap space for spending throughout the regular season.

The calculation for the regular season is rough at present because some younger, cheaper players currently not in the top 51 are sure to beat out some higher-priced veterans, creating more space.

How much space will the Bills need in 2021 and 2022 for a contract extension for Allen? There are so many variables in terms of length of the deal and the structure, it is hard to say for certain.

The deal Houston gave quarterback Deshaun Watson last year, just before his fourth season, is a good place to start. The deal was struck in early September 2020. Watson got a four-year, $156 million extension, worth an average of $27 million. He got a $27 million signing bonus.

The expectation is the Bills will want to stretch out Allen’s deal a little longer, to keep him in the fold longer and to stretch out his bonus money over more years, thereby minimizing the cap hits in 2021 and 2022.

Allen currently is scheduled to count $6.9 million against the cap, which includes a $2.6 million roster bonus he will get at the start of training camp. If the Bills were to strike a deal before the start of camp and spread out a $30 million bonus over seven years (a six-year extension plus 2021), it is possible they could keep his cap figure for 2021 in the $8.5 million range.

Watson’s cap figure for 2021 (the first year of his extension) is $15.9 million. So it is clear that any extension for Allen would allow the Bills to significantly lower his current 2022 cap charge of $23 million.

What about Edmunds? It would be easier on this year’s cap for the Bills to wait through the 2021 season and strike an extension for him in 2022, either before the league year starts in March or after.

Given the tight cap in 2022, it is easy to imagine the Bills needing to make some cuts to create more space, especially if they want to strike an Edmunds deal. The Bills can part ways with Morse after 2021 and save a maximum of about $8.5 million in 2022. They can part ways with Lotulelei and save a maximum of $6.7 million against the cap in 2022.

One veteran who is in a less precarious cap position for 2021 as a result of a contract renegotiation is defensive end Mario Addison. The Bills wouldn't save much cap space this year by releasing Addison, something first reported by The Athletic. In the reworking of his deal, $3.25 million of his $4.07 million base salary for this season became guaranteed, according to documents obtained by The News. Addison still would count $7 million against the cap if he were released in August, vs. about $8.5 if he played the whole season.  

Beane still has some space-creating levers at his disposal. The Bills created $7.5 million in space in March by restructuring the contract of Tre’Davious White, turning base salary into bonus money that gets spread out over the life of the contract.

Beane still could easily create more cap space by doing similar restructuring of the contracts of Dion Dawkins, Stefon Diggs and Jordan Poyer. Given the in-season expenses and the increase in Allen’s cap figure that will come with an extension, Beane is likely to need to restructure at least one of those veteran contracts to create space.

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Bills/NFL writer

Mark Gaughan is in his 37th year at The Buffalo News. He is past president of the Pro Football Writers of America and served as a selector for the Pro Football Hall of Fame for 12 years.

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