Updating the Steelers salary cap situation after the T.J. Watt restructure

On Wednesday, it was reported the Pittsburgh Steelers restructured T.J. Watt’s contract for 2022 and freed up $6.75 million against the salary cap.

Although I usually give a detailed breakdown as I keep track of every dollar towards the salary cap throughout the offseason, once training camp hits all bets are off. With players coming and going, injury settlements, and things of that nature, it’s not the exact science that it is from March through July. After the Steelers set their 53-man roster, other things come into play as contracts get moved out with dead money, all the contracts on the roster count, and players are signed of the practice squad. With varying reports, it’s more difficult to keep a running total.

But all hope is not lost as websites such as overthecap.com (OTC) and spotrac.com give enough information to compile approximately where the Steelers stand with the salary cap.

Before getting into where the Steelers stand after T.J. Watt’s restructure, we must get a better idea as to where they stood before this occurred. Before the restructure, this is what each website reported as the Steelers cap space:

OTC: $2,709,254
Spotrac: $2,483,989

So why is there a discrepancy? First, OTC has the Steelers with more than $200k in their starting salary cap than what Spotrac does. There are some salaries that differ by a few dollars, but there are others that differ even more. Both Diontae Johnson and Chris Boswell have a salary cap hit of $1,180 more on Spotrac than they are listed on OTC. A big discrepancy is Miles Boykin, who has a higher salary cap hit on Spotrac by $214,232 because they continually, and I believe incorrectly, have Boykin’s prorated signing bonus follow him from Baltimore.

One more discrepancy between these two websites comes down with the Steelers practice squad. With two different types of players on the practice squad, they bring two different types of salaries. Players who are typical “practice squad eligible” players are paid $11,500 each week for 18 weeks of the season which brings their salary to $207,000. For veteran players, they have a range of their salary with the minimum being $15,400 a week and the maximum of $19,900 a week. This means a veteran player, if on the practice squad for all 18 weeks, could earn between $277,200 and $358,200. For the two veteran players the Steelers have currently on their practice squad, Spotrac has them both at the lowest possible salary while OTC has them at the highest possible salary.

For me, my estimated number comes in very close to OTC. I would rather account for a higher salary for the practice squad players, and I know OTC also takes into account some other things such as pay for attending OTAs which Spotrac did not have throughout the offseason. Bringing it all together, the salary cap space I believe the Steelers had prior to T.J. Watt’s restructure was about $2.7 million. This amount was not enough for the Steelers to carry into the season in order to do business.

With Watt’s restructure, $9 million of his $24 million base pay was converted into a signing bonus. This means that $2.25 million of this money is spread out over each of the four seasons remaining on his contract. By the Steelers only restructuring part of Watt’s contract, they have kept his future salary cap numbers down to below what his salary cap number would have been in 2022 (just over $31 million) had there not been a restructure. Based on the numbers, this restructure does not hurt the Steelers very much in future years.

So why didn’t the Steelers restructure T.J. Watt’s contract for more? If they could have gained as much as $17.2 million on the salary cap, why not do it? It’s simple, the Steelers are doing what fans want them to most of the time and they are not “kicking the can down the road” any more than they need to.

With the restructure of T.J. Watt, I currently have the Steelers salary cap space at approximately $9.45 million.

This number does not yet reflect Hamilcar Rashed Jr. going on the Practice Squad/Injured List. What will ultimately determine how much that affects the salary cap is how long he is out due to injury and another player is in his spot. When a player is out due to injury but could return, ultimately the Steelers are paying the injured player (which isn’t the full salary if they have a split contract) and the player taking their spot on the roster. When the player returns, it ultimately saves a little money because the Steelers are back to paying one player. It’s not the easiest thing to explain or keep track of, hence why preseason and regular season salary cap calculations are hard to keep up with an exact amount. Just to clarify, if Rashed stays on the Practice Squad/Injured List the entire season it will ultimately cost the Steelers about $200k. But this is one of the types of “in-season expenses” the Steelers need to have the cap space to do.

When it comes to the amount of cap space the Steelers need to conduct in-season business, I used to estimate the Steelers taking $5 million into the season for their expenses but other factors have caused me to increase the amount. Between paying players full salaries each week when they are elevated off the practice squad as an added expense, and the league minimum salaries going up in order to bring in other players, the Steelers would probably still be skimping by only taking $7 million in the season. If their amount is giving close to the $9.5 million range I believe they are in good shape to go into the year, but this is not money put aside to go try to sign a higher-salaried free agent.

One item I’m very curious about which is the same on both OTC in Spotrac is the salary of Marcus Allen when he was re-signed to the 53-man roster last week. Marcus Allen had an original-round restricted free agent tender of $2.54 million for his salary for 2022. Once the Steelers released him, I did not think they would sign him back at the same amount, especially since he was a free agent for a couple days. Perhaps this was the agreement Steelers made with Allen when he did not make the 53-man roster but returned once the Steelers put other players on the Reserve/Injured List. To me, I would have signed Allen back at a smaller salary as long as the rules allowed it. But, for now, Allen’s initial salary that he had throughout the offseason is what I have calculated for the Steelers salary cap space since both sites have it as their value.

So the Pittsburgh Steelers have now freed up the money that they need to conduct business during the 2022 NFL season. Much like I suggested throughout the spring and summer, they waited until just before their first game to see what amount they would need and only pushed the money into the future that they actually needed. Even if the Steelers wanted to spend a little more for a salary of a player to come in mid year, they should still have enough to do so.

Does the explanation of the Steelers salary cap space make sense? Are there any questions you may have? Please feel free to leave them in the comment section and I will do my best to answer.

For a complete breakdown of the Steelers salary cap situation, and T.J. Watt’s restructure, check out the Steelers Stat Geek podcast below: