Derwin James and the LA Chargers made headlines on Wednesday when the two sides agreed to a record-setting contract extension. After holding in during Chargers training camp, James agreed to a four-year, $76.4 million contract extension that made him the highest-paid safety in league history.
The Bolts have given out a lot of money this offseason between new contracts for Derwin James and Mike Williams, signing J.C. Jackson and a slew of other free agents as well as trading for Khalil Mack. That is the benefit of having an elite quarterback on his rookie deal, who is next for a massive contract extension.
James' contract should not restrict the team's ability to extend Justin Herbert to a record-setting deal when the time is right. Herbert's big cap hits won't come for some time and even then, the team is freeing up more money in the future with the salary cap growing as the TV rights grow.
Tom Telesco has been very savvy in how he has structured the contracts that he has given out this offseason and the same can be said for Derwin James. The exact details of James' contract have been revealed with his cap hits through the 2026 season.
Making sense of Derwin James contract figures for the LA Chargers:
We have seen Telesco frontload recent contracts before and he does so again here with James and it is such a smart way to do business. First, it is a smart way to maneuver the money as the team is playing other players' big cap hits this season and next season that will either be significantly reduced or off the books by the time 2024 rolls around.
Second is the fact that the salary cap is expected to jump in 2023 and then take a massive jump in 2024. The Chargers are obviously preparing for that massive jump and by the time 2024 rolls around, a $19.8 million cap hit for James probably does not seem that bad.
Los Angeles can also get out of the deal in its last two years as well if things go really bad. Obviously, the Chargers, James and the fans want him to continue to succeed and play out the entire deal. But if things do go wrong the Chargers have given themselves the freedom to get out of the contract.
If the Chargers cut James in 2025 they will carry a $14.2 million dead cap hit and save $9.6 million in cap space. If the team cuts James in 2026 they will carry a $7.1 million dead cap hit and save $17.5 million in cap space.
So while James has a huge salary-cap hit in those years, it is not something that the Chargers are locked down and committed to. They can get out of it if they need to, depending on the situation.