Why the Mike Williams contract is a great deal for the LA Chargers

Los Angeles Chargers v Cincinnati Bengals
Los Angeles Chargers v Cincinnati Bengals / Dylan Buell/GettyImages

Just minutes after it was reported that the Denver Broncos would be trading for Russell Wilson news broke that the LA Chargers would be re-signing Mike Williams to a three-year, $60 million. The Chargers avoided using the franchise tag and locked Williams down through his prime for three more seasons.

Despite Williams coming off of a 1,000-yard season, a lot of fans were not big fans of the deal. The opinion was already split on whether or not the Chargers should re-sign Williams this offseason and in his new deal, Williams is projected to make $28 million in his first season in 2022.

That is a lot of money to pay a wide receiver in one season, especially when Keenan Allen already has a $19.2 million cap hit for 2022. That is just under $50 million for two receivers on the roster and while that might seem absurd to some, in reality, this is a good deal for the LA Chargers.

Why the Mike Williams contract is good for the LA Chargers:

First of all, let's talk about this year's salary cap. The 2022 NFL salary cap was set at $208.2 million, giving the Chargers $48.9 million in effective cap space (according to Over The Cap). This Williams deal cuts that to $20.9 million, although the team can waive Bryan Bulaga to get it back to $31.65 million.

That might not seem like enough for the Chargers who need to re-sign certain players (Uchenna Nwosu, Kyzir White) or bring in their replacements, and fill other holes (defensive tackle, corner, right tackle).

What is being overlooked is two important points. The first is that the cap number could actually be lower than $28 million, with some of that salary coming via a signing bonus that is smoothed out over the life of the deal. The second is that the Chargers can still create more cap space and this Williams contract actually helps them do that.

According to OTC, the Chargers can free up $40.8 million in cap space using simple restructures (the players do not have to agree). So if there are free agents that the Chargers really want to sign they can easily free up the money and still get to $72 million in cap space even if Williams has a $28 million cap hit in 2022.

Is Tom Telesco going to restructure every contract possible? Probably not. But he has the ability to do that to still sign free agents. If Williams' cap hit is indeed close to $28 million this season then it allows the team more flexibility to push off some of those cap hits with the restructuring because Williams' cap hit will be less in the next two years.

There is also speculation that the salary cap could climb another $20 million for 2023. With only $40 million guaranteed, the Chargers could pay Mike Williams $28 million in 2022 and then only carry a cap hit of $10-12 million next season. That not only ensures that they can get out of the third year of his contract if needed with zero to no dead money, but it also opens up more space for the team for that salary cap spike.

Keep in mind: the team still has to extend Derwin James after the 2022 season. Paying Williams $10-12 million next season with a $20 million hike is better than paying him less this season only to spend more on other free agents and then potentially not have the space to sign Derwin next offseason.

Free agency still has to play out and when we look at the long-term impacts of this deal, it is clear that it is a good deal for the LA Chargers. Of course, in the short term it might not look great because of the $28 million but the Chargers have to build this year's team with the immediate future in mind as well.

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This deal makes the immediate future easier and the team still has the flexibility to sign other free agents this offseason.