The LA Chargers made the first move of the offseason on Tuesday as the team signed Mike Williams to a new three-year, $60 million deal. Re-signing Williams was already a polarizing topic among Charger fans and those that did not want to overpay for him called the contract a bad deal when it was reported that Williams would be making $28 million in the first season.
However, the contract numbers have been revealed at Over The Cap and it is clear that the LA Chargers hit an absolute home run with Williams' contract. The contract increases in cap hit year over year, which is important considering the status of the NFL salary cap moving forward.
It is projected that the salary cap could climb $20 million next offseason and even further the following offseason due to television revenues. Some project the salary cap to be upwards of $260 million in 2024, which would be $52 million more than it is in 2022.
That is not the only reason why Mike Williams' contract is a home run for the LA Chargers.
Mike Williams only counting as $14 million in year one is a great thing and the fact that it goes up as the salary cap goes up is a great thing. However, it is not the only thing that makes this contract an absolute home run for the Chargers.
Some may look at that $27 million figure as a daunting cap hit for the Chargers, even if the salary cap does go up by $50+ million between now and 2024. After all, Williams is not one of the 10-best receivers in the league and that is nearly quarterback money.
What makes this contract so great is the flexibility it gives the Chargers. With only $40 million guaranteed on Williams' contract, there is only $7 million guaranteed for his final season. That means that if things don't go as planned and Williams is not producing, is hurt, or the team needs to free up salary-cap space, they can by cutting Williams in 2024 to save $20 million in cap space and only take a $7 million dead cap hit.
A $7 million dead cap hit will be nothing if the salary cap jumps $30 million from 2023 to 2024. And if Williams does stay on the team he will be making $8 million more than the previous year while the cap goes up $30 million. This is savvy contract structuring by the Chargers that allows the team to spend now while also allowing it to spend later.
It is really hard to not be a fan of this contract for the LA Chargers with all things considered. Sure, $27 million might seem like a lot for a receiver right now but with the cap going up, chances are we will see several receivers getting paid well over $30 million two years from now.