How does Aaron Donald’s retirement impact salary cap? Rams leave door open for return

OverTheCap broke down how Aaron Donald’s retirement impacts the Rams salary cap

The outlook for the Los Angeles Rams offseason took a completely different turn on Friday when Aaron Donald announced his retirement from the NFL. With Donald retiring, one of the biggest questions has been how it will impact the Rams salary cap. Prior to Donald’s announcement, it was reported that the team restructured his deal, opening up $9.2M in cap space. With that said, the restructure and retirement also has other implications.

Jason Fitzgerald from OverTheCap did a fantastic job breaking down Donald’s contract and how his retirement impacts the Rams salary cap. Here is what Fitzgerald had to say,

“Per a source with knowledge of the contract this was not a typical restructure where salary was just converted to a signing bonus. In this case the Rams converted his $5 million roster bonus, which was already guaranteed, to a signing bonus. They took $8.79 million of his salary, which was going to become guaranteed in a few days, and added it to his $20 million option bonus…The restructured contract, in light of Donald’s retirement, reads a bit more like salary cap maneuvering by the Rams to keep the door open to Donald possibly coming back to the team. If both sides were 100% on the retirement they would have simply bought his salary this year down to $1.21 million and taken out the option and roster bonuse. My guess is they want to leave the door wide open for him to come back. By doing the restructure, the Rams brought Donald’s salary cap number down to $24.97 million. Placing Donald on the retirement list would have caused the Rams to take on a $28.5 million cap charge at a minimum so this gives the Rams a little more room to work with.”

Even though Donald is retired, that doesn’t put the Rams off the hook from paying him, opening up $30M in cap space. His contract is still on the books and the Rams still have to pay Donald what he is owed. However, they can structure things in a way that works for both sides and maximizes their available cap space.

With how Fitzgerald describes it, the Rams are leaving the option for Donald to return in the case that he does end up changing his mind. While unexpected, it is possible and not totally out of the realm of possibility. We’ve seen the play out recently with players like Tom Brady who retired and then un-retired. There are also things that the Rams can do with some of the bonuses and options in the contract that they can restructure.

Said Fitzgerald,

“By deferring his salary into the option it also gives the Rams a chance to keep Donald on the roster through June, if they want, and place him on the retired list at that point. It also gives Donald months to consider if he wants to return since the contract is simply waiting for him if he returns to the NFL this year or any year in the future. If the team waits until June they should be able to split the salary cap charges across two years, though the cap charges are contingent on the way his signing bonus works. If the signing bonus is a legit bonus then the money should count towards dead money in 2024 and 2025. If it is earned but no money ever changes hands prior to the retirement the NFL will likely just disregard the bonus. If there is money paid and the team is later paid back the Rams will take a charge in 2024 with an offsetting credit coming in 2025.”

Reading Fitzgerald’s full explanation of Donald’s contract and the retirement implications is certainly worth checking out as there are several dead money scenarios depending on what the Rams decide to do. There’s a scenario in which the Rams could also restructure the contract once again to remove some of the option bonuses, lowering his cap-hit to $14.2M.

Again, Donald’s retirement doesn’t necessarily help the Rams from a salary cap perspective as they still have to pay out his contract. They can do minor things with some of the bonuses and options that will give them a little more room to work with. As it stands, the Rams opened up $9.2M with Friday’s restructure which could help bring in another low-value free agent.