Call him the New Orleans Saints’ salary cap guru, wizard, maven, whatever you like: Khai Harley has earned a ton of credit for changing how teams circumvent the NFL’s spending rules to maximize their resources. Now entering his 14th year with New Orleans, the Saints’ vice president of football administration has been their secret weapon.
His bio on the official team website lists his responsibilities as working, “in conjunction with the player personnel department, making player acquisitions fit within the salary cap structure,” as well as, “contract negotiations, coordinating different areas of football operations, roster management and other administrative functions of running the club.”
He’s the one who has popularized contract restructures across the NFL, empowered by general manager Mickey Loomis to navigate the complicated language in the league’s Collective Bargaining Agreement. Remember, these are not pay cuts. It’s a conversion of a player’s base salary (well, most of it, typically up to the NFL-required minimum) into a signing bonus that is prorated over the years remaining on that contract. The player gets his money immediately, while the team doesn’t have to pay the bill until later. Both sides win so long as the team’s owner is fine with writing more checks and the player remains healthy and productive.
To be clear, Harley didn’t invent that maneuver: Tom Brady memorably agreed to a contract restructure in 2007 to facilitate the New England Patriots’ trade for superstar wide receiver Randy Moss. What Harley did innovate was the use of automatically voided years, or “ghost years” as fans have termed them. Teams have included options in contracts for decades, usually triggered on, say, the third or fifth day of the league’s fiscal year, and some players had void years written into their deals based on performance (C.J. Spiller and Curtis Lofton each had this clause), but the idea of a ghost year wasn’t really a thing until Harley began writing them into contracts with Brees, Dannell Ellerbe, and Nick Fairley in 2016. Philadelphia Eagles executive vice president/general manager Howie Roseman has garnered a reputation for also using void years with abandon, but he didn’t pick up the trend until 2017 in deals with Nick Foles and Chris Long.
Ghost years allow teams to create more money out of nothing in the short term. For example, an $8 million signing bonus on a four-year deal would result in a prorated $2 million cap charge in each year (in addition to any salary guarantees). But if the last two years void automatically, the team would end up paying $4 million in “dead money” in the third year once the deal expired. The risk in restructuring an existing contract is that future cap hits (and potentially dead money owed) rise, despite the immediate savings.
Restructures, often with void years attached, have since become common operating procedure across the NFL, with Over The Cap’s Jason Fitzgerald found that nearly 55% of NFL teams completed a contract restructure at some point this offseason, with 37% of teams moving more than $6.5 million in restructured deals. And an even smaller number of rogue teams (roughly 20%), the Saints among them, moved $15 million or more.
For years restructuring contracts was seen as a perilous tool most often reserved for no-doubt quarterbacks like Brady and Ben Roethlisberger. Risk-averse, old-school executives like ex-Green Bay Packers vice president of finance Andrew Brandt continue to publicly rail against using them. Now more than half the league is using salary cap management techniques that Harley pioneered, most recently the Los Angeles Rams (who restructured their contract with right tackle Rob Havenstein on Saturday to write in two voidable years, creating more than $3 million in badly-needed cap space).
How do they compare? Hired in Feb. 1999, Brandt fulfilled the same role in Green Bay that Harley has had with the Saints until he resigned in Jan. 2008. The Brett Favre-led Packers teams he helped build went a combined 86-58 in the regular season (.597) and 3-5 in postseason play; since being promoted to his current post in 2013, Harley’s mostly-Drew Brees-quarterbacked Saints have gone 84-49 (.632) with a 3-4 postseason record in nearly the same timespan, though this season’s results are obviously pending. The Saints would need to finish at 5-12 or worse this season to achieve a lower win percentage than Brandt’s Packers did.
So while there’s a clear philosophical difference at work, it’s tough to say one path is obviously superior to the other. Fitzgerald also found that while some modest restructured contracts can lead to a higher winning percentage, there is a threshold of diminishing returns — teams that moved too much money around, leaving dead money cap hits left on the books once some players were released or retired, had less success as time wore on. Which makes sense. The idea is to have as many resources to work with as possible, not to hamstring yourself.
But restructures weren’t always this prevalent. In 2013, Harley’s first on the job in his current capacity, the Saints rapidly restructured their contracts with mainstays like Jahri Evans, Ben Grubbs, Roman Harper, Marques Colston, and David Hawthorne. That not only got them under the salary cap, it opened up enough cap space for the Saints to bring in free agents like Keenan Lewis and Benjamin Watson.
This new flexibility also allowed the Saints to makes moves that (at the time!) were highly lauded like extending Junior Galette and Jimmy Graham, plus bringing in Jairus Byrd and Spiller in subsequent offseasons. And Harley’s methods are continuing to evolve. He helped hammer out contract extensions with both of the team’s 2017 first round picks this year, inking Ryan Ramczyk and Marshon Lattimore to long-term deals and designing their contracts with restructures in mind for 2022 (when the Saints are already projected to be over the cap ceiling). Lattimore’s $27.4 million cap hit ranks highest on the team, while Ramczyk’s $22.8 million cap hit is third-most. Restructuring both players yields a combined $32.7 million in savings.
Clearly some of those decisions returned a better investment than others. But that isn’t the point. The lesson the Saints took away from this new strategy was that so long as the salary cap continued to rise (and as it will in 2023, once new broadcasting rights deals flush tens of millions of dollars into teams’ coffers) they could continue to be competitive in free agency by restructuring contracts of cornerstone players. There’s some red in the ledger here and there, but on the whole the approach paid off.
It may have paid off too well. Only the Kansas City Chiefs have won more games over the last five years. Just five teams have won more games over the last decade. It’s done a lot to raise his profile. Harley was nearly spirited away with Terry Fontenot when he took the Atlanta Falcons general manager job, but the Saints were able to retain him while bringing in a potential replacement, Tosan Eyetsemitan, who previously worked in the Cleveland Browns pro personnel department and, like Harley, has a background in financial analysis.
Eyetsemitan and Harley are the only members of the front office assigned to the football administration department. When Harley gets his own general manager position someday — and it sure feels like a “when” issue, not “if” — the Saints want to have someone with his skills set ready to step up.
Maybe someday Harley will have his own “coaching tree” growing in the league, branching out to different franchises and continuing to find creative solutions to NFL number-crunching. With the salary cap going to the moon, there will be plenty of slices of the pie to go around. It’s up to Harley and visionaries like him to carve it up.