This is my second offseason post, following this one a few weeks ago: 2023 Roster Thoughts - Entering Offseason.

Cap Update

In that post, I assumed the 2023 salary cap would be $225M, as OverTheCap and Spotrac were both projecting. Two weeks after my post, it was reported that the NFL informed teams the 2023 cap will be $224.8M.

Also, one of the things I mentioned in that first post was that I assumed the need to cover incentives earned in 2022 was already accounted for in the projected rollover from 2022 of just above $2.6M. Based on something noted in Daniel Popper's most recent article, it appears that wasn't the case:

This season, according to ESPN, the Chargers are rolling over $2,620,966 in unused space from 2022. The league will then make adjustments, based on factors like incentives and bonuses, after the playoffs. The Chargers are projected to lose $600,000 in space after these adjustments.

So it appears my projection was off by about $800K. I concluded that the Chargers needed to clear about $25.5M just to get into the black, much less to sign any free agents to contracts above veteran minimum level. Now it appears they need to clear about $26.3M to get into the black.

Can the Chargers Have a Successful Offseason While Keeping Allen?

In that earlier post, I briefly commented on some possibilities to clear cap space. One of the players I mentioned there was Keenan Allen:

Allen is an obvious candidate for something. That could be an extension that lowers his 2023 cap hit substantially, or he could be traded or even released, though trading or releasing him would surprise me.

This is what I want to focus on in this post.

Let's get this out of the way. Yes, the Chargers can clear enough cap space while keeping Allen. They absolutely do not have to release or trade him to have a successful offseason.

Allen's Contract Situation

Allen is currently under contract through the 2024 season. Details:

• His cap hits are currently $21.7M in 2023 and $25.8M in 2024
• If he is released before 3/19/2023, the Chargers will take a dead 2023 cap hit of $6.9M and clear $14.8M in 2023 cap space
• If he is traded before 3/19/2023, the Chargers will take a dead 2023 cap hit of $5.4M and clear $16.3M in 2023 cap space
• I reference 3/19/2023 in those items above because he is due to be paid a $3.5M roster bonus on that date; I assume if he is on the Chargers roster on that date, they are responsible for that $3.5M 2023 cap hit in addition to what is stated above
• If he stays with the Chargers in 2023 and is released or traded before the 5th league day of the 2024 season, the Chargers will take a dead 2024 cap hit of $2.7M and clear $23.1M in 2024 cap space

The non-trivial 2023 cap challenge the Chargers currently face has led to discussion of the possiblity of releasing or trading Allen this offseason.

How Did Allen Perform in 2022?

We all know Allen had a serious hamstring injury this season that kept him out for 7 games completely and most of 9 games. He was healthy and played full-time in weeks 11-18. Here are some metrics for that period from PFF:

• Allen had 79 targets, #2 among all WRs, behind only Justin Jefferson, who had 83.
• Allen had 60 receptions, #1 among all WRs.
• Allen had 699 receiving yards, #5 among all WRs.
• Allen had 255 yards after the catch, #5 among all WRs.
• Allen had 36 receiving first downs, #3 among all WRs.
• Allen had 4 receiving TDs, tied for #3 among all WRs.
• Allen's PFF receiving grade was 83.9, #7 among all WRs who had at least 20 targets in this 8 game span.

Also, Next Gen Stats shows that Allen's Average Separation (distance in yards measured between a WR/TE and the nearest defender at the time of catch or incompletion) was 3.6, which tied for #4 among WRs. This despite the fact that he was #58 among WRs in Average Cushion (distance in yards measured between a WR/TE and the defender they’re lined up against at the time of snap on all targets).

That is elite performance, period. This indicates there is no sign of him slowing down yet.

Possible Extension?

I have posted a number of times in this forum that I think Allen will not be released or traded this offseason. The team could keep him for 2023 by standing pat with his contract, but I actually think it makes more sense to extend him.

In the comments of my first offseason post, @KyleDe asked me this question:

What sort of restructure do you think keeps Allen here, but doesn't overly leverage us from a cap perspective?

I eventually provided this:

Scenario for hypothetical cap growth:

• 2022 - $208M
• 2023 - $225M (+8.2%) - perhaps new media contract revenue offset by paying off NFLPA debt (see linked article)
• 2024 - $245M (+8.9%) - slightly larger increase due to new media contract revenue effect
• 2025 - $266M (+8.6%) - increase within typical range, tapering with distance from renegotiated media deals
• 2026 - $288M (+8.3%) - increase within typical range, tapering with distance from renegotiated media deals
• 2027 - $310M (+8.0%) - increase within typical range, tapering with distance from renegotiated media deals

Allen's current remaining cap hits:

• 2023 - $15.5M salary, $2.7M signing bonus (from 2020), $3.5M roster bonus = $21.7M (9.6% of notional 2023 cap figure above)
• 2024 - $18.1M salary, $2.7M signing bonus (from 2020), $5M roster bonus = $25.8M (10.5% of notional 2023 cap figure above)

Scenario for hypothetical restructure/extension for Allen's contract:

• Contract parameters:
  • 3 year extension
  • $70M increased value
  • $35M bonus payable now
    • $12.5M signing bonus
    • $12.5M in 2023 salary converted to restructure bonus
    • $12.5M in 2024 salary converted to restructure bonus
• $52.1M guaranteed
  • $35M bonus outlined above
  • 2023 and 2024 salary = $8.6M
  • 2023 and 2024 roster bonuses = $8.5M
• 2023 - $3M salary, $2.7M signing bonus (from 2020 extension), $2.5M signing bonus (from 2023 extension), $2.5M restructure bonus (from 2023 salary conversion), $2.5M restructure bonus (from 2024 salary conversion), $3.5M roster bonus (paid 3/19/2023) = $16.7M (7.4% of notional 2023 cap figure above)
  • Saves $5M against 2023 cap
• 2024 - $5.6M salary, $2.7M signing bonus (from 2020 extension), $2.5M signing bonus (from 2023 extension), $2.5M restructure bonus (from 2023 salary conversion), $2.5M restructure bonus (from 2024 salary conversion), $5M roster bonus (paid 5th league day 2024) = $20.8M (8.5% of notional 2024 cap figure above)
  • Saves $5M against 2024 cap
  • $22.5M dead cap if released after 2024 season
• 2025 - $10.5M salary, $2.5M signing bonus (from 2023 extension), $2.5M restructure bonus (from 2023 salary conversion), $2.5M restructure bonus (from 2024 salary conversion), $5M roster bonus (paid 5th league day 2025) = $23M (8.6% of notional 2025 cap figure above)
  • $15M dead cap if released after 2025 season
• 2026 - $13.5M salary, $2.5M signing bonus (from 2023 extension), $2.5M restructure bonus (from 2023 salary conversion), $2.5M restructure bonus (from 2024 salary conversion), $5M roster bonus (paid 5th league day 2026) = $26M (9.0% of notional 2025 cap figure above)
  • $7.5M dead cap if released after 2026 season; but, if he is still playing well enough, opportunity for another extension here
• 2027 - $18.5M salary, $2.5M signing bonus (from 2023 extension), $2.5M restructure bonus (from 2023 salary conversion), $2.5M restructure bonus (from 2024 salary conversion), $5M roster bonus (paid 5th league day 2027) = $31M (10.0% of notional 2025 cap figure above)

Why would Allen do this now?

• He gets paid $35M up front
• He gets another $17.1M guaranteed; in particular, his 2023 and 2024 salaries and roster bonuses are guaranteed, whereas those are currently at risk if he is released as a cap casualty (salary, roster bonus)
• He likely also gets 2025 effectively guaranteed, since it would cost $22.5M in dead cap to release him after the 2024 season
• It means he plays the next 3-5 seasons with Herbert as his QB
• This goes a long way toward guaranteeing he retires as a Charger, if he cares about that

Why would the Chargers do this now?

• Allen is still a critical member of the Chargers offense, and his skill set should age reasonably well if he remains healthy
• Reduces Allen's cap hit for 2023 and 2024
• Secures Allen at reasonable cap hits (8.65%, 9%, 10%) in 2025-2027
  • Consider that Allen's cap percentage in 2022 was 9.2%
  • This is what I meant when I referenced that cap percentage is more important than dollars
• Reasonable cap hit to get out after 2026 if needed
• It means he is there as a primary target for Herbert for the next 3-5 seasons
• It goes a long way toward guaranteeing he retires as a Charger, which I think the team values

This is similar to the approach the Cardinals took with Larry Fitzgerald. I don't think they regret that.

Obviously, that was just an example. There are many permutations that could also make sense that would differ from this one... but IMO this one illustrates that it is possible to extend him while both clearing 2023 cap space and not unreasonably committing to future season cap hits for Allen.

Favorable Comparison to Larry Fitzgerald

I mentioned Fitzgerald for a few reasons:

• Like Allen, he is a receiver who didn't excel solely because of speed or athleticism, so they may age similarly.
• Like Allen in my scenario, he is a receiver who played his entire career for a single franchise.
• Like Allen in my scenario, he played into his mid-30s.

If the Chargers gave Allen an extension like what I suggested above, that would put him under contract for his age 31-35 seasons (2023-2027). Here is a comparison of how Allen's cap hits during that time would compare to Fitzgerald's in the same age seasons (2014-2018 for Fitz), assuming the cap growth I threw out in my scenario above:

2014 - 6.33% (vs. 7.4% for Allen in 2023 in my hypothetical)

2015 - 7.31% (vs. 8.5% for Allen in 2024 in my hypothetical)

2016 - 9.97% (vs. 8.6% for Allen in 2025 in my hypothetical)

2017 - 9.22% (vs. 9.0% for Allen in 2026 in my hypothetical)

2018 - 9.42% (vs. 10.0% for Allen in 2027 in my hypothetical)

Average - 8.45% (vs. 8.7% for Allen in my hypothetical)

Like I said above, I don't think the Cardinals regret keeping Fitzgerald. If the Chargers keep Allen as a career-long Charger, I don't think they will regret that, either.

In my hypothetical extension, Allen probably wouldn't end up playing out that final 2027 season. If his skills decline, the team could cut him before that. If not, they could extend him again and rework his 2027 contract year. Either way, that would likely reduce his 2027 cap hit, which would likely eliminate the small gap in cap percentage in this comparison.

Conclusion

I really don't view extending Allen as a particularly risky choice. If I can take Telesco at face value when he answered Popper's question about it, I would say it is one of the few times that I have agreed with him 100%.

Popper just wrote an article published today that basically says it is likely the Chargers will either release or trade Allen: Chargers have a Keenan Allen decision as they face salary-cap crunch.

I highly respect Popper and his sources, so I don't take this lightly. I hope it isn't true, and I know it doesn't have to be true. So I'm sticking with my take that he should and will be kept and will likely be extended.

Thoughts?