Contract restructurings have been on the rise since the lockout ended because there has been minimal growth in the cap. With the salary cap expected to only increase from $120.6 million to $122 million this year, there could be plenty of restructurings before the 2013 league year begins on March 12 when all teams must be under the cap.
A contract restructuring is different from a pay cut. In a typical restructuring, a player will convert some portion of his base salary or roster bonus (without reducing salary) into a signing bonus because it can be prorated or spread out evenly over the life of a contract (most other salary components usually can’t be prorated) for a maximum of five years. The team gets a lower cap number in the current season while the player gains more short-term security and potentially a better payment schedule in the current year of his contract. The player’s cap numbers in the remaining contract years also increase, which can make him more susceptible to becoming a cap casualty in the future.