Jordan Reed signed a five-year extension with Washington reportedly worth a stated value of $48,389,750, of which $46.75 million is considered “new money” and $14 million is guaranteed at the time of signing. The Expected Contract Value of the deal is $30,118,560 (62% of the stated value):
With the league offices closing for today, it also closes out the addition of compensatory free agents (CFAs) into the formula for the 2017 NFL Draft. Note that while last year this cutoff date was May 12, it is my belief that from now on the cutoff date will be the second Tuesday after the NFL Draft, as there are several mentions of May 10 in the official free agency press release. With the full slate of potential qualifying CFAs now known, it’s time to take a look at the list that’s emerged.
Cordy Glenn signed a five-year contract with the Bills that replaces his franchise tag and is reportedly worth a stated value of $36,000,000, of which $36 million is guaranteed at the time of signing. The Expected Contract Value of the deal is $52,362,561 (87% of the stated value):
Terron Armstead signed a five year extension with the Saints worth a reported stated value of $66,671,000 over six seasons, of which $65 million is considered “new money” and $20.88 million is guaranteed at the time of signing. The Expected Contract Value of the deal is $52,605,849 (79% of the stated value):
The draft represents an avenue for NFL teams to acquire talent at a fixed price below the market value of similarly talented free agents. Drafting effectively is imperative for success, as no team can afford to pay the free agent market price for all 53 players on the roster. Teams who draft effectively are potentially able to release veteran players with large contracts, thereby freeing up cap space to reallocate to positions where no recently drafted player is prepared to fill a need in the roster. The draft decisions made in the early rounds of the 2016 draft may therefore have an impact on contract termination decisions made during 2016 training camp and the 2017 offseason. I have identified below a number of such draft picks and the veterans potentially affected by their selection, accompanied by the relevant Expected Contract Value calculations.
Each offseason a number of players agree to simple restructures of their contracts designed to free up cap room for their respective teams in the present year. These cap-driven restructures involve converting base salary (or roster bonus) to signing bonus, with the converted amount then prorated over the remaining years on the contract (up to a maximum of five years). These restructures only involve changing the nature of contract payments, as opposed to the amount of those payments, and are therefore distinguished from pay cuts, raises or extensions. There is clearly no downside to the player agreeing to do this, as he immediately receives money scheduled for payment more than six months in the future (and which is often not guaranteed). But what may be overlooked is that these cap-driven restructures typically increase expected earnings in future seasons without in any way changing the payment terms in those future season.
Last week, I released Episode #8 of The Zack Moore Show podcast and covered the Eagles 3 QB strategy after the trade for the #2 pick in the first round, which was actually something I’d brought up in my first draft of an Eagles chapter that I’m writing for Caponomics: Moneyball Thinking for the NFL. I see the Doug Pederson Era as an extension of the principles of the Andy Reid Era, which saw the Eagles make the NFC Championship five times in 14 seasons and average just better than 9-7 over the course of those seasons.