A Closer Look at Marcus Gilbert’s Contract Extension

I usually try to take a little deeper look at the contracts on the site and wanted to do the same with the contract of Steelers tackle Marcus Gilbert since I had a few questions about him. I think the prevailing analysis is that he received $6 million a year in new money which places him in a logjam for fourth highest compensated right tackle in the NFL. But when you look closer at the numbers I think a strong case can be made that in a true contract valuation Gilbert is going to be the highest paid right tackle in the league.

There are two considerations that should come into valuing a contract. The first is the yearly cash flow component that shows the was that the salary is actually distributed. Is it a heavily front loaded contract?  Is it backloaded?  Is it a steady stream of salary?

The following table provides the cumulative money that each player will earn over the course of his contract. Each cell is color coded to indicate the likelihood of the money being earned. Green means its essentially guaranteed, yellow is a year where it is probably 50/50 that it is earned, and red means don’t start counting that money until you get that far into the contract.

Right Tackle Market

The first thing that jumps out to me is how strong the frontside of Gilbert’s contract is. Only Cherilus will earn more in year one, but over the first two and three years of the contract no player will earn more than Gilbert, despite the fact that Cherilus, Loadholt, and Davis all earn more on an annual basis.

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Gilbert actually received a higher signing bonus than everyone on the list except Cherilus, though Loadholt’s signing bonus is effectively more since he signed for four years rather than five. Because of that his contract is as well protected as almost anyone else on the list.  The exceptions are Cherilus and Howard, and in both cases the protections they received may have been a team error. In the case of the Oakland Raiders it was clearly an error (they paid Howard a roster bonus too soon which turned it into a signing bonus). The Colts got hit with a little known rule called the 50% rule that turned Cherilus’ signing bonus from $10 million to $14.5 million for accounting purposes. I tend to think Indianapolis simply did not pay attention to the rule but that is just a baseless opinion.

All things considered I think you can make a strong case that Gilbert received either the best or second best contract at the position based on expected earnings. Does that make it a bad contract for the team?  I guess it depends on your perspective. Gilbert is the second youngest of the group to sign so there is a greater upside for him to perform well.  His deal also reflects the large cap increase that was not in play when Cherilus, Davis, and Loadholt signed.

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Negatively the contract did not offer anywhere near the protections that the 49ers insisted on received from Davis.  It did not have the no bonus provision of the Collins contract, which was also supposed to be the structure of the Howard contract.  So I do think it’s fair to say the Steelers could have asked for more concessions considering he and Davis are the only players under a true extension where the teams held contractual leverage over the player at the time of signing.

I don’t think that the $6 million a year figure is necessarily too high, which is something I have read in a few spots. While he doesn’t have a huge track record and has never stood out in Pro Football Focus the way others have, he is a logical comparison to other limited sample players like Collins and Howard who both earned $6 million a year as free agents. As a 2nd rounder he also carries much more cache than the other two which will play a role.

The Steelers were not going to be able to lowball him into a $4 million  per year contract. For that to eventually happen they would have had to wait out the year, a portion of free agency, and kept crossing their fingers that nobody bites. Again seeing what Howard received on the market it’s unrealistic to think he could have gotten that much less.  So while they may have been able to work within the $6 million per year parameters more effectively coming in far under that dollar figure was never going to happen.

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  • Ben Anderson

    Given that you seem to be bundling Gilbert’s 2014 ($7.65M sb + $650K base) and 2015 ($3.5M option bonus + $1.9M base + $50K workout bonus) compensation into “Year 1”, I see some possible flaws in your logic.

    • Ben Anderson

      I also have no idea how you came up with a total of $12.934M using those considerations. His total cash comp for 2014 is $8.3M. His total cash comp for 2015 will be as much as $5.45M, but none of that 2015 comp is guaranteed money.

      • When you calculate the cash flows in a contract extension its based on new money. For Gilbert his extension kicks in in 2015, which is year one of his new cash flow. To come to that figure you add his 2014 and 2015 salaries and subtract out of that the money he was going to earn in 2014 had he played his contact out. For Gilbert the Steelers will be paying him $12.934M in new money by the end of his first extension year.

        While the cash may not be guaranteed on paper that money is all but guaranteed. The salary cap cost to release the player is high enough to where the team wouldnt even give it consideration. Its not really until 2017 where most teams would begin to consider releasing him an option.

        • Ben Anderson

          I see. So, you’re extracting the new money paid out by the end of the 1st year of 5 that is, as a practical matter, guaranteed and then deducting the original base of $816K from that amount. Thank you for the clarification.
          I don’t think they would. But, they can release him in 2015 and create $860K in cap space by simply not paying his roster bonus. It is a big dead money hit to take though and he seems to be playing pretty well.