Expected Contract Value: Quarterback Contract Comparison

Expected Contract Value:  Quarterback Contract Comparison

As a result of the contract extensions signed by Cam Newton and Ryan Tannehill, as well as the ongoing discussion related to the contract negotiations of Russell Wilson, many NFL commentators have recently engaged in an exercise of contract comparison with respect to the largest quarterback contracts signed over the past several years. In terms of methodology, the usual suspects have been well represented: total stated contract amount, average annual value, fully guaranteed money, and three-year payout. But as I have previously explained, none of these metrics are adequate for valuing or comparing contracts.

Expected Contract Value can be used for more accurate contract comparison. As a refresher, the methodology is explained here. Below, I have listed the largest Expected Contract Value totals for quarterback contracts signed following the lockout. Farther down, I have displayed the forecasted likelihoods and the calculations for each contract. As you can see, there isn’t a particularly strong correlation between average annual value and Expected Contract Value, or between fully guaranteed money and Expected Contract Value. A contract’s stated value appears to say the most about its Expected Contract Value, but the hierarchy is still different, and the actual amounts are certainly misleading.

Some have also attempted to incorporate salary cap inflation into the contract comparison analysis, most often by stating the given contract’s average annual value as a percentage of the per-team NFL salary cap of the league year in which the contract was signed. I do not find this to be particularly relevant. First, average annual value assumes that all contract money is equally likely to be earned, and therefore fails to discount for the fact that money in later years of a contract (which often consists of larger salaries) is less likely to be earned than money in earlier years of a contract. Second, the NFL salary cap of a given league year should only be relevant with respect to the money actually earned by a player during that league year. Therefore, we do not need to adjust the average annual value of the contract to account for inflation. Instead, we only need to adjust the payments made to the player in prior league years to translate the contract into 2015 league year dollars. As a result, I have included in the individual charts calculations to adjust pre-2015 payments, and immediately below I show the ranking of inflation-adjusted Expected Contract Value totals.
The numbers are calculated based on the contracts as originally signed, not as they currently stand. For example, the fact that Tony Romo converted base salary into signing bonus in 2014 and 2015 is not considered.   With respect to option bonuses and guaranteed base salary that is not fully guaranteed at signing, the numbers are calculated based on the opportunity that the team has to release the player prior to making the payment or fully guaranteeing the salary. But in subsequent years, the numbers are calculated based on the fact that the amount would have already been paid or guaranteed.

For example, Joe Flacco’s 2014 Save:Avg and Save:Cap are calculated prior to his option bonus being paid, but his 2015 Save:Avg and Save:Cap are calculated subsequent to his option bonus being paid. Alex Smith’s 2015 Save:Avg and Save:Cap are calculated prior to the 2015 base salary becoming fully guaranteed, but his 2016 Save:Avg and Save:Cap are calculated subsequent to the 2016 base salary becoming fully guaranteed, as the guarantee was triggered in 2015.

Some may take exception at the very low probabilities associated with certain contract years of the older quarterbacks (“Only a 7.8% likelihood that Peyton Manning plays out the 2015 season of this contract!”). Please keep in mind that the reason Peyton Manning and Tom Brady have had special careers is because they are the exception to most rules. While they should be celebrated for this, no projection system can be programmed to spot exceptions to rules. They have broken many records precisely because they have survived attrition and randomness and regression to the mean to a greater extent than is reasonable.

On the average, older players lose skill and get injured and choose to retire with greater frequency than younger players. And given that Peyton Manning had just missed an entire season with a serious neck injury at the time he signed his contract, placing an almost 10% likelihood on him playing for $20 million four seasons later actually sounds pretty reasonable. This neck injury is not considered in Expected Contract Value, but it illustrates the types of things that are indirectly included in Expected Contract Value through the 1,000+ inputs.Having said that, I have acknowledged in the past that Expected Contract Value undersells quarterback contracts for premier starters due to positional scarcity and the demonstrably different aging curve that the position enjoys relative to all other non-kicker positions. However, even if quarterback contracts result in Expected Contract Value totals that are smaller than would be accurate relative to other positions, such underestimation is applied equally within the position. As a result, I still think that it is fair to compare quarterback contracts using Expected Contract Value.

QB Expected Contract Value

PlayerStated ValueRankAAVRankFull GuaranteeRankExpected Contract Value
Newton$103,800,0006$20,760,0003$41,000,0004$89,631,502
Rodgers$110,000,0004$22,000,0001$56,750,0001$81,831,100
Flacco$120,600,0002$20,100,0005$29,000,00011$80,829,399
Ryan$103,750,0007$20,750,0004$42,000,0002$71,796,000
Kaepernick$114,000,0003$19,000,0009$12,973,76616$68,984,666
Cutler$126,700,0001$18,100,00010$38,000,0007$63,230,000
Dalton$96,000,0009$16,000,00014$17,000,00015$59,965,097
Romo$108,000,0005$18,000,00011$40,000,0005$59,756,000
Brees$100,000,0008$20,000,0006$40,000,0005$59,474,000
Stafford$53,000,00016$17,666,66712$41,500,0003$59,367,000
Ben R.$87,400,00011$21,850,0002$31,000,00010$58,036,250
Tannehill$77,000,00013$19,250,0007$21,500,00012$55,558,237
Smith$68,000,00014$17,000,00013$19,000,00013$47,221,900
Vick$80,000,00012$16,000,00014$32,500,0009$46,817,000
Brady$57,000,00015$11,400,00016$33,000,0008$37,857,000
Manning$96,000,0009$19,200,0008$18,000,00014$37,431,000

Inflation Adjusted ECV

PlayerExpected Contract ValueRankInflation Adjusted ECV
Newton$89,631,5021$89,631,502
Rodgers$81,831,1002$88,980,895
Flacco$80,829,3993$87,328,320
Ryan$71,796,0004$77,650,750
Kaepernick$68,984,6665$70,060,492
Brees$59,474,0009$68,899,849
Romo$59,756,0008$65,168,000
Cutler$63,230,0006$64,962,500
Stafford$59,367,00010$64,718,500
Dalton$59,965,0977$61,357,303
Roethlisberger$58,036,25011$58,036,250
Tannehill$55,558,23712$55,558,237
Vick$46,817,00014$54,610,963
Smith$47,221,90013$48,684,900
Brady$37,857,00015$43,126,000
Manning$37,431,00016$42,774,760

Year by Year QB Breakdowns

Cam Newton
YearSalaryExpected OutcomeExpected ValueAdjustment
201599.9%$31,000,000
2016$13,000,00097.2%$12,636,000$10,000,000
2017$13,666,00089.7%$12,258,402
2018$15,000,00071.0%$10,650,000
2019$16,700,00047.6%$7,949,200
2020$19,100,00026.9%$5,137,900
Subtotal$48,631,502$41,000,000
Total$89,631,502
 
YearExpected Contract ValueInflationAdjusted ECV
2015$31,000,000$31,000,000
2016$22,636,000$22,636,000
2017$12,258,402$12,258,402
2018$10,650,000$10,650,000
2019$7,949,200$7,949,200
2020$5,137,900$5,137,900
Total:$89,631,502
Ryan Tannehill
YearSalaryExpected OutcomeExpected ValueAdjustment
201599.9%$12.160,000
201698.0%$9,340,000
2017$18,000,00079.2%$14,256,000
2018$17,500,00049.5%$8,662,500
2019$18,750,00038.9%$7,293,750
2020$19,522,52319.7%$3,845,987
Subtotal$34,058,237$21,500,000
Total$55,558,237
 
YearExpected Contract ValueInflationAdjusted ECV
2015$12.160,000$12.160,000
2016$9,340,000$9,340,000
2017$14,256,000$14,256,000
2018$8,662,500$8,662,500
2019$7,293,750$7,293,750
2020$3,845,987$3,845,987
Total:$55,558,237
Ben Roethlisberger
YearSalaryExpected OutcomeExpected ValueAdjustment
2015$4,250,00097.3%$4,135,250$31,000,000
2016$17,750,00070.0%$12,425,000
2017$12,000,00049.9%$5,988,000
2018$17,000,00017.3%$2,941,000
2019$17,000,0009.1%$1,547,000
Subtotal$27,036,250$31,000,000
Total$58,036,250
 
YearExpected Contract ValueInflationAdjusted ECV
2015$37,135,250$37,135,250
2016$12,425,000$12,425,000
2017$5,988,000$5,988,000
2018$2,941,000$2,941,000
2019$1,547,000$1,547,000
Total:$58,036,250
Alex Smith
YearSalaryExpected OutcomeExpected ValueAdjustment
201499.7%$19,000,000
2015$12,000,00081.2%$9,744,000
2016$14,200,00086.5%$12,283,000
2017$13,300,00028.3%$3,763,900
2018$17,000,00014.3%$2,431,000
Subtotal$28,221,900$19,000,000
Total$47,221,900
 
YearExpected Contract ValueInflationAdjusted ECV
2014$19,000,000107.7%$20,463,000
2015$9,744,000$9,744,000
2016$12,283,000$12,283,000
2017$3,763,900$3,763,900
2018$2,431,000$2,431,000
Total:$48,684,900
Andy Dalton
YearSalaryExpected OutcomeExpected ValueAdjustment
2014$1,086,02799.5%$1,080,597$17,000,000
2015$7,200,00095.4%$6,868,800
2016$10,700,00084.8%$9,073,600
2017$13,300,00067.3%$8,950,900
2018$13,900,00058.6%$8,145,400
2019$16,200,00034.5%$5,589,000
2020$17,700,00018.4%$3,256,800
Subtotal$42,965,097$17,000,000
Total$59,965,097
 
YearExpected Contract ValueInflationAdjusted ECV
2014$18,080,597107.7%$19,472,803
2015$6,868,800$6,868,800
2016$9,073,600$9,073,600
2017$8,950,900$8,950,900
2018$8,145,400$8,145,400
2019$5,589,000$5,589,000
2020$3,256,800$3,256,800
Total:$61,357,303
Colin Kaepernick
YearSalaryExpected OutcomeExpected ValueAdjustment
2014$100,00099.8%$998,000$12,973,766
2015$12,800,00092.5%$11,840,000
2016$14,300,00082.2%$11,754,600
2017$16,900,00064.9%$10,968,100
2018$17,400,00057.2%$9,952,800
2019$19,200,00034.5%$6,624,000
2020$21,400,00018.1%$3,873,400
Subtotal$56,010,900$12,973,766
Total$68,984,666
 
YearExpected Contract ValueInflationAdjusted ECV
2014$13,971,766107.7%$15,047,592
2015$11,840,000$11,840,000
2016$11,754,600$11,754,600
2017$10,968,100$10,968,100
2018$9,952,800$9,952,800
2019$6,624,000$6,624,000
2020$3,873,400$3,873,400
Total:$70,060,492
Jay Cutler
YearSalaryExpected OutcomeExpected ValueAdjustment
201499.4%$22,500,000
201594.2%$15,500,000
2016$16,000,00080.1%$12,816,000
2017$15,000,00031.7%$4,755,000
2018$16,000,00025.8%$4,128,000
2019$20,000,00011.8%$2,360,000
2020$21,700,0005.4%$1,171,800
Subtotal$25,230,000$38,000,000
Total$63,230,000
 
YearExpected Contract ValueInflationAdjusted ECV
2014$22,500,000107.7%$24,232,500
2015$15,500,000$15,500,000
2016$12,816,000$12,816,000
2017$4,755,000$4,755,000
2018$4,128,000$4,128,000
2019$2,360,000$2,360,000
2020$1,171,800$1,171,800
Total:$64,962,500
Matt Ryan
YearSalaryExpected OutcomeExpected ValueAdjustment
201399.6%$30,000,000
2014$21,500,00094.0%$11,750,000
2015$11,500,00094.7%$10,890,500
2016$15,750,00061.7%$9,717,750
2017$15,750,00037.8%$5,953,500
2018$19,250,00018.1%$3,484,250
Subtotal$41,796,000$30,000,000
Total$71,796,000
 
YearExpected Contract ValueInflationAdjusted ECV
2013$30,000,000116.5%$34,950,000
2014$11,750,000107.7%$12,654,750
2015$10,890,500$10,890,500
2016$9,717,750$9,717,750
2017$5,953,500$5,953,500
2018$3,484,250$3,484,250
Total:$77,650,750
Matthew Stafford
YearSalaryExpected OutcomeExpected ValueAdjustment
2013100.0%$31,500,000
201499.7%$2,000,000
2015$1,500,00096.1%$1,441,500$8,000,000
2016$17,000,00057.7%$9,809,000
2017$16,500,00040.1%$6,616,500
Subtotal$17,867,000$41,500,000
Total$59,367,000
 
YearExpected Contract ValueInflationAdjusted ECV
2013$31,500,000116.5%$36,697,500
2014$2,000,000107.7%$2,154,000
2015$9,441,500$9,441,500
2016$9,809,000$9,809,000
2017$6,616,500$6,616,500
Total:$64,718,500
Aaron Rodgers
YearSalaryExpected OutcomeExpected ValueAdjustment
2013$500,000100.0%$500,000$37,750,000
2014$1,400,00099.3%$1,390,200$9,500,000
2015$2,100,00094.1%$1,976,100$9,500,000
2016$12,600,00064.4%$8,114,400
2017$13,650,00048.2%$6,579,300
2018$20,900,00020.5%$4,284,500
2019$21,100,00010.6%$2,236,600
Subtotal$25,081,100$56,750,000
Total$81,831,100
 
YearExpected Contract ValueInflationAdjusted ECV
2013$38,250,000116.5%$44,561,250
2014$10,890,200107.7%$11,728,745
2015$11,476,100$11,476,100
2016$8,114,400$8,114,400
2017$6,579,300$6,579,300
2018$4,284,500$4,284,500
2019$2,236,600$2,236,600
Total:$88,980,895
Tom Brady
YearSalaryExpected OutcomeExpected ValueAdjustment
201399.5%$31,000,000
201492.3%$2,000,000
2015$8,000,00041.5%$3,320,000
2016$9,000,00012.3%$1,107,000
2017$10,000,0004.3%$430,000
Subtotal$4,857,000$33,000,000
Total$37,857,000
 
YearExpected Contract ValueInflationAdjusted ECV
2013$31,000,000116.5%$36,115,000
2014$2,000,000107.7%$2,154,000
2015$3,320,000$3,320,000
2016$1,107,000$1,107,000
2017$430,000$430,000
Total:$43,126,000
Tony Romo
YearSalaryExpected OutcomeExpected ValueAdjustment
201399.5%$26,500,000
201489.0%$13,500,000
2015$17,000,00064.4%$10,948,000
2016$8,500,00042.4%$3,604,000
2017$14,000,00021.6%$3,024,000
2018$19,500,0007.5%$1,462,500
2019$20,500,0003.5%$717,500
Subtotal$19,756,000$40,000,000
Total$59,756,000
 
YearExpected Contract ValueInflationAdjusted ECV
2013$26,500,000116.5%$30,872,500
2014$13,500,000107.7%$14,539,500
2015$10,948,000$10,948,000
2016$3,604,000$3,604,000
2017$3,024,000$3,024,000
2018$1,462,500$1,462,500
2019$717,500$717,500
Total:$65,168,000
Joe Flacco
YearSalaryExpected OutcomeExpected ValueAdjustment
2013$1,000,00099.9%$999,000$29,000,000
2014$21,000,00095.8%$20,118,000
2015$11,000,00090.9%$9,999,999
2016$18,000,00059.8%$10,764,000
2017$20,600,00031.4%$6,468,400
2018$20,000,00017.4%$3,480,000
Subtotal$51,829,399$29,000,000
Total$80,829,399
 
YearExpected Contract ValueInflationAdjusted ECV
2013$29,999,000116.5%$34,948,835
2014$20,118,000107.7%$21,667,086
2015$9,999,999$9,999,999
2016$10,764,000$10,764,000
2017$6,468,400$6,468,400
2018$3,480,000$3,480,000
Total:$87,328,320
Drew Brees
YearSalaryExpected OutcomeExpected ValueAdjustment
201299.5%$40,000,000
2013$10,000,00086.4%$8,640,000
2014$11,000,00056.7%$6,237,000
2015$19,000,00016.3%$3,097,000
2016$20,000,0007.5%$1,500,000
Subtotal$19,474,000$40,000,000
Total$59,474,000
 
YearExpected Contract ValueInflationAdjusted ECV
2012$40,000,000118.8%$47,520,000
2013$8,640,000116.5%$10,065,600
2014$6,237,000107.7%$6,717,249
2015$3,097,000$3,097,000
2016$1,500,000$1,500,000
Total$68,899,849
Peyton Manning
YearSalaryExpected OutcomeExpected ValueAdjustment
201288.0%$18,000,000
2013$20,000,00035.4%$7,080,000
2014$20,000,00051.4%$10,280,000
2015$19,000,0007.8%$1,482,000
2016$19,000,0003.1%$589,000
Subtotal$19,431,000$18,000,000
Total$37,431,000
 
YearExpected Contract ValueInflationAdjusted ECV
2012$18,000,000118.8%$21,384,000
2013$7,080,000116.5%$8,248,200
201410,280,000107.7%$11,071,560
2015$1,482,000$1,482,000
2016$589,000$589,000
Total:$42,774,760
Michael Vick
YearSalaryExpected OutcomeExpected ValueAdjustment
201199.4%$20,000,000
201293.9%$12,500,000
2013$16,500,00047.1%$7,771,500
2014$15,500,00023.6%$3,658,000
2015$16,500,00017.5%$2,887,500
Subtotal$14,317,000$32,500,000
Total$46,817,000
 
YearExpected Contract ValueInflationAdjusted ECV
2011$20,000,000119.4%$23,880,000
2012$12,500,000118.8%$14,850,000
2013$7,771,500116.5%$9,053,797
2014$3,658,000107.7%$3,939,666
2015$2,887,500$2,887,500
Total:$54,610,963
  • McGeorge

    Bryce,
    I agree with your analysis but there is one thing I ask you to consider – replacement level QBs. There is a large cost in acquring a new QB.
    Since 2006 (210 years) how many good QBs have been drafted? How many Ok/average/Tier 2 QBs?

    There is a QB shortage, so it may be worth over paying Cam Newton or Ryan Tannehill, because the alternative is:
    1 – play a bad /terrible QB who costs games, and has a negative value
    2 – the team has to invest a series of draft picks hunting for a replacement, many of which are busts
    3 – the team has to spend 1-3 years on each QB, to see how they work out. It can take 5 years to find a Tier 2 QB. Some teams haven’t found one after 10 years of trying.

    It’s better to overpay Ryan Tannehill 20MM, than to play Matt Moor, and use up several 1st and 2nd round picks, and take 6 years to find another Ryan Tannehill. The cap money saved is negated by the draft picks traded/consumed plus the bad performance of the replacement QB.

    2015: Winston, Marriota, ? – no idea
    2014: Bortles, Bridgewater, Garoppolo, Carr – too soon to tell, maybe 2 work out to be NFL caliber?
    2013: all busts
    2012: Andrew Luck, Russel Wilson, Tannehill, RG3 – 3 starting QBs, and if RG3 can improve thats 4 – a huge year
    2011: Cam Newton, Andy Dalton, Colin Kaepernick. If Cam Newton was a 2nd round pick he’d not have been paid as much. 1 starting QB, and 2 serviceable ones
    2010: we don’t yet know about Sam Bradford, the rest were busts
    2009: Stafford is ok, the others were busts
    2008: Matt Ryan and Flacco are decent QBs
    2007: all busts
    2006: Jay Cutler, Vince Young were starters, the rest busts

    That’s around 1.5 QBs per year. Except QBs dont have 21 year careers, so some teams wont have NFL quality QBS (like the Jets, Bills, etc)

    I’d overpay 20MM, over 5 years (4MM year) not to have to sift through prospects.
    If I knew that I could always get a so-so QB (Kyle Orton at 4MM/year) I’d be more inclined to let the QB walk. But the replacement QB might bomb and cost a few games. Or they may have an ok year and want to get paid 8MM, so on to the next replacement QB, since you don’t want to sign these guys long term.