Extensions vs Free Agent Signings: Wide Receivers

Each year, teams across the NFL invest a large portion of their salary cap in Contract Extensions and Free Agent Deals for players who seemingly perform well. Once a team strikes a deal with a player, it is not only important to analyze the performance that justified the new deal, but it is also critical to monitor a team’s return on investment once the player has signed.  That being said, I have conducted a breakdown of the Wide Receiver Market to highlight some trends in relation to the performance of a WR before and after signing a deal and to present a risk analysis between a team signing a WR from the open market or via extension.


Explaining the Data Set

I first want to briefly explain the bucket of players I have used in this analysis. Any Wide Receiver who has signed a Contract Extension or Free Agent Deal, between 2011 and before the 2015 Regular season, which had an Average Contract Value of at least a Tier-2 WR at signing will resemble the average figures on the tables. For this analysis, the APY of a Tier-2 Wide Receiver starts at $6 Million in 2016 cap dollars. Reggie Wayne, who signed an extension with the Colts in 2012 and had a $5.83M APY, is also included in this analysis because the salary cap in 2012 was $120.6M and his APY in proportion to the 2016 Cap Dollars exceeds the $6M figure.

The numbers triggering a deal

In the first paragraph, I mention the importance of analyzing a player’s performance that justifies a new contract. The reason this is important is that the numbers that justified a contract in the past can be used as comparison for future contract parameters when another team and agent are attempting to value and identify the tier of a player during negotiations.  The table below illustrates a few statistical measures that WRs recorded on an average per game basis over 32 games and 16 games prior to being rewarded a Tier-1/2 WR contract.

Deal TypeAvg. Age @ DealTar/G 32 G. prior Tar/G 16 G. prior % of Team Targets/G 16 G. prior/G 32 G. prior Rec/G 16 G. prior YPG 32 G. prior YPG 16 G. priorTD/G 32 G. priorTD/G 16 G. priorAPY % of Cap @ signing
Free Agent28.187.567.7420.78%4.514.5462.1462.63.43.466.48%
Extension28.088.558.7123.64%5.145.2972.7775.57.47.487.93%

First, looking at the numbers 32 games prior to a deal, WRs who played a large role in their team’s game plan, by % of Team Targets, and performed at a Tier-1 level were more likely to receive an extension than hit free agency. One minor exception I noted was Jeremy Maclin, as he ranked 9th in Receiving Yards but was out of the Top 10 in every other receiving category in his last season with the Eagles. Now, when comparing the numbers from 32 games prior to a deal to 16, you can see that the extension group continued to perform better in every metric in addition to having a larger incremental increase in Receptions and Yards.

The second point I want to make from the table above is that Extension Deals approximately had a 1.5% higher APY than FA Deals. Generally, players hitting the open market at the peak of their career tend to get the bigger deals due to the nature of bidding in Free Agency. In an extension, a team will have slightly more leverage in negotiations because the player is still under contract with the team and the player benefits by shifting the injury risk to the team in-trade for a less than open market deal.  An example of this was in 2013 when the Chiefs signed Dwayne Bowe to an $11.2M APY the week before he would have been a Free Agent. A few months later, Victor Cruz, who still had a full season remaining on his contract, received an extension with the Giants that had an $8.6M APY. Even though Cruz was the better player, he received a lower APY in-trade for long-term financial security and injury protection.

In this analysis, the higher APY in extension deals can be linked to the two record setting deals that were signed by Calvin Johnson and Larry Fitzgerald in 2012 and 2011 respectively. The graph below helps illustrate some of the other outliers as well.

apy-at-signing

Takeaway

The takeaway from the numbers I have pointed out thus far is if a team has a WR performing at a Tier-1 Level, it is almost certain that the team will re-sign the WR to a Tier-1 deal. We saw a run of this last year with AJ Green, Julio Jones, TY Hilton, Demaryius Thomas, and Dez Bryant. It is also common for a Tier-2 or lower performing WR to hit the open market and have a desperate team sign him to an overvalued Tier-1/2 deal. A prime example was in 2013, when the Dolphins signed Mike Wallace to a high Tier-1 APY of $12M after he ended a season that ranked him a mere 34th in receiving yards, league wide. The Chargers’ signing of Robert Mecheam in 2012 was another overvalued signing as Mecheam received a $6.375M APY for averaging a mediocre 43 receiving yards over his previous two seasons in New Orleans.

Performance post deal

As it is critical to analyze the performance that triggers a new deal for a player, it is equally important to analyze a player’s performance after signing. Doing so not only allows a team to monitor their return, but also helps in future decision-making when a team is faced between resigning a “home grown” or utilizing free agency. The table below illustrates the average percent change for a WR’s performance 32 games prior to signing a deal to after a new deal. On average, WRs from both contract buckets had a drop in production in every statistical category. The largest drop in production came from receiving yards, a category in which extended WRs had a 9% drop and free agents had a 14% drop. Additionally, since there was a relatively small drop in receptions than yards, the overall efficiency of WRs declined as Yards/Catch declined.

ExtensionFA
% Change in Targets-0.47%-1.35%
% Change in Receptions-0.37%-0.78%
% Change in Yards-9.23%-14.03%
% Change in TDs-0.09%-0.13%
% Change in Team Targets-0.02%-0.04%

It is also important to keep in mind that even though the production of WRs dropped across the board, WRs who re-signed with the same team still produced at an exceptional level. The table below shows specific numbers a WR posted per game after signing a deal. Translating the numbers to a season perspective, FA WRs averaged a 60/768/5 stat line while the extension group  outperformed with 70+ catches, 1000+ yards, and 6 TDs.

I believe one reason that FA WRs performed poorly post contract is the lack of chemistry they had with their new team and Quarterback.  Also, the receiver may have downgraded from a Tier-1 QB to a team that had a dismal situation at the position. This is when it is really important for a team to ask themselves if they see the WR as a player who will uplift the offense around him (i.e. Larry Fitzgerald, Vincent Jackson) or if the WR’s success is correlated with the talent level of a QB (i.e. Greg Jennings, Torrey Smith).

Now looking at the drop in production from the extension group, WRs who received speculative extensions were the major contributors. By a speculative extension, I mean a team that re-signed a WR based off his draft status, high ceiling, and athletic ability more than his intangibles such as system fit, consistency, etc.

One WR who resembled a speculative extension is Percy Harvin after he signed his deal with Seattle a few days after the Vikings traded him. Seahawk’s brass was well aware of the risky investment in a player who had an injury history, run-ins with coaches, and never played a snap with their team; however, they were willing to overlook those negatives because of his speed, home-run play making ability, and high ceiling. There were also a couple of other WRs who were rewarded an extension after getting hot at the right time, such as Brian Hartline and Mike Williams. Here, the Dolphins and Buccaneers rewarded both WRs based off only a short window of success. After the extensions, Hartline no longer caught defenses off guard while Williams struggled to stay healthy.

From an agent’s perspective, I think these three deals are important to take note of as they showed that draft status and the perception of a player can be used as leverage in negotiations. This may have been applied with Tavon Austin’s extension this past summer. Austin did close to nothing on the field to warrant a $10.5M APY; however, his agent may have appealed to the Rams with words along the lines of “You drafted him 8th overall for a reason… He has the talent and this will be his breakout year.” Using draft status and perception as leverage does not work for all teams though. A cap efficient team like the Patriots would have treated Austin as a sunk cost and/or resigned him only at his true value.

Age Factor

Lastly, the aging of a WR also played a factor in the production drop off after signing a deal. As a WR ages, he loses his burst and agility which makes it more difficult for him to create separation. Furthermore, of the 39 receivers who I used in my study, 10 were 30 or older and 6 of those 10 remained with the same team. The table below shows the difference in production after a 30+ WR signed a Tier1/2 deal. You can see, again, FA WRs really struggled in comparison to the extension group. I believe the reason for this is that an older WR who goes to another team may struggle with adapting to a new system. An older WR who stays with the same team still has the ability to make plays with his IQ and experience from the offensive system.

FAExtension
% Change in Targets-3.91%-1.44%
% Change in Receptions-2.44%-1.03%
% Change in Yards-36.53%-17.63%
% Change in TDs-0.09%-0.10%

For the last part of this article, I thought it would be interesting to point out some of the individual WRs who were used in this study and indicate the type of return they provided to their respective teams.

Good Return

  1. Antonio Brown (Brown signed his extension after his first 29 career games so his stats prior to his extension don’t reflect 32 games)
  2. Calvin Johnson
  3. AJ Green
  4. Julio Jones
  5. Jordy Nelson
  6. Vincent Jackson

One team that I want to give special credit to, only because they rarely deserve to get credit for their careless spending in Free Agency, is Tampa Bay for their signing of Vincent Jackson.  When Tampa signed him in 2012, they brought in a serious red-zone threat who had demanded a double team around the goal line in his time with the Chargers. After scoring 15 TDs in his first two years with the Bucs, his TD totals have fallen, but in the overall scheme of things, his Targets, Yards, and Receptions have all been at an overall higher rate than his last three seasons in San Diego, where he was entering his prime. Additionally, over his first four years, Jackson has played 82% of Tampa’s Offensive snaps while only missing 9% of games.   Even though Jackson’s been slowing down since last year, playing only 48% of snaps, it’s impressive to see a Free Agent WR play the majority of his deal at a high level.

targets1

receptions-1

yards-1

td1

Bad Return

  1. Percy Harvin
  2. Mike Williams
  3. Santonio Holmes
  4. Sidney Rice
  5. Laurent Robinson
  6. Greg Jennings
  7. Torrey Smith
  8. Mike Wallace
  9. Robert Mecheam
  10. Dwayne Bowe

Of the ten WRs I listed above, one player that really sticks out to me is Laurent Robinson. After he signed a 5-year FA deal with the Jaguars in 2012, Robinson was only active for 44% of the games in his first season while playing in 24% of Offensive snaps before being released due to concussions.  A more recent deal that has already showed signs of failure is the 49ers signing of WR Torrey Smith. During his time in Baltimore, Smith was targeted 6.88/Game to a now dreadful 3.88/Game which I think is a combination of his QB as well as his lack of ability to gain separation. Smith was also a brought in to be a true homerun hitter after he averaged .75 TD/G 16 games prior to signing with San Fran. In his first season with San Fran last year, his TD production per game dropped 50% and his overall on-field efficiency also plummeted as he played more snaps (76.4%) in his first year in San Fran vs. his last year in BAL (73.2%)

td2

rec-2

yards-2

target-2

Final Thoughts

I believe performing this analysis really helps one think more about whether a team made the right decision in letting a player walk into free agency and understand why some teams refuse to invest big money for WRs on the open market. This type of analysis should also be important for both agents and teams entering future negotiations. Agents can compare the numbers to those of his/her client and make a point for why his/her client should have a value of a Tier1/2 APY. Teams can use the forward performances of comparable players to better assess the risk of offering a new contract. For example, by looking at a player like DeAndre Hopkins, whose numbers are similar to those of AJ Green and Julio Jones prior to their extensions, the Texans can be more confident in Hopkins producing a higher return for the team.

Hardik Sanghavi graduated from DePaul University in 2016 with a major in finance and minor in accounting. During his time at DePaul, Hardik interned with ESPN Chicago and Priority Sports & Entertainment. He now works as a Commercial Underwriter in the Insurance Industry. You can follow him on twitter at @hardiks94.

  • McGeorge

    Hardik,
    Good analysis and good visuals.
    Another reason for the drop is the player may have had a career year, and the next year is just reversion to the mean.