2016 Cap Analytics: Houston Texans

The Texans possess a solid degree of long-term cap flexibility (18th in Commitment Index) for a playoff team, which is a good thing considering that this placement does not include a large QB contract.  The contracts the team has signed its core players to over the past several years seem likely to age well under the quickly rising salary cap, and the team is in a position to add talent to the roster while only making a few expected subtractions for cap-related reasons.  This separates the Texans from other teams in the 7-9 win range that possess less long-term cap flexibility, more expected contract terminations, and greater numbers of free agents.

Continue reading 2016 Cap Analytics: Houston Texans »

Initial Thoughts on JJ Watt’s $100 Million Contract

According to John McClain of the Houston Chronicle JJ Watt has signed a six year contract extension worth $100 million that will make him the highest paid defensive player in the NFL. The contract would contain $51 million in guaranteed money.

The first thing that jumps out to me  are the numbers in the contract and the similarity to Mario Williams of the Buffalo Bills. Williams had signed a six year contract worth $96 million with the Bills a few years ago that had been considered an outlier for a number of reasons. The maximum value of that contract was $100 million and the total guarantee on that contract right around $50 milion (the real guarantee was $24.9 million).

So my assumption here is that they matched the contract of Williams except the incentives are a part of the base contract value. Williams’ cash flows over the first three contract years were $25 million, $15 million, and $13 million. I would imagine that those will be the baseline numbers used for Watt.

Because Watt has two remaining years under contract, techincially the new extension money does not start until 2016. When we calculate his year one cash total what we need to do is add up all his salary from 2014 through 2016 and subtract his original 2014 and 2015 salaries from the contract. Per McClain Watt will earn $20,876,385 in 2014 and 2015. That means his new money in that period is $12 million. Id anticipate his 2016 cash salary will be $13 million or slightly higher.

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I’ll be very interested to see the cash flows and guarantee structure of the full contract. If the only bonus in his contract is the $10 million signing bonus that leaves very little salary cap protection for Watt. Williams received $25 million in prorated money. The fact that this is a 8 year contract for cap purposes it makes the last three years of the contract completely “pay as you go” and essentially worthless years unless there is some unique structure involved. Houston usually has per game active roster bonuses in their contracts so Id imagine this is a major part of the contract as well.

When I had looked at Watt a few weeks ago I thought he would have opted for a shorter term contract with less money, but strong cash flows up front to improve his odds of a second go around with free agency. This contract now ties him up until 2021 if he continues to perform well.

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Regardless, this contract now sets the market for the young pass rusher in the NFL. There is no question that this is a valid contract, unlike the Williams one, and this represents about a 26% increase over the annual value of Clay Matthews’ contract. For Robert Quinn, Muhammad Wilkerson, Greg Hardy, etc…this contract is great news because their pay was going to hinge on what Watt could negotiate with the Texans.

From Houston’s end the timing was right if they were to sign a mega deal. At the moment they have no big name or money QB on the horizon. The team is clearly transitioning away from Andre Johnson as the face of the franchise and it was important to lock Watt up as the new face. From their perspective they could have had Watt for the next three years for around $23 million and dealt with three years of questions about commiting to him long term and potential holdouts. They will likely spend an extra $11-$13 million over the three year period for peace of mind and favorable salary cap terms.

When I get the full contract details I’ll update his page accordingly and try to do a side by side with Williams’ contract.

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Projecting a Contract for JJ Watt

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The other day there was some discussion on Twitter about Texans’ Defensive End JJ Watt receiving a contract extension worth in the ballpark of $23 million a season. That number seems crazy, so I figured I may as well jump in and take a look at Watt and where he might stand in the market and the type of contract I think he could receive.

The Player

Watt is a unique talent in part because of the position he plays on the field. In general most defenses that employ a 34 front do not have defensive ends that generate a great deal of pressure on passing downs. For the most part the 34 DE is responsible for occupying blockers, eating up space and allowing the linebackers make plays on the football. Much like defensive tackles, the 34 defensive end is not a position that gets noticed that often as their contributions go well beyond the stat sheets.

But Watt is different. He has the prototypical size of the defensive end in the 34 front, but he gets to the QB, and he gets there often. He is very disruptive and makes plays in the running game behind the line of scrimmage.  His ability to bat down passes is actually a topic of conversation among coaches and the media alike. He would seem to be a one of a kind defensive player.

The Stats

When we look at where Watt ranks I think there are a few categories we need to examine, because all are relevant to his eventual contract. The first thing I think that is worth looking at is his performance among 34 defensive ends.

Let use some of the numbers provided by Pro Football Focus for players with over 50% snaps.  Over the last three seasons the average 34 DE converts 1.2% of his rush attempts to a sack and 8.2% to a pressure. Here are the top 10 seasons over that time frame in terms of pressure conversion.

PlayerYearSacks/RushPress/Rush
J.J. Watt20132.1%16.4%
Cameron Jordan20132.7%14.5%
J.J. Watt20123.7%13.2%
Kyle Williams20132.4%12.9%
Justin Smith20131.5%12.1%
Mike Daniels20132.1%11.7%
Justin Smith20111.2%11.7%
Antonio Smith20131.9%11.2%
Calais Campbell20131.8%11.1%
Antonio Smith20111.5%10.9%

There are a few interesting takeaways from this. One is that Watt has been the most consistent player and is about two times as productive as the average player at the position. But as we look more at this list two things jump out at me. One is that his teammate, Antonio Smith, has two of the top seasons as well on this list. Smith is a very good player, but it may indicate that Watt is being given opportunities in the Texans defense to attack the passer that is not common to other teams. The other thing I notice is that out of these top 10 seasons, 7 came in 2013.

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In general we are now getting a greater number of players who are playing over 50% of the snaps and maybe more of these players are getting the green light to “go get the QB”.  Maybe we should call this the “Watt effect” as the Texans defense has shown an ability to be more aggressive up front from the end position. Looking further at the group of data for the last three years, the position has grown from just 13 qualifiers in 2011 to 21 in 2013. 62% of the 2013 players produced a better than average season compared to 47% and 38% the year before. The position is getting more productive and efficient at rushing the passer. That is something that may make Watt less unique than he was in 2012.

If we expand our list to include all pass rushers from the outside (34 outside linebackers and 43 defensive ends), the numbers change. The average pressure now jumps to 10.6%. The average sack rate is 1.8%. What is our top 10 when we expand the field?

PlayerYearSacks/RushPress/Rush
Jerry Hughes20133.6%19.3%
Elvis Dumervil20133.1%19.1%
Robert Quinn20134.0%19.1%
Aldon Smith20114.5%19.0%
Trent Cole20113.1%18.9%
Cameron Wake20132.5%17.9%
Justin Houston20133.0%17.8%
Chris Long20112.7%17.2%
Michael Bennett20132.4%17.2%
James Harrison20113.4%17.0%

There is no JJ Watt in this group. His best season ranks 13th. His second best season ranks 44th. That does not mean we can not use this positional group as comparison points, especially when we start looking at consistency, but it makes it more difficult to value Watt as a once in a generation player, which is something most seem to be doing.

Of course there is another aspect to the NFL and that is run defense. PFF tracks a stat called stops, in which they determine a tackle that constitutes a loss for the offense. Here are the top 10 seasons in that category since 2011.

PlayerYearStops/Run
J.J. Watt201217.1%
J.J. Watt201313.7%
Cedric Thornton201312.4%
Justin Smith201211.8%
Akiem Hicks201311.4%
Muhammad Wilkerson201210.9%
Tyson Jackson201110.6%
Calais Campbell201210.4%
J.J. Watt201110.2%
Kenyon Coleman201110.1%

This is a dominant showing by Watt, holding not just the top two spots, but three of the top 10 seasons outright. The only other players to appear on both lists are Calais Campbell and Justin Smith, neither of whom did it when their pass rushing was also top 10 in the same year. The average 34DE generates a stop on 7.2% of his snaps, so again he is probably close to double the average. This is once in a generation type of performance.

If we expand this list to the overall rusher market, Watt is still going to rank on top. This is essentially a dominant category for 34DE’s. The only non 34 ends in that top 10 are Anthony Spencer in 2012 (11.7%), Frostee Rucker in 2011 (11.6%), and Terrell Suggs in 2013 (11.3%).

There are some other stats that people can point to, but in general I don’t believe they would drive the price that much. His batted passes was pretty crazy in 2012 (PFF credited him with 15), but he’s had 10 total in his other two seasons, so I wouldn’t put that much stock in it.

Setting the Market

The gold standard for defensive players is Mario Williams’ $16 million per year bloated contract with the Buffalo Bills. Williams is a player that most very good players can match up with statistically, but this is one of those contracts that most consider an outlier. The contract itself is a byproduct of the Bills lack of success, desperation to be relevant, and general unappealing location. Still that will be the high end mark of probably any contract.

Here are the list of the relevant multi year contracts to the discussion on Watts as well as the two year average performance leading up to the new contract.

PlayerYear SignedAPYFull GuaranteeSack %Pressure %Stop %
Mario Williams2012$16,000,000$24,900,0003.3%16.1%2.6%
Clay Matthews2013$13,200,000$13,200,0002.6%14.2%6.7%
Charles Johnson2011$12,666,667$32,000,0002.3%14.8%7.0%
Trent Cole2012$12,131,250$14,500,0002.6%14.5%8.8%
Chris Long2012$12,050,000$23,550,0002.1%15.6%3.5%
Tamba Hali2011$11,500,000$11,500,0002.7%12.9%3.9%
Calais Campbell2012$11,000,000$17,000,0001.6%8.4%8.7%
Michael Johnson2014$8,750,000$16,000,0001.8%11.0%7.0%
Everson Griffen2014$8,500,000$19,800,0001.7%11.6%6.8%
Cameron Wake2012$8,300,000$17,000,0002.7%15.6%6.7%
Paul Kruger2013$8,100,000$13,000,0002.7%13.1%5.7%
JJ Watt???2.9%14.8%15.4%

Setting the Price

There are a few reasonable comparisons here. In terms of pass rush productivity, Watt ranks similar to Charles Johnson and Trent Cole, while being slightly less productive than Cameron Wake and Chris Long. Those names should immediately give us our minimum values for Watt. Wake, who was a bit older than some of the others, signed a lower contract in Miami and is the only player with high level production who failed to break the $12 million mark, which is clearly our low end of the marketplace for Watt.

From there Watt is going to have to point to a few factors to try to drive the price up. One is that his sack conversion rate is very high. A sack is always going to be more valuable than a pressure and teams put a premium on that. That said his 2012 season is the major factor in his ranking and each year that he produces in the 10-12 sack category will makes teams less likely to put the premium on the sack. In that respect he needs a strong sack year in 2014 if he can not reach an extension now.

Secondly it is clear how important he is to the run game. The 15.4% really stands out among this group, but again 34DE’s are expected to do well in this regard (he’s still a phenom) and run defense is not really a big barometer of salary. You can find a number of very good run defenders who were basically brought in to play on the veteran’s minimum. Others known more for run than pass play are pretty much earning in the ballpark of $5 million a season.

Another factor is that Watt is a proven full game player. Some of these other players were not. Watt more or less plays every snap of the game such that no salary is needed for a backup. He’s like Jared Allen in that regard in that he never takes a play off. Players who, when healthy, were top snap guys that are on the above list were Williams, Hali, Campbell, and M.  Johnson. Most of the others played often but more along the lines of 80-85% rather than in the 90’s.

The most recent relevant example that Watt should point to is Matthews. Matthews’ contract is very recent to the market and represents the worth of a cornerstone defender to his franchise. Matthews was also under contract at the time of signing and the Packers had similar leverage with the franchise tag that the Texans will have with Watt. Watt compares favorably to Matthews as a pass rusher, and using these numbers, in the realm of 4-11% better. If we split the range it brings us to around $14.2 million a season.  That’s probably a fair number to work from.

Going from there it’s really justifying additional money for being a pure full time player and an exceptional run defender. It might be realistic to get a team to throw you an additional $1-2 million for that aspect of the game, though many teams may just consider it a waste of resources since the NFL is a passing league. My feeling is a team would max out around $15.5 million unless they threw some backend money on the contract to equal the Williams annual value.

Negotiating with the Texans

Watt will likely have to take a discount if he signs an extension this season. Right now the Texans essentially control Watt’s rights for the next three seasons at a price tag somewhere around $23 million, depending on the cost of the franchise tag in 2016. The 2016 figure is not protected for injury, so at this point the guarantee is just $8.87 million.

If we value Watt’s extension at $15 million a year and assume a virtually guaranteed total of $40 million, that means he is essentially absorbing a minimum of a $54 million injury risk(the cost of the 16 franchise tag plus $40 million protected in the extension) by playing the next two seasons. If he has to play year 3 on the tag then it’s a $40 million risk. For Houston to absorb the risk they need to receive something in return.

Besides the injury risk, Watt also takes on a skill risk. As we discussed earlier the team was proving to be a good pass rushing team from non-traditional spots under their old coaching staff. Does that continue with the new staff?  How well does Jadeveon Clowney play in the defense?  His emergence could make Watt expendable if the cost gets too high, the way others made Williams expendable in Houston.

Another important aspect to signing now is opening up the path to future earnings. If Watt were to sign an extension this year it would likely be a 4 year deal, running through 2019. That would leave him open to a new contract at 30/31, an age where he could still be very productive.  If he is forced to play out the next three seasons he would probably have to sign a pure five year deal, leaving him 33 years old when he hits free agency again. He won’t get much at that age.

What I would do to come up with a fair price for the Texans is to estimate the likelihood of serious injury or skill declines to discount the amount that the team is guaranteeing Watt by extending him now. A study last season by Jenny Vrentas of MMQB indicated that there is around a 3% ACL tear rate in the NFL, which is usually regarded as the worst possible injury. Beyond that we could probably assume a 1%-2% probability that he suffers a different type of serious injury or would see his skills materially decline at the age of 25/26 as he completes his contract.

If we discount that $40 million guarantee at a 4% rate back from the 2016 season into the 2014 season, we would reduce his salary by about $3 million.  This type of guarantee is usually equal to the new money in the first two years of the contract. The remaining seasons would not be changed due to signing early as there was never any protection in those years to begin with. That would bring the fair contract value, in 2014, down to about $14.4 million a season. Each year that Watt survives the season without injury and performs well will increase the cost of his contract since he has less to gain by signing early.  There are a few ways to play with the numbers based on franchise tags, cap inflation, positional value inflation, etc…, but $14.4 million seems like a pretty reasonable baseline number.

In terms of cash flows I would look at the structure of the Matthews and Williams contract as a guideline. Both are reasonable expectations unlike Johnsons which is very top heavy and Long’s which is an even spread. I’d try to push for the four year extension rather than a five year extension. If the Texans insisted on five years then I think the final season should be tied to the franchise tag that year. There is so much uncertainty in the NFL that you would not want to commit to 2020 without seeing what the 2015 salary cap is. It would give the team a benefit they should not receive. That being said, the four year contract is one most likely only available in the 2014 season and that in 2015 the length will be five years.

Here is what I would think is a reasonable set up for the contract:

BonusP5PG RosterCashCap Dead
2014$15,000,000$1,907,385$0$16,907,385$6,576,197$27,795,197
2015$0$9,219,000$0$9,219,000$12,219,000$21,219,000
2016$0$6,400,000$500,000$6,900,000$9,900,000$9,000,000
2017$0$10,500,000$500,000$11,000,000$14,000,000$6,000,000
2018$0$10,200,000$500,000$10,700,000$13,700,000$3,000,000
2019$0$11,250,000$500,000$11,750,000$11,750,000$0

This works out to a four year contract worth $57.6 million. The first year new money take is $24,150,000 and the full guarantee about $26.12 million with another $6.4 million protected for injury. He’ll receive a $15 million signing bonus, which is pretty much the maximum that the team can add to the salary cap without removing Andre Johnson from the roster. While his cap charge is high in 2015, the Texans salary cap is in much better health. If you went to a five year contract I’d expect the guarantee to be higher  (around the $40 million discussed above) and cash numbers slightly higher on the front end as well.

Of course it will be interesting to see what happens in reality with Watt, but this is the ballpark I would think we would be looking at right now. I think his value could both rise or fall depending on how the year plays out. The closer he gets to free agency the closer he can get to the $16 million Williams number, especially if the salary cap keeps increasing at a rapid pace.

I would think both sides should consider a deal this season. Houston is going through a remake of the roster and I think this move would ensure Watt is the face of the franchise and be good for PR in the event things with Johnson continue to get ugly. The cost itself is relatively reasonable and the team will have the ability to walk away via trade or release if they want to move on as early as 2017.

Watt will earn around $10 million more than if he was forced to play the franchise tag game and at least have some added security. Houston has been known to restructure contracts for cap relief and all he needs is a restructure in 2017, which we have kind of made a decision year based on his cap charge, to more or less lock in his cash for 2018.  Plus he gets free agency in 2020 with this deal rather than 2021. So I think its relatively fair for both sides and within the market as constructed and Watt’s contributions and performance thus far in his career.

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Best & Worst Contracts 2014: Houston Texans

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Today we start the best and worst contract series by looking at the Houston Texans.

Best Contract: Andre Johnson

Andre JohnsonThe constant restructuring of Johnson’s contract make his deal hard to fathom as a good one (he has a $15.6 million cap hit in 2014), but there is no reason to move him from this spot this year. I’ve written about Johnson extensively on the site and it’s one of the most team friendly series of contracts for a superstar player in the history of the NFL.

This all started in 2007 when the Texans convinced Johnson to sign a 6 year extension for pennies on the dollar that would keep him in Houston until 2014. By 2010 Johnson realized how bad a contract this was as his salary was being jumped by far less talented players and tried to hold out, which resulted in a small raise and bigger incentives in exchange for two more contract years that would essentially block him from ever becoming an unrestricted free agent as he made the turn deeper into his 30’s as long as he remained a very productive player.

Since that initial contract Johnson has been named to five Pro Bowls, two All Pro teams and produced at least 1,400 yards in four of the last six seasons, many of which were spent catching passes from quarterbacks  who were not exactly top of the NFL caliber players. He’s done all of this while playing somewhere in the ballpark of $6 million less a season than Larry Fitzgerald of the Arizona Cardinals, who has never approached the top end statistical seasons that Johnson has.

Not surprisingly, Johnson is threatening a hold out this year as he is locked into a bad deal that may see him get stuck on a bad team in 2014. Unfortunately for Johnson the holdout will cost him at least $1 million as the Texans wisely put safeguards in the contract in 2010 to strip him of a big roster bonus if he tried to hold out again and missed team activities.   That was yet another concession Johnson made for that 2010 raise and it clearly looks to have been a big one.

While the Texans were never able to capitalize on Johnson’s contract to shuffle enough resources elsewhere to get to a Super Bowl, they did get themselves an absolute steal at one of the highest paid positions in the NFL.

 Worst Contract: Arian Foster

Arian FosterFoster is a fine player whose agents negotiated an incredible deal despite not having much leverage at the time of signing. Foster is one of the great undrafted success stories, coming out of nowhere to become one of the most productive running backs in the NFL, but it’s a position a decreasing importance and one where teams are very hesitant to invest big money due the steep decline often seen by players. Foster went into the 2012 offseason as a Restricted Free Agent, meaning the Texans controlled his rights for pennies.  Often teams use that to their advantage to negotiate favorable terms with a player, but that was not the case here.

Seemingly using the framework of the DeAngelo Williams contract in Carolina, Foster received a whopping $20.75 million in fully guaranteed salary and $30 million in cash over the first three years of his contract. Foster received a huge $12.5 million signing bonus which virtually assured him of earning his money in the third season of the contract since his release would cost the team $7.5 million against the salary cap. It was a well crafted deal to ensure protection for Foster.

Foster did not have to give up much to get what was the best contract at the position for a player not named Adrian Peterson or Chris Johnson as the team tied just $500,000 per year into per game active roster bonuses. While that is not a small amount, for a high usage player like Foster, who had hamstring issues in 2011 and had no leverage in the contract talks, they perhaps should have tried for more.

Foster would go on to have a very good 2012 season in which he ran for 1,400 yards but on his lowest yards per carry (4.1) number of his career and his yards from scrimmage declined for the second straight season. The Texans ran him into the ground with 351 carries, a bright move if the player was a RFA you had no interest in keeping but not the brightest move for a team that just committed $30 million over the next three years. Foster broke down in 2013 with a bad back and missed half the season.

Foster is said to be healthy and new head coach Bill O’Brien has stated that they have a lot of things they plan to do with him. The Texans better hope that the back is solid and he can return to being what he was in 2011, otherwise they are going to have spent a good deal of money on a player that they didn’t need to take such a big risk on when they signed him to this contract.

2013’s Best and Worst Texans Contracts:

2013 Best Contract: Andre Johnson (Still on team hoping for a trade to a contending team)

2013 Worst Contract: Matt Schuab (Benched in 2013 and traded for a late round pick to Oakland)

Click Here to Check out OTC’s other Best and Worst Contracts from around the NFL!

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Thoughts on Andre Johnson and the Lessons to be Learned from his Contract

Not unexpectedly Andre Johnson is expressing unhappiness with the Houston Texans according to Brian Smith of the Houston Chronicle. In the article Johnson questions whether Houston is the place for him to finish his career and stated he will not attend offseason activities.

At 32 years of age Johnson knows that his career is no longer rising and he is going to spend the declining years on what is a rebuilding team.  He can look around at older veterans like Reggie Wayne and Steve Smith and see the way their franchises played hardball with them and the lack of interest that may be on the market for aging players. This was his last opportunity to try to get a new deal to at least make it a financially strong reason to play his career out in Houston but the Texans looked to have turned down that idea leaving him unhappy on a team that looks to be looking towards the future rather than the present.

Johnson carries a salary cap charge in 2014 of $15,644,583 and a cash contract value of $11 million. If traded before June 1, Johnson’s cap charge for the Texans would be $11,964,166 representing a savings of $3,680,417 against the cap. If traded after June 1 the Texans would take a $4.644 million cap charge in 2014 and a $7.319 million charge in 2015. In either scenario the trade would help rather than hurt the Texans salary cap.

The more difficult aspect of the trade is to find a trade partner. Johnson has $34.5 million remaining on his contract, a huge number for a player that is about to turn 33 years old. While Johnson plays at a far higher level than his peers at that age, players like Anquan Boldin and Wes Welker are working for $6 million a season. To complicate matters Johnson would likely want an extension or some type of guarantee on his contract.

Only 12 potential destinations could absorb his $11 million salary without touching the contract. Of those 13 only the Bengals, Eagles, Packers , and Colts would be considered sure fire contenders and most of those squads are set at the WR position. Fringe playoff teams with the room would include the Jets, Dolphins, and Bills. Buffalo would certainly have no interest and Miami is already overspent at the position.

Johnson does risk money in a hold out. This was not the first time that Johnson had been unhappy with the Texans. Back in 2010 Johnson made it known he was unhappy with a contract extension that had multiple years left on it as lesser players began earning more money as the salary cap and importance of the wide receiver position grew. The Texans gave in that time, but in a very minimal way, which I’ll discuss below. To further protect themselves from a holdout threat they tied $250,000 in salary escalators and another $1 million in week 1 roster bonuses to offseason attendance.

There is no arguing the fact that Johnson has always been underpaid. He had been as productive as any of the top paid receivers in the NFL but never reached those financial thresholds. For players considering representing themselves in contract negotiations Johnson’s career should be studied closely and perhaps a warning sign for either not looking for an agent or at least consulting with someone well versed in the NFL contracts and the salary cap.

Johnson represented himself in 2007 when he signed a 6 year extension with the Texans. Johnson had two years remaining on his rookie contract at the time so this extension would take him to the age of 33, meaning it would be the only big contract of his career. Johnson had been scheduled to earn $15.7 million in the 2007 and 2008 seasons of his rookie contract and would have likely increased that number to $16.7 million via escalators.

In his negotiated extension he received a raise of just $3.325 million, none of which would be paid until 2008. He was guaranteed next to nothing and the contract structure was such that he never carried a cap hit in the extension years that would exceed $8.65 million. In addition the signing bonus was so small that he could have been released very quickly had he been injured or ineffective. For that tiny guarantee and raise he was locked in at a price of $7.468 million per year for the next 8 years.

The following season Larry Fitzgerald received a contract extension from the Arizona Cardinals that was worth $10 million a year and only added another two years onto Fitzgerald’s contract. Fitzgerald received $20 million in real guarantees and millions more in injury protection. Fitzgerald played on a better team and had better numbers but the contract terms were a major difference.

After back to back 1,500 yard seasons in 2008 and 2009, Johnson made it known he needed a new deal. The problem for Johnson was that the contract he negotiated for himself in 2007 was so bad that he had destroyed any leverage possible. This go around Johnson hired an agent but there is only so much that could be done. The Texans basically eased the situation adding another two years onto his contract to make him happy. In terms of base contract value Johnson only received a small raise. Originally set to earn $13 million in 2010 and 2011, Johnson would now earn $17 million, a $4 million raise. His 2012 through 2014 seasons remained identical.

Unlike other high end receivers Johnson’s contract contained escalator clauses that, if earned, would push his average contract value over the first five years of the deal to $50 million, thus matching Fitzgerald’s annual value of $10 million a season.  To reach the full numbers Johnson would be required to finish in the top 5 in any of a number of receiving categories. Johnson ended up earning all but $2.2 million of the escalators. In addition Johnson stood to lose at least $1 million a season in the 2012 to 2014 seasons if he held out his services.

While the contract did earn Johnson some added guarantees they paled in comparison to other players and Johnson could still have easily been released after the 2011 or 2012 seasons.  He was one of the best bargains in the NFL- a top quality player with almost no ability to hold out and playing under reasonable salary cap allocations. The Texans would make a mess of his contract over the years with constant restructures (his contract was reworked every year for cap relief), but the base deal was extremely team friendly.

While the deal would be a slight victory for Johnson it was short lived. Fitzgerald would put about 100 less receiving yards than Johnson in 2010 and 500 less yards than Johnson’s 2009 season he used as leverage for his contract, but would be rewarded with a monster contract in 2011 that averaged over $16 million a season with $45 million in various guarantees. Since that time Johnson has caught 21 more passes for 334 more yards than Fitzgerald. On a per game basis it’s no contest as Johnson averages 89.5 yards a game to just 66 yards a game for Fitzgerald. Despite that Johnson was paid just $36.8 million compared to $51.65 million for Fitzgerald from 2010 to 2013.

Since that time Johnson’s contract has been surpassed by the likes of Percy Harvin, Mike Wallace, and Dwayne Bowe, who have a total of five 1,000 yard seasons between the three of them. Johnson has seven. Of those seven, four are for more than 1,400 yards. It’s a travesty that Johnson has been paid the way he has, but these were mistakes or miscalculations that were made back in 2007 and more or less compromised his entire earning potential. Now he is left staring at a rebuilding team with no QB to throw him the ball. He knows odds are he’ll be released following the season but with the likes of Ryan Fitzpatrick throwing him the football his stats stand to suffer and as a 34 year old free agent teams are going to say that it was age related more than team related and he’ll finish his career as a bargain player for some other organization. He probably deserved better but the NFL is a tough business and players should beware of what one bad decision can do to your financial future.

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Free Agency Thoughts: Houston Texans

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Key Additions: Ryan Fitzpatrick ($3.6M per year), Chris Clemons ($1.4M)

Key Re-Signings: Garrett Graham ($3.8M per year)

Key Losses: Antonio Smith (Raiders), Joe Mays (Chiefs), Earl Mitchell (Dolphins), Ben Tate (Browns), Darryl Sharpton (Redskins)

Major Cuts: Owen Daniels ($4.5M cap savings), Danieal Manning ($4.5M), Matt Schaub ($3.9M- trade)

Free Agency Thoughts:

The team with the worst record in the NFL had an offseason with little entrances and many exits. The biggest move came when the team was finally able to trade QB Matt Schaub whose role with the Texans had to come to an end. Schaub was the classic example of a QB who, for a time, is looked at as a good player when expectations are low and the cost is low, but every flaw is ripped apart when those situations change. The extension was always questionable for Schaub and with the team expected to compete for a title the fanbase turned on him when it became clear he was a level below the Super Bowl quality QBs. It clearly rattled his confidence and there was no way he would get it back in Houston.

He will be replaced by Ryan Fitzpatrick, who the team signed to a two year contract. Fitzpatrick, who went through a similar situation as Schaub in Buffalo, is a gamer and will likely be accepted by the fans since the expectations are so low. His contract by no means blocks them from drafting a QB and he won’t cause issues when and if he moves to the bench. Fitzpatrick does not have much physical talent but he is a good fit for the team.

Garrett Graham showed some flashes and can do enough to potentially be the main tight end for the next two or three years. If they move to a young QB Graham is valuable for the season as a safety valve. Chris Clemons is a nice bargain contract. Clemons surprisingly had limited suitors in free agency and there is no risk in his contract if they need to release him next season as the dead money is just $100,000.

Most of the other cuts and losses were all veteran players who would not have a role on this team going forward. Ben Tate would be the lone player where you can argue the move, but if the Texans are going to keep their fingers crossed that Arian Foster is healthy there is no way they can sink more money into veteran runners on the team. Tate likely would not have been willing to return anyway since he wanted more opportunities.

Overall Grade: C+

Free agency is not meant for a team like the Texans. Ideally free agency is meant for good quality teams who might be a piece or two away from a playoff run. It is not meant for rebuilding teams unless it is just to find a few bodies to throw on the field. The way the Texans approached free agency was an admission that it was time to completely rebuild after their two year window was slammed shut and that was the right decision. I am certain that many Texans fans wish that the team could have added a few pieces, but the team was capped out following big contracts given to Andre Johnson, Matt Schaub, Brian Cushing, Arian Foster and others.

This was the first year in some time that the Texans did not tinker with the contract of Johnson for cap relief. That was an absolute must and another nod in the direction that the team is eventually headed. It will be interesting to see if they consider fielding trade offers for him either this year or next. Either way I would expect his contract to change next season when his cap charge is over $16 million. Between not touching his contract, letting the veterans walk, and getting something in return for Schaub this was a successful free agency period even if on the surface they look like they are giving up.

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2014 Houston Texans Offseason Salary Cap and Financial Report

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Welcome to one of the newest additions to the Over the Cap website: the offseason Financial Scouting Report, which should help serve as a guide to a teams’ offseason planning for the 2014 season.  This will be our second report and will break down some thoughts on the Houston Texans. Each report will contain a breakdown of the current roster, a look at performance from 2013, salary cap outlooks, free agents, salary cap cuts, draft costs, extension candidates, and possible free agent targets. The hope is to do a report for all 32 teams by the start of Free Agency, if time allows.

Because the report contains some graphs and charts and over 4,000 words it is available for download as an Adobe PDF file that you can read at your leisure offline and keep for a handy reference during the year rather than as a blog post. The report is free for download and reading, but if you find the report useful and would like to help OTC continue to grow and add content like this we would appreciate the “purchase” of the report for just $1.00 by clicking the Paypal link below or the one within the report. Also if using any of the graphs or salary data please just add a reference to OTC when doing so.

TexansFR

Download OTC’s 2014 Houston Texans Financial Report




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