Looking At the Houston Texans Salary Cap and Coaching Vacancy

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Driving home from work the other day I heard a discussion between Jay Glazer of Fox and Mike Francesa of WFAN where they felt as if the Texans head coaching job was “one of the best openings in the last 10 years”.  While some of their talk focused on ownership that doesn’t meddle most of it was centered around the strength of the roster and flexibility they have. Glazer compared it to the Chiefs of 2012. I admit I was surprised when I heard that so I wanted to look deeper at the team.

Going into the season I had felt the Texans were a team that likely was going to trend downward.  We see it all the time in the NFL. You are pretty good for a long period of time and eventually the wheels come off. The 2011 Houston Texans were an excellent football team. Everything clicked on defense and their offense was potent. Unfortunately QB Matt Schaub was injured and that killed any hopes for real playoff success. The 2012 team was much more inconsistent than the 2011 team.  They were up at times and down at others. Schaub returned but faded in critical situations. The wheels fell off for him and the Texans this year.

In terms of salary cap the Texans are not in a position to be active in the way the Chiefs were this past offseason. Kansas City had the cap room to trade for a mid grade QB, extend a franchise tender to a left tackle, extend a wide receiver on a top of the market contract, and then go out and sign a number of players to add to the poorly coached team. The Chiefs had millions upon millions to spend.

The Texans have been tight on cap space all season and will carry over just about $1.1 million to the 2014 NFL season. Based on their current cap commitments the team will have just slightly more than $9 million in cap space to spend on improving their team, a number that does not include tenders (though they have no RFAs of note) or escalators.  Considering one of those improvements will come with the number 1 pick in the draft, whose cap charge will be just over $4 million, the team has essentially no money to spend with the roster as currently constructed.

The Texans will go into the offseason with nine free agents that are considered contributors to the team. Houston will need to create some cap space in order to re-sign some of these starters and rotational players. The list is as follows:

Name

Position

% Snaps

Wade Smith

G

87%

Antonio Smith

DE

74%

Garrett Graham

TE

72%

Darryl Sharpton

ILB

71%

Joe Mays

ILB

58%

Earl Mitchell

DT

54%

Ben Tate

RB

45%

Ryan Harris

T

43%

Greg Jones

FB

29%

The question becomes where do they go to create cap space?  It would seem to be a foregone conclusion that the team releases Schaub, but that move only saves the team $4 million, essentially the room it needs to sign his replacement, which will be expected to be their top draft pick. But beyond Schaub where is there to go for cap relief?

The Texans need to restructure contracts in the past or sign players in a manner to fit short term within the cap has them with very limited options. They are not a team that has one or two players making large sums of money with no realistic chance of being on the team in 2014. The Texans highest cap savings are TE Owen Daniels and S Danieal Manning at $4.5 million each. Both were injured in 2013, but would be penciled in as starters in 2014. Both are also free agents following the 2014 season so there is no restructure relief available and extending two players on the wrong side of 30 coming off injury would not seem to be beneficial. Both could take paycuts but the team is not going to get major relief through just these two players.

CB Johnathan Joseph would be a logical candidate for restructure as he has an $11.25 million hit and they could push a portion of it to 2015, which is the final year of Joseph’s contract. Again that is only going to save around $4 million with the bill coming due in 2015, so it doesn’t make a huge dent in the Texans salary cap.

The two big questions will be what the team does with WR Andre Johnson and RB Arian Foster. Both are big ticket players, but Johnson will be 33 years old and Foster’s body already seems to be breaking down. The Texans have restructured Johnson’s contract so many times that going there again is going to cause damage in the future. Johnson is still a great player but he is nearing that age where the Wide Receiver numbers begin to decline and if you bring a rookie QB into the mix you never know what can happen.  His cap in 2015 is already over $16 million and the team has over $7 million in dead money there if they had to release him. Adding more money to those totals seems like a bad idea.

Foster has an $8.5 million hit and release saves just $1 million in cap, but there at least has to be a discussion about his future. Tate is a younger and likely cheaper option at this time and it would seem unlikely that the team can afford both players. With Foster’s injuries it’s a situation that needs to be watched carefully.  Foster would more likely be a June 1 cut candidate so that his salary cap savings can be applied to signing draft picks.

Houston also needs to be concerned with the future of LB Brian Cushing. When he plays Cushing is one of the better inside linebackers in the NFL, and the Texans are paying him accordingly, but he has only played 12 games in the last two years. This could turn into a Jon Beason situation where constant injuries lead to wasted cap room.

Now I’m painting a bleaker picture than this really is- The Texans do have really young talent ranging from JJ Watt, arguably the best defensive player in the NFL, to DeAndre Hopkins, who could very well be one of the next stud receivers in the NFL. The team this year just never recovered from some early losses and things spiraled out of control as injuries piled up.  They also play in one of the worst divisions in the NFL making a quick turnaround that much easier.

But I don’t see how the Texans are a new coach away from greatness. This is a team that probably underachieved for some time in part due to coaching and then peaked in 2011. Now its time to begin turning parts of the roster over again.  The Texans had 7 starters this year over the age of 30 and 8 over the age of 29, so turnover is a necessity. The short term cap position does not really lend itself to adding significantly to the team in free agency. The team does not have a Quarterback on the roster. There are just as many questions with this team as there are with most teams searching for a head coach. .

I don’t think that in terms of readiness that this job compares with some of the more recent coaching hires that included Mike Tomlin to the Steelers, Jim Harbaugh to the  49ers, or Rex Ryan to the Jets. The Steelers were set at the QB position when Tomlin took charge and did not really have a roster overhaul to consider. The other two coaches did not have Quarterbacks (though Ryan did end up with a top draft choice to play the position) but both had tremendous roster flexibility due to better managed salary caps and teams that had not yet peaked. At the time all three were highly desirable jobs.

The Texans are not a bad job like the Raiders, but to me they are a rebuilding team that must first navigate the breaking down of a team following successful period of football before they make the turn to returning deeper into the playoffs. Any coach that takes the team over should be expected to improve off this seasons dreadful performance but most likely it will take two to three years to drive home the results that many seem to think are just going to happen overnight.

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RB Arian Foster Done For the Year

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According to NFL.com Houston Texans Running Back Arian Foster is headed to Injured Reserve, which will end his 2013 season. Foster, who earns $31,250 for each game his is active, will lose out on $250,000 in compensation for the year due to the injury. His 2014 salary cap number will also reduce by $250,000 due to half of his 2014 roster bonus now considers not likely to be earned.

For Foster the injury could be a long term consideration for his contractual future. Running backs in the NFL are traditionally only effective for a short period and with the Texans failing badly this year there will naturally be questions about paying $5.75 million in base salary to a player who will have essentially missed 13 games (he barely played in two games this year because of injuries) in the last three seasons. Foster will only be 28 next year so he is not at the age where teams really begin to shy away from the runners, but it could be a consideration. Releasing Foster would save the team $1 million in cap space in 2014.

Foster has some added protection because Fantex has pledged a ridiculous $10 million dollars for a low percentage of his future “brand income”. This money should be contingent on Fantex raising the money through a Foster IPO and I wonder if an injury now damages their chances of raising the money. Provided they raise it, and I would imagine enough fans want to “own” a part of a player, Foster will have little to worry about.

The injury to Foster now opens the door for backup Ben Tate to prove that he is worth a starting position in the NFL. Tate will be a free agent following the season. There have been questions about Tate’s ability to handle a full load and he will get to answer those questions now. While I doubt he will get the kind of contract some have speculated about (upwards of $7 million a season) a strong showing should be able to get him in the Reggie Bush area of $3.5 to $4 million a season. A poor showing and he may have to settle for being a secondary back in the future.

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Thoughts on the Texans Options With Matt Schaub

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The other week I touched on the reasons why the Texans would likely not consider releasing Matt Schaub in 2014, but yesterday Schaub had a complete meltdown in a big game and his head coach gave him a mercy killing and pulled him from the game in favor of TJ Yates. The fall of Schaub has been stunning. He played well most of last season but it would seem an entire offseason of people discussing how Schaub would never win a big game has mentally broken him as he looks like a completely different QB in 2013.

It is very difficult for a team to pull a starter for the backup and then go back to the starter. The fanbase has already decided the problem with the team is Schaub and I would imagine that there are some players who privately believe the same. Going back to Schaub just opens the floodgates of negativity unless the team is sure he can handle the pressure and thrive in the situation.

From Houston’s point of view benching Schaub might be in the best long term interest of the team. Most squads in the NFL have short windows of opportunity unless they have the elite QB leading the team, of which there are very few in the NFL. Houston has been a very good team the last two years with the 2011 team arguably being at the top of the AFC before an injury to Schaub put them behind some other teams.

If the window is closing they need this season to determine if TJ Yates or Case Keenum can be an answer for the longer term or if it is time to turn the page and rebuild.  It does the team no good to trot Schaub out there and finish 7-9 or 8-8 and then go into next season with an open competition between the three. You need to know at the end of 2013 if your QB is on the roster for next season or not.

The cost of releasing Schaub in 2014 results in a $10.5 million dead money salary cap charge, which represents $4 million in savings for the Texans.  Houston might consider moving Schaub in the next few weeks to try to offset some of that cost. Schaub makes a fully guaranteed $7.25 million in 2013 of which just $5.1 million remains to be paid. If the Texans hold off two weeks to find a suitor that team would only be responsible for $4.3 million in salary which a fringe playoff team might be willing to take on with hopes of a change of scenery fixing the player. All of this money would carry over to help offset the cost of cutting Schaub in 2014. If there was a market for Josh Freeman outside of Minnesota the Texans should be calling those same teams to see if there is interest in Schaub, far more accomplished and likely coming at the same cost.

Another option open to Houston would be what I call the “waiver wire dump” in which you release a veteran player after the trade deadline in the hope that he is claimed to relieve yourself of the salary obligations. While veterans normally become free agents upon release the rules change following the trade deadline and they are then exposed to waivers.  If Schaub is claimed the remaining salary and guarantee transfers to the acquiring team. That scenario allows the Texans to see what happens over the next few weeks if they decide to go with Schaub at the helm and deal with the potential backlash of the move.

At that point Schaub’s salary for 2013 would be less than $4 million which I would imagine a team would pick up considering no compensation would need to be given to Houston.  The team picking up Schaub in such a scenario would have no financial obligation to Schaub if released beyond the 2013 season. His cap charge for that team would be $11 million in 2014 with the possibility to restructure to make the cap charge lower.  Teams may consider that reasonable for a player with talent that could restart his career with a change of scenery.

It will be an interesting few weeks for Houston who have a difficult decision ahead of them and finding ways to make the best out of a bad situation.

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Would Texans Consider Cutting Matt Schaub in 2014

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I had a few questions on Matt Schaub yesterday but didnt really think much of it until PFT published today how the Texans can get rid of Schaub next season using the June 1 cut. So I figured we may as well chime in as well.

When you consider cutting a player such as Schaub a lot more goes into it than “correcting a mistake”, which the Texans certainly did make by extending him last season. The issues with Schaub brings up the consideration of a replacement level player and the salary associated with that player.

Based on my cap estimates for Houston I don’t think the June 1 designation is a viable option in 2014. Remember that by designating a player a June 1 cut the player’s entire cap hit remains on the books until June 1, just as if he was still a member of the team. In the case of Schaub this would be $14.5 million. That figure is difficult enough for the Texans to burden with Schaub on the roster let alone with him signing for another team. The actual cap relief, which would be $11 million dollars in 2014 would not occur until June 2, at which point free agency has come and gone. So if he goes the Texans would most likely take the full $10.5 million dollar hit in 2014 and free up $4 million to spend in free agency.

The question at that point is what type of player can the Texans bring in for $4 million dollars that gives you the performance of Schaub?  The answer is nobody. Schaub is a game manager that crumbles under pressure, but he is capable. Last year, in terms if difficulty of throws, Schaub was actually very efficient because the Texans don’t ask him to do what he does not do well- throwing the ball down the field.   I have not run the numbers this season, but I would imagine they will be close when all is said and done.

Schaub is not Ryan Fitzpatrick, the type of QB that is significantly over-earning based on performance. In the high priced QB market Fitzpatrick should have been earning about half his salary. Schaub is right around where his money should be. While it may sound high, and it was high IMO when he signed, the fact is QB money in the NFL is incredibly high.

$4 million in the NFL does not buy you much. It is rare for a good QB to hit the free agent market. Of the veterans the only players with a cap charge at $4 million or lower include Carson Palmer, Matt Flynn, Matt Hasselbeck, Matt Cassel, Matt Moore, Kyle Orton, Shaun Hill, Jason Campbell, Shaun Hill and Fitzpatrick. Are any of those players better than Schaub?  The answer is no. Really none are even close and other than Palmer all are backups.

Even if you want to bump to the $11 million category,which would be his full savings if designated a June 1 cut,  the players who will fit that cap charge who would hit the market are Jay Cutler, Josh Freeman, and Chad Henne. You can probably throw Mark Sanchez in that mix as well as he has a higher cap hit now, but will never earn the same money once released from the Jets. None of those are strong options.

The reality is there is almost no financial benefit to releasing Schaub next season. You would need to find a way to bring in a star veteran QB, likely by trade, where you are compromising your future by guaranteeing future money just to make the cap figures match and trading away draft choices. PFT mentioned going with Tyler Yates or Case Keenum, both much cheaper player currently on the roster, but would anyone be excited about that?

The other option is to draft a QB, assuming that the Texans would even be in a position to draft a QB.  Thats a viable alternative and cheaper alternative to Schaub, but most teams do not catch lightning in a bottle as the Seahawks, Redskins, and Colts did in 2012. Most struggle as rookies. Some much longer. This would be the same as the Keenum/Yates possibility, IMO in terms of what it means going forward.

If they plan on going that route that isn’t just dropping Schaub, but most likely turning the page on the veteran aspect of the team and completely building for the future. Is that the direction that the Texans would want to go in?  I would imagine only if they have a catastrophic season in which they fail to make the playoffs and finish under 0.500. They are a long way away from doing that.

View Matt Schaub’s Contract and Salary Cap Page

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Brian Cushing Contract Breakdown

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Two days ago it was announced that LB Brian Cushing had signed a $56.6 million dollar contract with the Houston Texans, now we have the financial details of the deal.

Per a league source, Cushing received a $9 million dollar signing bonus and will receive a $6 million dollar option bonus in 2014. Cushing will earn base salaries of $1,143,000 (2013), $2,000,000(2014), $4,000,000 (2015), $6,000,000 (2016), $5,500,000 (2017), $7,250,000 (2018), and $8,250,000 (2019). In addition each season contains $1.25 million in roster bonuses. As previously reported the contract contains $21 million in guarantees.

In terms of new money Cushing will earn $53.5 million over the 6 year period. He will earn $16.25 million in new money in the first extension year which is $750,000 more than Sean Lee earns with the Dallas Cowboys. From there Cushing’s money vaults far above Lee’s, which is to be expected as this is a much larger contract.  The final year of the deal contains no prorated money so the real meat of the contract is 5 years for $44 million.

The Texans’ use of two prorated bonuses early in the life of the contract allows for manageable cap figures in the early stages of the contract. Cushing’s in which he will count for just $4.443 million in 2013 and $6.25 million in 2014. This was important for Houston who has been in a cap crunch most of the summer. The first truly burdensome year will occur in 2016 when his cap leaps to $10.25 million, an excessive number for an interior linebacker. At that point his contract will contain $7.2 million in dead money making it a difficult pill to swallow if the team was to need to cut him for cap reasons. So he has a strong chance to earn more than the guarantee in his contract due to the contractual structure, typically a strong win for the player. That said I don’t know if the roster bonuses are of the per game variety and if they are that is likely the giveback Cushing’s side had to make in order to get the strong overall cash and cap structure.

View Brian Cushing’s Contract and Salary Cap Page

View Brian Cushing’s Financial Report

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Best & Worst Contracts: The Houston Texans

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A few weeks ago Jason LaCanfora published a list of best and worst contracts in the NFL so I thought it might make a good idea for us to do the same here at OTC, with a team by team approach. I’ll try to be a bit more analytical in terms of why money was paid and how it fits in the market, but the general premise is the same. The one key difference is outside of restructured rookie contracts under the old CBA we will only use veteran contracts as there is a big difference between best draft picks and best contracts.  Please note that there is a difference between a bad player and a bad contract when discussing some of the selections. Clicking on a players name will take you to his salary cap page.

Andre JohnsonBest Contract: Andre Johnson

It’s a pretty rare occurrence to say a player with a $14 million dollar cap hit is the best contract on the team, but cap charges can be a strange thing and this just happens to be the one year where he has a high charge. Johnson has been spectacular in his time with the Texans. He has produced nearly 1600 yards in two of his last 4 seasons and he does this without the great QB and or the decent 2nd target to help to draw the coverage away from him.

Why do I like this contract so much?  Because the Texans more or less played hardball with Johnson who realized he signed a long term below market contract back in 2007 that he desperately wanted to get out of by 2010. The Texans really didn’t blink, throwing a token two years onto his contract to bump up the perceived value and giving him a base increase of just $4.2 million in his original contract years.

For Johnson to really earn his money the contract was heavily incentive with rewards for finishing near the top of the NFL in key receiving categories each season. He could earn an additional $10.8 million to bump the 5 year value of the contact to $10 million a year, still a steal in a market where Percy Harvin makes over $12 million and Calvin Johnson and Larry Fitzgerald are paid as if they are Quarterbacks.

The Texans built all kind of holdout protection in Johnson’s contract tying large roster bonus to almost 100% workout participation and no missing of mandatory offseason team activities. The bonuses are not paid until the start of the regular season. Johnson’s salary currently barely cracks the top 10 at the position and could be released by 2015, the first of his “new” seasons with the Texans, with a charge around $4 million, giving them enough leverage to threaten to cut Johnson if his play begins to deteriorate.

Matt SchaubWorst Contract: Matt Schaub

Schaub probably gets beat up a little too much by people like myself.  By no means is he great, but he’s also not awful either. He is a low upside QB that benefits from the system he plays in, but when you make the type of financial commitment the Texans made to Schaub you are going to be scrutinized much more.

The whole process was a bit questionable. Schaub was coming off injury in 2011, the third time in five seasons in which he failed to complete more than 11 games, when the Texans made the decision to extend him in 2012. Salary cap considerations were not really a concern as the extension came long after free agency was complete. Both points should have been leverage for the Texans, but they may have overreacted to a disappointing finish to the 2011 season when backup TJ Yates was clearly a weak point in the playoffs.  It is also possible that the team panicked following a monster extension given to Drew Brees and the fear of what could happen if Schaub was to go on and win a Super Bowl.

It resulted in a contract for Schaub that was loaded with prorated money and large guarantees. Schaub’s $7.29 million per year guarantee upon signing was the second largest veteran guarantee at the time only to Brees. His $17.5 million dollar signing bonus was second to Brees at the position.  The tradeoff to the large guarantees was some injury protection in the last three years of the extension, but with Schaub’s injury history no tradeoff really should have been required. With $10.5 million in dead money for Schaub in 2014, the Texans are likely stuck with him through at least that year. Considering there were questions about his future with the team at the end of 2012 he will need a tremendous 2013 to avoid a real backlash against him.

Check out Our Other Best & Worst Contract Articles

AFC East: Buffalo BillsMiami DolphinsNew England PatriotsNew York Jets

AFC North: Baltimore RavensCincinnati BengalsCleveland BrownsPittsburgh Steelers

AFC South: Houston Texans, Indianapolis Colts (July 3)