Marcell Dareus, Outlier Contracts, and Team Precedents

Late last night following the Bills preseason game against the Browns, star defensive lineman Marcell Dareus, in the final year of his rookie contract, expressed disgust over the lack of movement on a contract extension. Dareus has stated that the offers indicate that Buffalo isn’t serious about keeping him and don’t reflect his value as a dominant talent. According to Tyler Dunne of the Buffalo News, the Bills have offered a contract worth $90 million over six years, which would make Dareus the second highest paid defensive tackle in the NFL if those are the full extension numbers. Dareus is aiming for more as he looks at the outlier contracts in the NFL and sees bigger dollars for a player like himself, especially because of the Bills past history with contract negotiations for highly desired players. Continue reading Marcell Dareus, Outlier Contracts, and Team Precedents »

Can a Premier Contract Player Really be a Bargain?

I read an article by Jimmy Kempski of the Philadelphia Voice the other day about Fletcher Cox and came across an interesting quote by former NFL executive Joe Banner regarding the franchise signings.

Teams signing deals today are doing so because the contracts will be looked upon as cheap down the line given the rising salary cap. I think that’s true to an extent when discussing extensions, but I think application across the board doesn’t really work and in most cases does not work for the franchise tag contracts.

Continue reading Can a Premier Contract Player Really be a Bargain? »

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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State of Rebuild – Buffalo Bills

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How do you build a winning football team?  Over the next few weeks I am going to look at a handful of teams that are either relatively early in their rebuilding process or on the verge of a possible rebuild.  The purpose of this is not to reflect on past regime decisions compared to the current decisions but rather to start the analysis from day one and evaluate personnel decisions along with contract structures and styles to see if certain trends help produce a winning franchise.

doug_whaley.jpg_30ea03e4d780625de53d9a55a525f2f0State of the Franchise and Front Office

Since the 1999 season, 31 of the 32 NFL teams have made the playoffs in at least one season.  After five straight seasons finishing last in the AFC East, its fourth in a row under now former GM Buddy Nix, the Buffalo Bills are the lone team not to make a playoff appearance since 1999 and are in the process of a full rebuild.  With new General Manager Doug Whaley, Head Coach Doug Marrone, and first round quarterback selection E.J. Manuel, the Bills are hoping they can turn the franchise around and end the long playoff drought.  Whaley, who served under Nix as Assistant General Manager since 2010, assumes the vacated GM position created by Nix’s resignation after this years NFL draft.  Whaley received a contract extension in February and had been heavily involved in the coaching search that eventually led to former Syracuse head coach Doug Marrone replacing Chan Gailey as the Bills new head coach.  Nix’s resignation as GM is not a clean cut from the organization though, as he is being retained as a Special Assistant to the team.

Contract Strategies and Trends

The succession of Nix to Whaley and subsequent retaining of Nix on staff poses an interesting question – will anything actually be different?  The Bills have not been shy about using both roster and workout bonuses in significant deals.  Over the past few years, Ryan Fitzpatrick, Fred Jackson, Stevie Johnson, and Leodis McKelvin all received substantial roster and workout bonuses in their respective extensions and Kyle Williams also received yearly roster bonuses in his.  Free agent acquisitions Manny Lawson and Kevin Kolb received both roster and workout bonuses as well in their deals this offseason.  Lawson is due a $500,000 roster bonus in 2014 and 2015, a $250,000 roster bonus in 2016, and a yearly $50,000 workout bonus as part of his 4-year deal while Kolb is due $250,000 roster bonus in 2013, a $1 million dollar roster bonus in 2014, and a yearly $100,000 workout bonus as part of his 2-year deal.

USA Today

The big elephant in the room though is Mario Williams’ behemoth contract he signed last offseason.  Williams’ 6-year/$96 million contract also has substantial roster and workout bonuses including a $10,600,000 roster bonus in 2014 and a yearly $500,000 workout bonus in 2013-2016.  Jason did a great job summarizing exactly why this deal does not make any sense considering the circumstances and why its such a cap killer in his Best and Worst Contracts: The Buffalo Bills.

“Williams was never a top pass rusher in the NFL. He has always been good but more like top 20 good, not top of the NFL good. Williams makes 14% more than Julius Peppers and about 26% more than Charles Johnson and Jared Allen, the next three highest paid players at the position. Williams 3 year average leading into his deal with the Bills in both sacks and tackles was worse than all 3 of those players yet he earned significantly more. Williams will cost the Bills $17.8 million in dead money if cut in 2014 and $12.4 million in 2014, making him a near impossible player to move on from in the near future. Williams can be productive but it is unlikely he can ever be productive enough to match the price that the Bills agreed to pay for him.”

One final thing to take a quick look at is the Bills’ dead money situation.  As part of their massive rebuild, the Bills released Ryan Fitzpatrick, Terrence McGee, Nick Barnett, George Wilson, Tarvaris Jackson and Mark Anderson among other players and as a result racked up about $11.6 million in dead money so far for the 2013 season.  In year 1 of a rebuild, that figure is nothing to really worry about and by comparison is fairly low.  Other teams in the midst of a full rebuild like the Jets and Raiders have upwards of $21 million (mostly $13 million from trading Revis) and a whopping $50 million respectively this year.  The part to keep an eye on is 2014 where right now the Bills have the most dead money going into the 2014 season at $10 million due to Ryan Fitzpatrick’s $7 million and Mark Anderson’s $3 million respective charges.  By comparison, the Jets don’t have a single dollar of dead money charges right now and the Raiders only have Michael Huff’s $6.2 million charge.

JairusbyrdBiggest Upcoming Roster Decision

A few months ago, this section would have been all about what to do with Ryan Fitzpatrick and would have looked like a much more basic version of Jason’s great write up here.  Now the biggest decision for the Bills is how to handle their All-Pro free safety Jairus Byrd.  Instead of letting Byrd test free agency, the Bills used their non-exclusive franchise tag on him.  The non-exclusive tag for a safety this year is $6,916,000, contingent on Byrd signing his tender.  Under the non-exclusive tag, Byrd was free to negotiate with other teams, but if he agreed to terms with that team, the Bills had the right to match the offer or receive two 1st–round picks as compensation for Byrd.  Unsurprisingly, no team agreed with Byrd, and after extensive attempts by the Bills and Byrd to come to an agreement, a long-term deal could not be reached by the July 15 deadline.  Currently, Byrd refuses to sign his tender and his holding out of training camp.  The Bills’ hands are tied – by rule, they are unable to sign Byrd to a long-term extension until after the 2013 season or trade him until Byrd signs his tender.   Byrd’s options are now to sign his tender before week 1 of the regular season and play out the year under the franchise tag or wait until week 10 and sign his tender in time to play 6 games and get credited for the league year.  The best Byrd can hope for is to sign his tender and collect a nice paycheck this year and try to prevent the Bills from franchising him again in 2014.

Reports are that Byrd wishes to be the highest paid safety in the league and Bills seem to not be willing to match that demand.  Will that demand change by the end of the 2013 season? At the high-level Byrd has played consistently over the past few years, probably not.  Assuming that Byrd signs his tender at some point and gets credited for the league year, the Bills will have a few options once the season ends.  They can agree to a new deal with Byrd, franchise him for a second year in a row, or let him test free agency.  If they decide to tag him again, the price will be at 120% of his tag price this year, which comes out to about $8.3 million.  The bottom line is this situation is a long way away from being resolved whichever route the Bills decide to go.

Past ‘State of Rebuild’ Articles

San Diego Chargers

 

Ryan Feder
Tulane University Law School
J.D. Candidate 2015
@RyanFeder
rfeder1@tulane.edu
 
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Best & Worst Contracts: The Buffalo Bills

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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.  Clicking on a players name will take you to his salary cap page.

Stevie Johnson

Best Contract:  WR Stevie Johnson

A tough decision here as the Bills have very few players that would be considered good value talent. The other two players I would consider are DT Kyle Williams and G Kraig Urbik, but Johnson stood out more to me than both of them. Working with no help at QB or from other receivers Johnson has managed to produce over 1,000 yards 3 years in a row from 2010-2012. The only other players to accomplish that feat were Marques Colston, Calvin Johnson, Brandon Marshall, and Roddy White.

Johnson only makes $7.25 million a year and had $11 million of his contract fully guaranteed. Those numbers rank around 20 and 24 among all wide receivers. He has also been the only player in the NFL to consistently match up well with CB Darrelle Revis when Revis was healthy. When players like Mike Wallace are making $12 million a year having Johnson on such an affordable deal allows the Bills to outspend their rivals at other positions. His annual value is less than inferior players such as Pierre Garcon, Santonio Holmes, Miles Austin, and Sidney Rice, making him one of the best bargains in the NFL at the position.

Because Johnson is so young the deal itself only carries the Bills to when Johnson turns 30, giving them a reasonable dead money charge if they decide to move on in the last two years of the contract if his play begins to falter with age.

Mario Williams

Worst Contract: DE Mario Williams

The Bills have their fair share of bad deals on the books, but none worse than the head scratching 6 year $96 million dollar contract they gave to Williams. Williams was a former number 1 pick of the Houston Texans and 3 years removed from a 10 sack season when the Bills signed him to bolster their defense. To make matters worse he was coming off a season ending injury in 2011, the second time in two years he ended the season with an injury.

Williams was never a top pass rusher in the NFL. He has always been good but more like top 20 good, not top of the NFL good. Williams makes 14% more than Julius Peppers and about 26% more than Charles Johnson and Jared Allen, the next three highest paid players at the position. Williams 3 year average leading into his deal with the Bills in both sacks and tackles was worse than all 3 of those players yet he earned significantly more. Williams will cost the Bills $17.8 million in dead money if cut in 2014 and $12.4 million in 2014, making him a near impossible player to move on from in the near future. Williams can be productive but it is unlikely he can ever be productive enough to match the price that the Bills agreed to pay for him.

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