#MooresLaw2 featuring Caponomics!

In an attempt to make #MooresLaw much more conversational and natural than it was during the first episode, there are no notes accompanying this episode. I wanted to only use the notes that I wrote for myself on my trusty yellow legal pad. On that legal pad, I broke teams down into their own sheet of paper with notes, questions, and examples of things I see written below that team’s name.

My point with all of this is that I think I’ve found a nice, natural format for the podcast and I think that you guys will really enjoy it as it evolved. I am very excited to start trying to master this craft because I think a podcast will allow us to explore many more topics than any one article I write ever could. Plus, with the time constraints that we all have, my articles always get long, so rather than read those long articles, now you can listen to a podcast that has more content than those articles and the content is packaged in a way that I feel is going to be much more convenient for you as you commute to work, go for a run or just try to unwind at the end of the workday.

Continue reading #MooresLaw2 featuring Caponomics! »

Manning Rolls Salary Into Incentives…Does It Impact the League?

I’ve talked here a good bit about Peyton Manning’s contract situation with the Broncos and their desire to ask him for a pay cut. Well yesterday Manning sort of agreed to a pay cut, taking a base salary reduction of $4 million and turning it into incentives based on playoff performance. As I said before the Broncos had little leverage to ask for a paycut and likely played on the idea that Manning did not want to chance having to play his last year or two in another uniform, but it is the incentive structure I wanted to talk about.

Manning will earn $2 million if he wins the AFC Championship game and another $2 million if he wins the Super Bowl. These were the kind of bonuses that had been common in rookie contracts many years ago, where a highly drafted QB would be further rewarded for playoff success. However, these incentives were not as common in veteran contracts, specifically in the contracts of players as accomplished as Manning.

I’ve long held firm to  the belief that the NFL as a whole was a bit stunned at the prospect of Joe Flacco earning over $20 million a season, seemingly on the strength of winning a Super Bowl. That contract directly led to Matt Ryan earning even more than Flacco because from a statistical standpoint  there was no comparison between the two players. Ryan was consistently throwing for well over 4,000 yards and 25 touchdowns compared to Flacco’s upper 3,000 yard years and 20 touchdown seasons.

San Francisco was next up to extend a young quarterback in Colin Kaepernick. Kaepernick had appeared in a Super Bowl and championship game in his short career. He had great potential and was also looking for a monster deal. While he received a very strong contract it was unique in that the contract contained a large number of incentives that were tied to either being named to the All Pro Team or reaching the Super Bowl again.

The contract kind of sent some shockwaves around the contract world because Kaepernick was tying his future security and earnings to high performance levels. Most said it would mean nothing, but then when Andy Dalton signed an extension with the Bengals he also tied a large number of contract dollars to playoff performance. Odd but Dalton wasn’t exactly a household performer and had failed multiple times to win in the playoffs.

The feeling was that such contracts would not impact negotiations with Cam Newton (former first overall pick), Andre Luck (former first overall pick), or Russell Wilson (Super Bowl winner). Similarly the feeling was these would have no bearing on the next wave of veteran extensions such as Eli Manning and Ben Roethlisberger and in fact they did not when Alex Smith signed a four year extension with Kansas City.

But with Manning, arguably the greatest QB of his generation, now agreeing that millions of dollars in his contract be tied to ultimate team performance people should take notice.  I’m not sure that this is going to be considered an outlier structure anymore and perhaps the next wave of QB’s are going to be pushed into such contracts.

I’ve long held the belief that the QB position has become overpaid in part because of the overreliance on things like team wins or playoff wins. Maybe now this is the way teams will start to bring those numbers down in the future. I’d watch closely at the negotiations this spring and summer to see if this trend continues or if it ends with Peyton. My guess is we will soon be seeing it again.

The Manning vs. Brady Debate and What the Broncos and Manning Should Do in 2015….

The main thing we’re focusing on here will be what Manning and the Broncos should do in 2015 to construct a roster that gives them the best chance at winning the Super Bowl, but we’ll also be addressing the Manning vs Brady debate that has been going on since the early-2000s and that New England fans think is finally settled.

I’ve always been very interested in the Manning/Brady debate and I hope I can bring a unique perspective your way with this analysis as I don’t think anyone has taken this approach. Below, we’ll be looking at their cap numbers and the percentage of the cap both quarterbacks took up over the course of their careers. Then we’ll look at how their cap hits affected the team that was constructed around them by analyzing their team stats over the years.

I do think through analyzing both of their careers from a cap perspective, we’ll be able to better understand the argument of who’s the better quarterback, but also better understand the impact that the salary cap can have on a team regardless of how good the player is. Very few doubt that Peyton Manning is the greatest regular season quarterback of all-time, but has his success and salary hurt him from being called the greatest quarterback of all-time?

By the end of this, I think I’ll put together a case that I hope would convince Peyton Manning and Tom Condon that a pay-cut is the best option for Manning from a financial standpoint. Heading into the last season or two of his career, Manning has a decision to make: do I want to make about $40-43 million these next two years or do I want to make a little less, win a Super Bowl or two and go down as the greatest quarterback of all-time?

I would argue that Tom Condon has a fiduciary duty to convince Manning that giving himself the best shot at a Super Bowl, in essence, betting on himself, will create more income for him in the long-run. Two or three Super Bowls sounds a lot better than one!

Let’s get to it…

(As always, click on the figures to enlarge them. If you have a Mac, hold the command key and click on the figures to open them in another tab.)

Figure 1: Manning vs. Brady: Cap Hits

Manning vs. Brady Cap Hits

Figure 2: Super Bowl QB Cap Hits

Super Bowl QB1 Cap Hit

Figure 3: Manning Team Stats

Manning Team Stats

Figure 4: Brady Team Stats

Brady Team Stats

Figure 5: Manning vs. Brady Stats

Manning vs Brady Stats

Figure 6: Offensive Rankings for Super Bowl Champs

Final Super Bowl Offensive Rankings

Figure 7: Defensive Rankings for Super Bowl Champs

Final Defensive Super Bowl Rankings

As you’ll see in the figures above, Manning has consistently had a much higher cap hit than Brady over the course of his career and my argument is that his cap percentage has been a huge factor in his playoff struggles over the course of his career.

When you compare Manning’s cap charges over the course of his career, he’s cost his team 3.95% more of the cap per year. Just looking at team’s top 10 cap charges in 2014, an extra 3.95% of cap space could help you sign free agents over the years like Elvis Dumervil (2.54%), Donte Whitner (3.2%), Chris Clemons (3.92%), DeSean Jackson (3.2%), Connor Barwin (3.68%), Dominique Rodgers-Cromartie (2.07%), or Golden Tate (2.33%).

That was just a display of what 3.95% could get you on the free agent market, but even MVP level players like JJ Watt (3.44%) and Antonio Brown (3.40%) cost less than the 3.95% more of the cap that Manning took up. Obviously, this isn’t me saying who the Colts or Broncos could have gotten over the years, just a display of what that kind of cap percentage can get a team. Due to this, I think that extra 3.95% is a huge deal.

When we’re discussing Brady, the fact that he won three Super Bowls by his fourth season enabled them to have a championship caliber team around him due to his low cap hits. His ability to work with the Patriots to have a team friendly contract also has allowed him to be surrounded by a Super Bowl caliber team throughout his career.

When you compare their Super Bowl winning years, Manning’s cap charge was 10.36% during his 2006 season, while Brady averaged 5.57% over his four Super Bowl winning years. Even when you use Bledsoe’s cap number instead of Brady’s in 2001 since he was their number one cap hit, his Super Bowl average is till 2.34% lower than Manning’s. An extra 2% of cap space is similar to what Rodgers-Cromartie cost the Giants this year and a great cornerback can be the difference between winning a Super Bowl or not. In fact, Julian Edelman cost the Patriots 2.07% of the cap this year with the extension he signed in March of 2014. If Brady had a contract like Manning’s, do they have the space to sign such an important piece of their Super Bowl run? Or do they just decide to roll with Amendola and draft his back up?

Manning vs. Brady: Team Offense and Team Defense

When you look at the statistics of team offense and defense, you really get an idea of how much Manning’s cap number could have hampered the Colts over the years. In 2004, Manning lost to Brady in the AFC Championship game 20-3. While Manning had a historic year with 4557 passing yards and 49 touchdowns, which was a record at the time, he took up 20.50% of the salary cap, which is 7.42% more than Steve Young took up in 1994 as the highest Super Bowl cap hit of the salary cap era.

I would argue that the fact that Manning took up one-fifth of the Colts cap that year, is why their defense was one of the worst in the NFL and is a huge reason why the Colts lost to the Patriots that year. The Colts defense was 19th in points allowed, but 29th in yards with their pass and rush defense both being below 24th in the NFL. Their rushing offense was 15th in the NFL.

For 14.24% less of the cap, the Patriots got Tom Brady for 6.26% of the cap and while he didn’t have as good a year as Manning, the team was built to win in the playoffs with a rushing attack that was 7th in the NFL and a defense that was 2nd in scoring defense and 9th in yards allowed. That 2004 season really stuck out to me as a salary cap lesson. Sure, Manning might be the greatest regular season quarterback of all-time, but you can’t win in the playoffs without a more balanced team.

Even during Manning’s Super Bowl winning 2006 season, the Colts were 18th in the NFL rushing the football, their defense was 23rd in points, 21st in total yards and they were the worst rush defense in the NFL. A huge x-factor during that playoff run was a healthy Bob Sanders, who only played four games during the regular season, but helped the Colts give up only 73.3 rushing yards per game during their playoff run.

Since Manning has rarely had a balanced team, great playoff teams, teams that are balanced and have great defenses are able to dare Manning’s teams beat them with the rushing game and so many times, they’ve been unable to do that.

I don’t think it’s a coincidence that during Manning’s 29 and 31 year old seasons, which sandwich his Super Bowl 2006 season, he had two cap hits under 10% of their salary cap and the Colts had the number one scoring defense in each of those seasons. These were also the only two seasons of Bob Sanders career that he played more than six games.

Unfortunately for the Colts, during that 2005 season, they lost by three to a Steelers team on their way to a Super Bowl in the Divisional Round and in 2007, they lost to the Chargers by four. In 2007, Marvin Harrison only played five games, which left Dallas Clark and Anthony Gonzalez as their second and third leading receivers with a combined 1192, which just isn’t enough if you’re going to be a pass-first team, with the 18th best running offense in the NFL.

In that Divisional game against the Chargers, Harrison had a small role and Antonio Cromartie covered Reggie Wayne for most of the game during the best season of his career and had a spectacular one-handed interception and forced a Marvin Harrison fumble.

Since Manning has rarely had a balanced team, great playoff teams, teams with great defenses have often been able to dare Manning’s teams beat them with the rushing game and so many times, the Colts and Broncos have been unable to run the ball.

When I compare the offensive and defensive team stats of the two teams Brady and Manning have quarterbacked, I note the sustained balance of the Patriots over the last 15 years. The Patriots have had a point differential 3.4 points higher than Manning’s teams. When I look at teams build to win in the cold of the playoffs, I look for rushing and rushing defense and the Patriots are better in both of those because they’ve been more balanced over their careers.

So much of the playoffs, as we saw in January of 2015 especially, come down to game planning and match-ups. In 2005 and 2007, when Manning had the best defenses of his career, he ran into two teams in the Steelers and Chargers who matched up very well with them because of defensive backfields made up of players like Ike Taylor and Troy Polamalu, then Antonio Cromartie and Quentin Jammer.

The Patriots are the team that’s exploiting your weakness because they’re good enough at everything to do it. Balance isn’t being the best passing and rushing team in the NFL because that’s just too hard to do in this era. Balance is being able to ram LeGarrette Blount down the Colts throat like the Pats did in January because you’re good enough to do that. The Patriots have been doing that kind of stuff for a decade and a half, it helps that they have one of the greatest football minds ever, but it also helps that they have one of the best quarterbacks ever for a very reasonable cap number.

2014 Broncos and What It Means for 2015

Now, the 2014 Broncos were one of the most well-balanced teams of Peyton Manning’s career, but unfortunately, he had that right thigh injury that we all saw really hamper his abilities against the Colts. I’m a firm believer that he has a lot left in the tank, I think he’s still the quarterback who was on pace for 5280 yards and 48 touchdowns, while completing 67.08% of his passes through 10 games. Those yardage and touchdown totals would both be in his top three for his career.

It’s no coincidence that his numbers began to falter when Julius Thomas went down against the Rams in game 10. Throughout his career, Manning has been very reliant on the tight end. Even during his first year in Denver, Jacob Tamme and Joel Dreessen combined for 93 catches 911 yards and seven touchdowns.

Heading into that St. Louis game, Julius Thomas had 38 catches for 423 yards and 12 touchdowns in his first nine games, which ends up only being 47 yards a game, but opens the field up for the rest of the passing game. Once Thomas went down, opposing defenses didn’t need to worry about the tight end, even when he was playing, he was unable to play full speed. Excluding the three catches for 46 yards and a touchdown that Virgil Green had in Week 17 against Oakland, the Broncos had 14 catches for 128 yards over five games, only 26 per game.

When you look at Manning’s career, tight ends have always played a vital role in his offenses. Over the course of his career, they’ve accounted for 21.1% of his passing yards and 25.7% of his passing touchdowns. They’ve always been a vital part of his red zone success as evident by the massive impact Julius Thomas has had scoring touchdowns the last two years.

Excluding the 2011 season that he was injured, from 2006 to 2013, Manning’s tight ends have averaged 104 catches for 1075 yards and 9 TDs. The only time Manning had a tight end with over 1000 yards was in 2009, when Dallas Clark went for 1106 yards. Over those seven seasons, only 13 tight ends had over 1000 yards, yet Manning’s assortment of tight ends have combined to average Pro Bowl numbers.

Figure 8: Manning’s Tight Ends

Manning's Tight Ends Stats

Figure 9: Leading Tight Ends from 2006-2014

Leading TEs since 2006

Julius Thomas is the most athletic tight end Manning has ever had in his career, but he has some question marks like injuries, blocking skills, and the fact that he hasn’t had more than 800 receiving yards in a season, yet will command top market value. Seeing the importance of tight ends in a Manning offense and the growing importance of the tight end in the NFL, I think the Broncos need to resign Thomas if they want a shot at the Super Bowl.

I do think that signing a less heralded, cheaper player like Charles Clay or Jordan Cameron and drafting someone like Florida State’s Nick O’Leary in the second or third round. Even drafting Maxx Williams in the first round could be the way to go if Thomas leaves, but I would certainly sign a veteran because of the time it takes for a tight end to develop. There are a lot of different choices they could make if they don’t resign Thomas, but I’d rather stick with a more known commodity if I were them.

One thing I’ve researched a bit this past week is production by top tight ends as rookies and I’ve come to the conclusion that tight end is a position where players need a few years to develop. They need to be NFL ready as blockers and pass catchers to produce, while running backs and receivers obviously both have to do this as well, more is asked of tight ends as inline blockers and pass catches, so it’s very unlikely that the Broncos will be able to plug-and-play a rookie who can play at a Super Bowl level.

Here are the rookie stats of some of the best tight ends over the last 20 years and some of the best young tight ends like Clay, Coby Fleener and Zach Ertz.

Figure 10: Top Tight End Production as Rookies

Tight End Production As Rookies

Jeremy Shockey and Rob Gronkowski are the only guys with rookie year numbers comparable to what Manning has come to expect from the tight end position. I don’t think there are any tight ends in the 2015 draft ready to produce at that level as rookies, so if they let Thomas go, they will definitely need to replace him with a veteran free agent. Like when Manning missed the 2011 season, we saw how valuable Thomas was in his absence as Manning struggled down the stretch.

I mention all of this because I think that Manning’s 2014 Broncos were the best overall team he may have had in his entire career. They had talent in all the right places and spent their money on the right positions with their top 11 cap charges being on the pass game positions that I spoke of in my analysis of Super Bowl Champions.

Figure 11: 2014 Broncos Top 10 Cap Hits

2014 Broncos Top 10 Charges

According to Pro Football Focus, Ryan Clady and Wes Welker were the only players in this group who had bad seasons with both of them being in the negatives, but outside of that, I think the Broncos had a well constructed salary cap for the year with money being spent in the right places.

Heading into the offseason, they’re similarly set up in 2015, but that’s before we factor in the free agents that they’re almost certainly going to want to resign: Demaryius Thomas, Julius Thomas, Terrence Knighton, Brandon Marshall and Orlando Franklin. Then there are the next level of guys who they would probably want for the right price like Rahim Moore, Jacob Tamme, Virgil Green, Will Montgomery, and a few others who will probably be cheaper. They also must address some of their holes from 2014 and replace free agents they’ll be letting go.

Manning and the Broncos in 2015

While Broncos do have cap space, they won’t if they want to sign Thomas, Thomas and Knighton. At the end of 2014, they had $107.3 million, or 76.6%, of their 2015 cap locked in. Demaryius or Julius will be franchised for $12.8 or $8.33 million, so after that, the Broncos will be between $115.63 and $120.1 million.

Which leaves about $20 to 25 million for the entire rest of their team, including whichever Thomas they didn’t sign and Terrance Knighton. Considering the rate of the franchise tags, resigning all three near that rate for their talent would put them at $138-140 million. Considering that Julius Thomas reportedly turned down an offer that would pay him $8 million a year, he might cost even more that that franchise tag. I think that the weak tight end class this year also increases Thomas’ contract.

So with the cap about to be set between $140-143 million, they’re right there before they sign guys like Brandon Marshall, Orlando Franklin, Will Montgomery, Rahim Moore, any other positions they want to address and their draft picks.

If Manning wants all three of those key pieces to their success and more, then something must be done about his contract.

As Jason and I have both researched here on Over The Cap, the highest QB cap charge, the highest single cap charge of the salary cap era for a Super Bowl winner was Steve Young in 1994 when he took up 13.08% of the salary cap. As seen in the figure below, Manning’s 2015 cap hit will be two percentage points above that. Considering this is an era of quarterbacks, I think it increases how much better Manning has to be than Young to justify the increase in cap percentage.

Figure 12: 2015 Broncos Top 10 Cap Hits

2015 Broncos

What’s more interesting to me is that in 2006 with the Colts, Manning took up 10.36% of the cap. He played the best football of his career in 2013 and was on a great pace this year before Julius Thomas went down, but is he 50% better at 39 in 2015 than he was at 30 in 2006? Is he that much better than Steve Young was at 33? That’s what the cap numbers say to me. To win a Super Bowl, the cap numbers are telling Peyton Manning that he has to be the most valuable quarterback in the history of the salary cap era.

What also sticks out when looking at their Top 10 cap charges is that they’re taking up about 60% of the salary cap without signing three guys who will end up in their Top 10. Manning’s huge cap number throws off the rest of the roster.

Figure 13: Super Bowl Top Cap Charges

Super Bowl Top Charges

As you see from the figure above, Manning’s cap number knocks the Broncos off the average charges of Super Bowl champs. The 2013 Seahawks’ Top 10 took up the most cap space of all Super Bowl teams with 61.31% with the 2012 Ravens second with 56.72%. As Jason and I have pointed out, the Seahawks were so out of the ordinary that you can’t measure most teams against them, with Russell Wilson taking up less than a percent of the cap along with all the other high value guys on cheap rookie deals, very few teams would be able to make up the mistakes they made with their cap that year.

It’s not that it’s impossible for Manning to win a Super Bowl with these numbers, but it’s about giving himself the best chance.


I’ve discussed on OTC before I’ve always been curious to what the best way to construct a team is, so that I can help advise my future clients to take contracts that maximize their earning potential, but also give them the best chance to win. While some players surely care about the money more than winning, winning is a lot more fun and at the stage that Peyton Manning is in his career, I’m sure he wants to win one more Super Bowl.

I would never tell a fellow American, “I do think at a certain point you’ve made enough money,” but with a net worth near $165 million, I do think another Super Bowl is worth more to Manning than the few million he could lose with a pay cut or restructure. I also think that being a two-time Super Bowl champion could be worth more to him than whatever he’d lose in income this season.

Now that Brady has won four Super Bowls, he’s probably overtaken Manning in the greatest quarterback argument. The average fan isn’t going to understand that the difference between Manning and Brady’s cap number over the years could be a huge reason why Brady had more playoff success. The only year that Brady had a higher cap number than Manning was that 2006 season when Manning beat Brady in the AFC Championship.



I think that these figures show just how spectacular Manning is as a player because of the incredible things he’s accomplished statistically and in the playoffs with a seemingly insurmountable salary cap figure. I think that agents need to fully understand the value of their players to the point of the maximum percentage their client can earn, while still allowing his team to succeed.

With many of his teams over the years, over the course of an entire season, Manning can put up historic numbers and make up for his team’s inefficiencies, but I think, the extra 3.95% more than Brady that he has cost on average over his career has made a huge difference in the playoffs. Manning’s career average of 12.20% is 5.49% more than the cap percentage of the average Super Bowl starting QB. Despite only winning one Super Bowl, I think his accomplishments despite his cap numbers should be recognized.

The fact that Manning brought the Colts to a Super Bowl in 2009 while taking up 17.24% of their cap is remarkable, but also illustrative of the downfall of spending that much on one player as they were 32nd in the NFL in rushing with less than 81 yards rushing a game and they had an average defense. Remember, NFL “capology” is a young field of study, I don’t think Manning or the Colts understood that his cap percentage made things much more difficult for them.

With Tom Brady’s success last year with a relatively low cap number, he’s started to affect the entire marketplace. People are calling for Ben Roethlisberger and others to restructure their contracts to give their team the best chance to succeed, and they’re right. Tom Brady has changed the game and in a way that will help all players as there will be more money to go around.

What we are beginning to see is the quarterback bubble burst like in any marketplace. Whether it’s a financial or housing bubble, or the coming burst of the higher education bubble, a market will always correct itself. We’ve seen this at the wide receiver and cornerback positions in recent years after the huge deals for players like Mike Wallace, Percy Harvin, and Brandon Carr.

Brady and Manning are two of the greatest quarterbacks of all-time and while I think Manning is the more talented player, Brady’s biggest advantage has been his much lower cap number over his career. In speaking with Jason, we agreed that Manning and the Broncos should agree on a contract somewhere in the neighborhood of the $14 million that Tom Brady will be making in 2015. This will put his cap percentage at 10% and allow the Broncos to build a scary good team around him. That extra $7 million could allow them to resign everyone they need to and then get a big-time WR3 in a deep market, someone like Jeremy Maclin or even Michael Crabtree at a low-cost.

If Manning drops that cap number, look out.

If you have any questions or want to start up the discussion, comment below or tweet me! I’ve been in Indianapolis this week for the combine and it’s about zero degrees with a wind that shoots through your body, I literally have no idea how people lived in the north before legitimate heating existed. Do not go outside this weekend, just stay inside, watch the combine, relax and read Over The Cap. I give you permission.

Zack Moore

If you want to purchase The First Annual Caponomics: Understanding NFL Roster Building through Super Bowl Champion Salary Cap Analysis, which has analysis like this in it, please e-mail me atCaponomics@gmail.com, so that I can put you on our e-mail list for people interested in purchasing the book.

Manning Set to Return to Broncos in 2015

According to Chris Mortensen of ESPN, Peyton Manning has informed the Broncos that he intends to play football in 2015 and will not retire.  While I would imagine that John Elway and the Broncos are pleased with the news there are some who feel that the new coaching staff is not as thrilled with the return of an aging Manning. So let’s take a quick look at what this means for Denver.

With Manning intending to return his roster status is now completely up to the Broncos front office. The Broncos will have about one month to determine if they want to keep Manning or relase him from his contract. Manning is due to make $19 million in salary, which is tied with Drew Brees for the most paid for any QB this season. His $21.5 million cap charge is third among QB’s, behind Tony Romo and Brees.  Manning’s $19 million salary becomes fully guaranteed on March 9. If released the team would gain $16.5 million in cap room.

The Broncos have a large number of free agents including receiver Demaryius Thomas, guard/tackle Orlando Franklin, tight end Julius Thomas, and defensive tackle Terrance Knighton. The first three names will arguably be among the higher paid players at their respective positions. The team also has to consider that pass rusher Von Miller will also be looking for a new contract as he is set for free agency in 2016. If Manning is to return the question is how much of the team do they need to keep together and at what cost?

Our estimates have the Broncos somehwere between $24 and $26 million in cap space for the year, but if an agreement is not reached with Thomas and the franchise tag is applied that number will immediately drop in half. That would limit what the team can do with the rest of the roster.

Manning only has two years remaining on his contract so they could consider a simple restruture and spread his salary out over two seasons. Reducing his salary to the minimum and converting the rest to a bonus would free up around $9.1 million. That would increase his cap hit in 2016 to over $30 million, leaving them with over $11 milion in charges to account for when they release him or he retires.

The team could also opt for more cap relief by adding additional void years to his contract. In this contract mechanism you add three seasons to the existing contract that will automatically void on a given date. The bonus money would prorate into those seasons. That strategy could save the team $14 million this year and keep his cap charge at a more reasonable $25 million in 2016. However if he retires that would cost the team nearly $17 million against the cap. (You can create your own Manning scenarios with our calculators)

Either of those moves would probably save enough for the team to franchise Thomas and re-sign some other players. How that would be received by the team, since technically it would make it easier for them to avoid long term contracts and security for his teammates, would of course be open to debate.

I know I get a lot of questions on the Tom Brady type scenario, but I can’t picture that occuring. Technically Brady never took a paycut on that contract but he gave up the opportunity for future earnings. Manning would actually have to take a pure paycut, which doesnt see logical from his standpoint.

If you have any Manning questions or possible scenarios feel free to leave them in the comments.

State of Rebuild – San Diego Chargers


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.

TelescoState of the Franchise and Front Office

The San Diego Chargers have continued to uphold their label as one of the NFL’s biggest underachievers.  After going 13-3 in 2009, the Chargers have since failed to win 10 games or make the playoffs.  Despite going 4-2 against AFC West division opponents, the Chargers finished the 2012 season a disappointing 7-9.  While not seemingly rebuilding, the Chargers did shake up the organization after another lackluster campaign in 2012.  Tom Telesco replaces longtime General Manager A.J. Smith, while Mike McCoy replaces Norv Turner as Head Coach.


Contract Strategies and Trends

With only one offseason of data, the sample size for how new GM Tom Telesco will structure his contracts is quite small.  Under former GM A.J. Smith, the Chargers rarely structured any contracts with roster or workout bonuses, with Nick Hardwick being the only player on the roster brought in by A.J. Smith not under his rookie contract receiving a roster bonus.  Hardwick is due a $500,000 roster bonus in 2013 and 2014.  Thus far, Telesco has utilized roster bonuses much more than his predecessor.  Free Agent acquisition Derek Cox is due a $300,000 roster bonus in 2014, 2015, and 2016 as part of his 4-year/$20 million deal and Dwight Freeney is also due a roster bonus of $500,000 in 2013 and $1 million in 2014 as part of his free agency deal after Melvin Ingram went down earlier this offseason with a torn ACL in his left knee.

Freeney’s $500,000 roster bonus in 2013 and $500,000 of the $1 million dollar roster bonus in 2014 are actually per game roster bonuses of $31,250 per game.  For salary cap purposes, the roster bonus is treated as a LTBE incentive.  Because Freeney played in 14 games in 2012, his 2013 roster bonus cap hit is currently $437,500 ($31,250 x 14).  This setup is an extremely team friendly mechanism for the Chargers.  The per game roster bonus works just like a standard P5 salary except the P5 is still fully guaranteed in the event of injury or deactivation while the per game roster bonus is not.  If Freeney plays all 16 games this year, his actual cap hit will be adjusted upwards after the season to the full $500,000 ($31,250 x 16) and if he plays less than 14 games, for example 0, his cap hit will be adjusted downwards after the season to $0 ($31,250 x 0).

Telesco has also been more proactive in using workout bonuses.  Last years third round pick Brandon Taylor is the only player on the roster from the A.J. Smith era who received a workout bonus.  Under Telesco, free agent acquisitions King Dunlap and Johnny Patrick, along with rookie wideout Keenan Allen, received workout bonuses in their new deals.


Philip RiversBiggest Upcoming Roster Decision

Is Philip Rivers still the future of the Chargers?  Once regarded as one of the bright young superstars under center in the NFL, Rivers has come under increased scrutiny after back-to-back subpar seasons.  With two years and just under $31 million left on his current deal, it would appear at first that Telesco’s hands are tied with his options at quarterback.  A closer look reveals that it’s quite an easy feat to accomplish if Telesco wanted to move on from Rivers and hand pick his own quarterback after the 2013 season.  Rivers has a cap hit of $15 million in 2014 and $15.75 million in 2015 but nearly all of the money in both years is unguaranteed P5 salary.  With only a $1.2 million hit of dead money in 2014 and no dead money hit in 2015, the cap effects of moving on from Rivers after 2013 would be negligible.

However, barring a catastrophic injury or an incredibly disappointing season, I do not see the Chargers moving on from Rivers.  An inept offensive line has failed to give Rivers a clean pocket consistently or provide any sort of viable running game.  If incoming first rounder D.J. Fluker can lock down the Right Tackle position and allow Jeromey Clary who struggled at Right Tackle to help shore up the Right Guard position, the right side of the offensive line might actually become a strength of this team rather than one of its biggest weaknesses.  With the potential upgrade to even adequate offensive line play, Rivers should look more like the top-tier quarterback we are accustomed to and less like the mediocre version we have watched over the past two seasons, making Telesco’s possible decision easy.

It is worth noting that Telesco is no stranger to franchise altering quarterback decisions.  During Telesco’s first season as an area scout with the Colts in 1998, the Colts drafted now division rival quarterback Peyton Manning 1st overall and was also part of the decision making process that landed 1st overall pick Andrew Luck in Indianapolis in 2012 before Telesco joined the Chargers this year.  While I do not think Telesco ultimately moves on from Rivers after the 2013 season, it is certainly an available option.

Ryan Feder
Tulane University Law School
J.D. Candidate 2015

Super Bowl Rings and the Overpricing of the Quarterback

With Tiki Barber taking to the airwaves again to make his latest outlandish statements, it immediately brings up the more modern TV made argument of just how important a Super Bowl ring is to the legacy of the QB. Since then its grown to become a difference maker in salaries and contracts for QBs who have outdistanced everyone else in the game by a wide margin now because of the correlation that is expected between QB and SB titles. Seems like a good topic.

To be honest I don’t really recall the “he just wins” argument being a big deal when I grew up in the 1980s and 1990s. Obviously Montana would be the guy who won, but Montana also put up good stats for that era, specifically in the defense dominated NFC. He was  a perennial Pro Bowl guy  and was always in the upper 20’s in his Touchdowns when healthy.

I don’t recall (and maybe its just from being too young) people killing Dan Marino and John Elway on TV. I remember people talking about both as two of the greatest QB’s of all time. It wasn’t until much later on that I would hear people bringing up Elway’s Super Bowl wins as reasons that he was one of the best 3 or 4 of all time, which is a ridiculous argument since the Elway of the late 90’s was the one being carried to a title whereas the Elway of the 80s was the guy carrying really bad teams to title games, where the team would get exposed for being awful.

I don’t recall anyone putting Terry Bradshaw’s name on the list of greatest of all time. Hall of Famer sure, but whenever people talk of best ever does his name pop up?  Not really, despite all the Super Bowl success. Even Troy Aikman, leader of the famed 90’s Cowboys, doesn’t get brought up as the greatest ever because statistically he did not produce to the same level as other players of his time. If Aikman or Bradshaw played now they would not just be Hall of Famers but considered among the greatest to play the game because of the way the criteria changed at some point.

I always felt that the change in QB evaluation metrics came with the Patriots second Super Bowl Championship. ESPN or other media outlets wanted to create an argument that Tom Brady was better than Peyton Manning. Manning was the far more polished player, being drafted number 1 overall in 1998 and being considered the perfect prospect. Brady was an unknown playing for a defensive minded coach who was a failure in his first stint as a head coach in the NFL.

Statistically there was no comparison. Manning was consistently at 4,200 yards on a high powered offense that averaged 26 points a game. Brady was a 3,600 yard guy on a team around 22 points a game from 2001-2003. In 2003 they beat the Colts two times and in 2004, again, came out with another two victories. By the end of the 2004 season Brady was a bonafide playoff superstar and Manning was anything but. The debate was strictly turned to rings.

From that point forward playoff success has gone from the media right into the negotiating room. The ring became the biggest money maker in all of the NFL. In the pre-rings era players like Mark Rypien, Brad Johnson, Jay Schroder, Jeff Hostetler, Jim McMahon, Jim Plunkett, Ken Stabler, and so many more didn’t break the bank off a Super Bowl. In many cases they had to fight for long term job security and are more or less footnotes in history, rather than legends.

Teams now put so much value on that ring. Ben Roethlisberger and Eli Manning only had one championship when they were made the highest paid players at the position. Not multiple rings, just one. I think we all tend to forget that Drew Brees, Aaron Rodgers, and Peyton only have one title each. Joe Flacco joined that club this season. Brees, Rodgers, and P. Manning are prolific passers but look at the difference in treatment Brees gets compared to a Tony Romo type, who in a different generation would probably be looked up very differently.

The question should be if teams better off by paying QB’s for past rings and past success at the current price levels we are seeing?  Brady may go down as one of the best QBs to play the game in part based on the fact that he has 3 Super Bowls. But when Brady put his name into the statistical arguments as well as “ring” argument how many does he have?  The answer is none. Brady the superstar Manning-esque level player  has lost two times. Manning got back once. Brees and Rodgers haven’t returned.

When I did a more statistical valuation of the QB marketplace the one clear this is that the market is overpaid based on actual production compared to an average player level. The difference is price is really attributed to past success and perceptions of future success. Is it worth it?  It is a debatable question. Here is the annual salary estimates presented as a percentage of the salary cap for the Super Bowl winning QBs from 2000-2012. For the uncapped year I assumed a cap of $129 million which was the expected number based on cap growth in the prior CBA.



% Cap (based on APY)





E. Manning












E. Manning



P. Manning




















The two highest cap eaters were the Manning brothers, with Roethlisberger being the only other player whose APY at the time ate up more than 10% of the unadjusted salary cap. It should be noted that both Eli and Roethlisberger were on extensions that allowed the total cap to be less than the new money APY used in these estimates.  They would be closer to the 11% mark looking at total contract value.

With the increased emphasis on rings the market has skyrocketed for the QB. In 2009 Manning’s Super Bowl driven APY was $16.25 million, highest in the NFL. Now that number only ranks 7th in the league.  Considering the way the cap has retreated to 2009 levels the positional spending on the QB has now spiked to incredible levels because of the “ring” part of the equation, except the highest prices are not necessarily providing more rings. Resources have to be moved out of other spots on a team to now pay for the QB. Here are the players that rank above the median Super Bowl champion in terms of cap percentage ( 7.88%) and their percentage of the current years salary cap:


% Cap            (based on APY)







P. Manning






E. Manning


















If any of the first six names win a championship this season it would represent the highest percentage of cap spent on a QB contract since 2000. The first 12 names all represent numbers greater than 10%, a feat only achieved by three players.

Teams are focusing on the wrong things with the QB payscale and it’s most likely the reason why a team like the Patriots pulled Brady back so much. For as great as he is his salary level was unsustainable if you are looking to build a complete team to win a championship.

With a good crop of young QB’s now in the NFL under a low wage system you will continue to see the trends of the lower cost player winning championships while those with the big money items struggle to find balance on their football teams. It is going to put teams at a competitive disadvantage, at least for the long term, with the overspending on a past Super Bowl on a team constructed with far less spend on the QB position.


Vesting vs Full Guarantees Focusing on the Broncos and Ryan Clady


One of our Twitter buddies had the following tidbit regarding Ryan Clady and his contract discussions:

On the surface that seems like a no-brainer of a contract for Clady. An $11 million APY in this market with $33 million guaranteed is a heist for the player. But whenever you see reports like this the first thing that should come into mind is whether the guarantees are real guarantees or not?

Guaranteed salary can take on many forms, only one type of which is truly guaranteed. We touch on this more in depth in our Caponomics videos, but the basics are that in the NFL you can be cut for skill, injury, or salary cap reasoning. Unless upon signing your salary is guaranteed for all three terminations the guarantees are nothing more than fancy words designed to make a deal sound amazing in the press when in reality the deal may be worth nothing close to the reported numbers.

The Broncos in particular rarely seem to fully guarantee players salary. They often use a “vesting” mechanism in which the player will convert a partial guarantee into a full guarantee by meeting some condition, typically being on the roster on a certain date. The vesting guarantees can be long horizon (more team friendly) or short horizon (more player friendly).  In the Broncos case it is normally the latter.  The structure of such guarantees are of even more importance when dealing with the Broncos who do not usually give their players large signing bonuses, which act as a deterrent towards early release due to salary cap implications.

So how do these deals work in practice?  We can first look at Peyton Manning who received a $96 million dollar contract. Technically the deal contains $96 million in guarantees, but the reality was just the first season was guaranteed. If released after that season and before the trigger event Manning would not have received another penny. To trigger his guarantees Manning has to pass a physical before the 2013 LY which activated $40 million in full guarantees, unless an injury occurs related to his original neck injury.  In 2015 and 2016 he has the ability to lock in yearly guarantees by passing a physical. This was both a player friendly structure (frontside) and team friendly (backside) with the rolling guarantee structure.

Wes Welker signed a 2 year $12 million dollar contract that was reported to be 100% guaranteed. That was only the case in regards to injury.  If Welker makes it thru the season in one piece and is released prior to the start of the 2014 League Year the Broncos will not owe him a penny. He needs to be on the roster to activate his guarantee.

Former Bronco Elvis Dumervil received tremendous press coverage when it was reported that his contract contained over $43 million in guaranteed money. As things turned out most of those guarantees were against injury only with him required to be on the roster every year for the guarantees to really mean anything. Dumervil missed out on $12 million in 2013 when he was released before the vesting date. Dumervil’s contract was incredibly team friendly.

So as we turn to Clady the question is just how much of the $33 million will be truly guaranteed and how much will need to be earned?  I would think it is doubtful that it would be fully guaranteed as the Broncos simply do not concede on that point. On top of that there is considerable precedence at the position. Joe Thomas,  D’Brickashaw Ferguson, Jake Long, and Duane Brown all have partial guaranteed contracts with possibilities of earning full guarantees along the way. None had their deals fully guaranteed upon signing.

Thomas’ deal could be a good starting point for an idea of potential structures.  Thomas’ contract was reported to contain $44 million in guaranteed money. The only amount fully guaranteed upon signing was a $6 million dollar signing bonus, $4 million roster bonus, and $8 million dollar Paragraph 5 salary. Another $20.5 million was guaranteed for injury and would become fully guaranteed by being on the roster a few days following the Super Bowl each year, a date that is considered more player friendly that dates pushing into the actual league year. $5.5 million was only guaranteed for injury.

Using that same structure and eliminating the portion of the guarantee that simply doesn’t vest we can get a signing bonus around $5 million and $10 million in fully guaranteed money that will be paid out in 2013. His 2014 salary would be $9.3 million and 2015 salary would be $8.7 million, both of which would be guaranteed for injury only and converted to full guarantees if he is on the roster in February of each year. Using that structure Clady’s cap charges would be $11 million, $10.3 million, and $9.7 million with backend charges of $11.5 and $12.5 million. His dead money in those last two years would only be $2 million and $1 million respectively which would fit in with the Broncos current Manning window.

So I’ll be very interested to see how it all breaks down, but I would not be surprised if its something similar to what I have outlined above.I think the key is just how much money they can push the Broncos on in the first two years. Those are two seasons where the guarantees are most likely to be realized. If Denver tries to push more vesting guarantees into 2015 then it is a deal Clady may reject unless he can earn those guarantees by being on the roster in 2014 rather than 2015.