The cuts continue to roll in as the Chargers have released linebacker Donald Butler. This was an expected move as Butler was set to count for nearly $9.3 million against the cap and had more or less been relegated to the bench. Butler was just two years into a big $1.8 million contract that he signed in 2014 that was one of the more unique contracts in the NFL. Butler’s contract was truly a contract within a contract that called for earning $19.8 million over the first three years of the contract with the Chargers then having an option to kick in another four years at $32 million. As things turned out he didn’t even make it through the initial contract phase. Continue reading Chargers Release Donald Butler »
Current Estimated 2016 Cap Space: $27 million
Expected 2016 Cap Space: $31.6 million
Estimated Rookie Cap: $9.315 million
Starting off the week by catching up on the San Diego Chargers
Best Contract: Danny Woodhead
Like last season I had a difficult time coming up with someone on San Diego for best contract. Because of the way the team had been managed for years there is very little that really jumps out at you as a strong contract and in many ways the current regime has not had a chance to put a stamp on their salary cap structure, good or bad. Arguably the best contract on the team is that of Eric Weddle. He is the best safety in the NFL and even at a market setting contract years ago he did not set things so on fire that it made people scratch their heads. Still it is a very player friendly contract structure that will likely force the teams hand on another contract at a time when he will likely no longer be the top level player he is now.
In the end I decided to stick with Danny Woodhead as having the best contract for the team. I was surprised that the Chargers extended Woodhead and actually thought he would have been a top trade target this summer in light of their signing of Donald Brown, but wisely the Chargers saw the value in Woodhead and kept him in the fold. What I like about Woodhead is that he is a situational type player and he embraces the situation. You never hear complains about wanting more touches, series, responsibilities, etc…He has a job that does extremely well and he doesn’t stray from that.
Now was there really a purpose to his two year extension this summer? Not really. I mean it is a nice gesture by the team to give him a $2 million raise and pay him a $3 million signing bonus in return for two more seasons, but I actually think the Chargers had a better situation with him prior to the extension. Still a $5.25 million salary over the next two seasons is very reasonable in a league where part time players are getting decent guarantees because teams think they can be a starter. They likely won’t be as productive as Woodhead despite getting the added snaps. A $2.25 and $2.5 million cap charge over the next two seasons is a relative bargain provided he stays healthy.
Worst Contract: Mike Scifres
The way I had a difficult time with the Woodhead selection above, I had an equally hard time with the worst contract selection. Last year this was easy, but they have begun to cut the waste from the team either by release or restructure, which limits the selections. In general the whole roster is filled with pretty bland contracts with nothing looking really good or bad. There are really few places to go. Jeromy Clary took a big pay cut to bring him to a reasonable level as did Eddie Royal. Jarret Johnson’s contract does not look great, but the team got a $1 million break and simply pushed a few dollars in dead money to 2015 for needed cap space in 2014.
Based on a suggestion of my friend Ian I went with Mike Scifres. Not because he is a bad player nor is his contract that out of line, but because it brings up the question of how much money should a team be spending on these positions when they have contractual and salary cap troubles, which the Chargers have clearly had for some time. Scifres did receive a signing bonus and an option bonus which does push the dead money in his contract higher than some of his peers. The decision to use this structure, in order to remain cap compliant in 2011 and 2012, left Scifres with the highest cap charges at the position in 2014 and 2015. He also provides the least savings in the event of release.
But in reality this selection is made to simply draw attention to roster management strategies. You did not need to be a genius to see where the team was headed based on a combination of payroll, age, and performance. Putting this much stock into a Punter is simply foolish. Scifres is the 8th highest ranked player by APY on the Chargers and 6th highest ranked player in terms of total contract value. He has the 6th highest and 8th highest cap charges on the Chargers roster over the next two seasons. Id think if the Chargers had a few more million to spend on positional players they would not need to scramble to restructure contracts and instead would outright cut some dead weight and bring in better players to participate in more plays than a punter.
2013’s Best and Worst Chargers Contracts:
2013 Best Contract: Danny Woodhead (See above)
2013 Worst Contract: Robert Meachem (Released before 2013 season)
Key Additions: Donald Brown ($3.5M per year), Kellen Clemens ($1.5M)
Key Re-Signings: Chad Rinehart ($2.5M per year), Darrell Stuckey ($1.9M), Reggie Walker($1M)
Key Losses: Cam Thomas (Steelers), Charlie Whitehurst (Titans)
Major Cuts: LeRon McClain ($2.5M cap savings), Derek Cox ($1.7M)
Free Agency Thoughts:
Even moreso than the Chiefs’, the Chargers offseason had almost no chance to go anywhere due to the salary cap mess than was left from the prior front office. If not for the unexpected rise in cap dollars to $133 million, San Diego was going to be in a position where they were going to have a hard time just being cap compliant in 2014.
The teams biggest move came before free agency even began with the re-signing of LB Donald Butler to what could be no more than a three year deal worth around $20 million. Because of their cap situation they had to come in with a large signing bonus, which more or less makes the three years guaranteed. Pro Football Focus did not grade Butler highly, but he was a player they wanted to bring back and this was the only way to do it. If looked at as a three year contract the yearly average is close to a fair market value.
Donald Brown ended up as one of the two highest paid running backs of the offseason and I’m not sure I really understand the signing. The team already had capable players at the position and because of the cap situation again they had to go with a relatively high signing bonus to make everything work. Unless the team is considering a trade, my gut tells me that this will lead to wasted salary cap space.
With limited cap room the team was pretty much locked into bringing back their lower cost players, some of whom are listed up top and others who were lower in cost and not listed. Given their cap situation those are all proper moves in hopes of remaining competitive as there were no chances to upgrade at the price point and most played reasonable last season. Likewise the swap of Charlie Whitehurst for he lower cost Kellen Clemens was also the right move for the team.
Besides the no-brainer cuts of LaRon McClain and Derek Cox, the Chargers were proactive in reworking the contracts of Eddie Royal and Dwight Freeney. Freeney is a high upside player that might be worth the risk, but Royal I think would have been better off being let go. Royal was unexpectedly solid last season, but I would not count on that again. I think that would have been $3.5 million better spent elsewhere. Not releasing or reworking the contract of Jeromey Clary is questionable, but perhaps that will come in the summer and was unnecessary based on their anticipated plans.
Overall Grade: C-
The Chargers were a playoff team last season which makes free agency very difficult for a team with limited resources to improve. While I disliked the signing of Brown and keeping Royal, I can’t get on their case too badly since there was little the team could do this year. One of the smart things that I think they have done is resisting the temptation to possibly rework the contracts of Philip Rivers, Antonio Gates, and Eric Weddle for cap relief. It will take another year before the new regime can really put a stamp on the team and in order to maintain that ability they need to keep the veterans on their current deals and take short term band aid contracts for the other positions.
According to the excellent Brian McIntyre, the Chargers restructured the contract of QB Philip Rivers, converting $5 million of his base salary into a signing bonus.
Chargers QB Philip Rivers restructured his contract. Cut $12M base to $7M, received $5M signing bonus. Move creates $6.7M in 2013 cap space
— Brian McIntyre (@brian_mcintyre) September 6, 2013
We updated our cap pages to reflect the move which should save the Chargers $3.33 million in cap room in 2013. The timing of the restructure seemed a bit odd, but the Chargers were a team that had limited cap space and likely needed more to function during the season. As our friend Ian pointed out on Twitter there were options to either add cap charges to other players expected to be with the team in future seasons or simply add a bit more dead money to a player few expect to be with the club in 2014. Rivers dead money charge in 2014 now jumps from just $1.2 million to $4.534 million, which is still a reasonable number if they were to trade Rivers.
Though cap carryover has always existed to some extent in the CBA, the new rules which carry over all unused dollars make restructures like this more or less meaningless in cap management unless followed by an accompanying move that compromises future cap years. Why is that the case? We’ll use Rivers as the example.
Assuming that the Chargers have determined that there is a high probability of moving on from Rivers next season you have one of two scenarios. The first is that you let him play out his contract. If he did that he would count for $17.11 million in cap charges in 2013 and $1.2 million in dead money in 2014. There would be no additional carryover. Scenario two is restructuring Rivers to have an emergency fund of cap dollars to use in 2013 in the event of injuries. His new cap saves the team $3.334 million in cap in 2013. If none of that is used it is simply carried over to 2014 as an offset to the $4.534 million dead charge, bringing the real effect right back to $1.2 million. The net effect is zero, its just deferring when the team accounts for the $3.334 million. The key is to earmark the 2013 savings only for emergency, rather than trades or un-needed extensions that do make the effects of the restructure hurt future cap years.
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.
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.
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 @RyanFeder firstname.lastname@example.org
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.
Best Contract: Danny Woodhead
The Chargers made a mess out of their contracts in the last few seasons with a number of bad decisions combined with high signing bonuses and low first year salary totals to create havoc down the line with the salary cap. You could make a strong argument that S Eric Weddle has a good contract simply because he is so much better than everyone else and the contract value between he and the next set of Safeties is not large. However, from a structural standpoint, his contract is a lot more player friendly than other deals and contains significant dead money protection and high backend cap charges that may force the Chargers into an extension before they should be doing so. Great player, but the deal favors the player too much to be a great deal for the team.
Woodhead was always an underrated player in New England. Woodhead is a pesky player that seems to hit a defense when they least expect it. He is terrific in the passing game and is a very capable change of pace running back. While Tom Brady always gets a majority of the credit for everything offense in New England, Woodhead was responsible for many of the yards that were picked up when the ball was in his hands. Based on statistics kept by Pro Football Focus he is one of the better players at the position when it comes to productive receptions out of the backfield. He has done the same things for the last 3 years and there is no reason to think he should fall apart due to a change of scenery.
The contract was incredibly low risk, with just $1 million in guarantees. If he becomes a fixture in the Chargers offense he can gain an extra $200,000, which is peanuts if he became a starter. Woodhead will only carry a $1.25 million dollar cap charge this year and cost $500,000 to release next season if they want to. Essentially it is a deal comprised of two $1.75 million dollar contracts, a better contract than some deals for less productive players on other teams. On a team needing to patch some things together for the next season or two, Woodhead is the perfect low-risk, low cost, safe signing that a team like San Diego needs.
Worst Contract: Robert Meachem
Normally when you sign what would be considered a “B” target you look for some upside before you commit significant money and guarantees. For example Brian Hartline with a 1,000 yard season in Miami or Pierre Garcon with close to 1,000 in Indianapolis before signing their contracts. While it may not be wise to give such players large contracts there is at least a justification of sorts for doing it. But when you take a player that has never approached what would be considered an “upside” season in five years in the league, especially one on a prolific offense, a warning light should at least go off in your head. In the case of the Chargers it clearly never did.
Meachem, a former first round draft pick, had high expectations coming out of college, but he was injured before his rookie year and ineffective in his second season. The “third year” light seemed to go off for Meachem in 2009 with 45 receptions and 722 yards and there seemed to be a chance that he would live up to all the potential. Instead 2009 proved to be a peak with Meachem going for about 620 yards a season on a team passing for over 4,500 yards in the next two years. Meachem never could break through to be a more valuable piece of the offense.
Somehow San Diego convinced themselves that Meachem’s failures were because there were just too many receiving targets in New Orleans which wouldn’t be the case in San Diego who was allowing superstar Vincent Jackson to walk away. Meachem was rewarded with a contract worth $6.375 million a year and an incredible $14 million guaranteed. A similar statistical player in former teammate Lance Moore signed for $4 million a year with $7 million guaranteed. That is the figure that a player like Meachem should sign for. If he breaks out you get a great contract and if not it’s not a major cap burden.
Meachem was a complete disaster last season posting career lows in receptions and yards. He could not crack the starting lineup and, with an inferior supporting cast, the Chargers should have anticipated less yards than what he had in New Orleans not more. The Chargers are stuck with Meachem this season because of the high costs associated with cutting him unless they can find someone willing to pay him a $5 million dollar base salary, which is so high because the Chargers wanted to defer charges to fit him in their salary structure last season. There is almost no chance a team is picking up his contract unless San Diego eats a portion of that $5 million prior to the trade. If traded or cut next year the contract structure will leave the Chargers with a $3.75 million dollar dead money charge in 2014. A wonderful parting gift for Chargers fans from AJ Smith.
Check out Our Other Best & Worst Contract Articles
NFC East: Dallas Cowboys (July 12)