Adrian Peterson’s contract situation offers an interesting case of the tradeoff between contractual risk, potential for surplus value, and optionality. Even after Peterson’s 2016 salary becomes guaranteed and his roster bonus vests on the 3rd day of the league year, Peterson holds all of the contractual risk for 2017. This risk is coupled with a very high potential for surplus value ($18 million worth of compensation) and only one year worth of lost optionality. The team faces no contractual risk beyond 2016, but it has very little chance for surplus value and only one year of optionality. There may be an opportunity for the Vikings and Peterson to agree on a renegotiation that reduces the risk for Peterson in 2017 and beyond (i.e. some amount of guaranteed money) while providing the Vikings with more potential for surplus value (i.e. compensation less than $18 million) and greater optionality (i.e. nonguaranteed season(s) in 2018 and/or 2019).
Of the 180 players in the league with a lower Expected Outcome than Cordarrelle Patterson, only Bjoern Werner (55%) of the Colts is also on a rookie contract. Players who have been traded – such as Mike Wallace – generally face lower Expected Outcomes in subsequent seasons than they would have if the trade never took place, as the acceleration of prorated signing bonus amounts onto the cap sheet of the original team leaves the contract with no potential dead money for the new team. As a result, the player has less of an allowance for decline in performance, as the new team will suffer no adverse consequences upon a release.
Expected Contract Outcomes – Expected Contract Value 2.0 utilizes an algorithm based on a player’s contract characteristics, age, position and 2015 performance to forecast probabilities as to the outcomes of contract termination decisions. The lower the Expected Outcome, the more likely the player’s contract will be terminated in 2016. A pay cut is treated as a termination. We have applied ECV 2.0 to all contracts scheduled to count $2 million or more against the 2016 salary cap with the exception of exercised 5th year rookie options. Expected Savings is the calculated by multiplying the probability a player will be released by the cap savings realized by the team upon such release.
|Player||Position||Expected Outcome||Expected Savings|
|Expected Change in Cap Room||+$28,880,329|
True Cap Space – Realizable Cap Space depicts the total amount of salary cap space potentially at the team’s disposal in 2016, and True Cap Space makes further adjustments to take into consideration amounts that are accounted for in practical terms. Most True Cap Space will be used on players currently under contract as a result of the team choosing to not release them.
|True Cap Space (2016)|
|Adjusted Salary Cap||$152,384,159|
|Prorated Signing Bonus Amounts||($17,893,379)|
|Realizable Cap Space||$134,490,780|
|Fully Guaranteed Salary||($9,963,930)|
|Minimum Salary Cap Holds||($21,600,000)|
|True Cap Space||$102,926,850|
Commitment Index – Commitment Index identifies the degree to which a team has “mortgaged its future” by measuring its net future salary cap commitments as a percentage of the average net future salary cap commitments of all teams. A Commitment Index Score of 100% is average, and a negative Commitment Index Score indicates that the team has more current salary cap space than future salary cap commitments. The Commitment Index Score of every team in the league changes to at least some degree with every transaction executed by any team in the league, so Commitment Index Score is measured as of a specific point in time (in this case, January 11, 2016).
|Commitment Index (2017+)|
|Prorated Signing Bonus Amounts||$21,271,013|
|Fully Guaranteed Salary||$5,969,662|
|Current Cap Space||($22,144,256)|
|Commitment Index Score||29%|
|League Rank (1st = Most Committed)||23rd|