Are Receivers Headed for a Market Correction?

With free agency essentially over this is a good time to begin to recap some of the more notable stories of free agency and the first thing I wanted to look at was wide receiver, which probably the position to land with the biggest thud of all of them. Even though this was not considered a huge crop of free agents it was still surprising to see players like Robby Anderson fail to land a big contract so where may things go from here?

The realization that this might be more difficult time for wide receivers probably began when Amari Cooper went back to the Dallas Cowboys on a $20 million per year contract with $40 million in true guarantees and injury protection up to $60 million. While the $20 million number was one of the few eye popping numbers in free agency this year a closer look at the contract painted a different picture. The cash flow numbers in the early stages of the contract trailed most of the top players at the position and his three year number matches Odell Beckham while trailing Michael Thomas. The vesting schedule on his $20 million in injury protection was generally team friendly. Dallas was taken to the woodshed by many for their handling of the Cooper contract, but in the end its hard to really see them having lost much here.

While Cooper came in exactly at the projection we had I did not expect that structure at all. The projection was also based on the fact that I thought Cooper was going to be transitioned tagged which might scare people off. I figured as a pure free agent with no strings attached Cooper might get $23 million a year. I mean this was a market that just two years earlier paid Sammy Watkins $16 million a season with $30 million in true guarantees.  The alarms for everyone else should have gone off at that point and strategies changed.

Emmanuel Sanders I believe was the next to take a deal. The third contract market for productive older receivers had pretty much been set around $9-10 million and Sanders should have compared favorably to Golden Tate. Instead it was a two year deal for $8 million a year.

Anderson was expected to be the second highest paid receiver this offseason. I had him pegged around $13 million a year building off the Tyrell Williams contract from a year earlier with a boost based on the fact that not many others would be available. He sat and sat and sat before signing for two years and an effective guarantee of $12 million. It was just $500,000 a year more than former teammate Jamison Crowder received last year in free agency and less guarantees than Albert Wilson received as a free agent from Miami a few years ago.

Breshard Perriman was next at $6 million for a year. This was slightly under the $7 million number I had him at but there were people projecting far more I guess in part because last year Devin Funchess landed a one year $10 million contract from the Colts.

Somewhere in all of this the Texans completely missed the message being cast by the 31 other teams and signed Randall Cobb to a $9 million per year contract that looked bad upon signing and in hindsight has to be one of the worst contracts in all of free agency. Cobb’s contract is the only one that could be placed in the bin of somewhat crazy contracts signed in free agency in the past and this may have been the craziest outside of the Watkins contract.

So what happened here? Here are a few thoughts.

At the top of the list is that team’s learn from the past and adjust accordingly. Now when I saw learning from the past it generally means they learn from the short term past and the short term is the explosion of contracts for Watkins, Brandin Cooks, Alshon Jeffery, Tyrell Williams, Funchess, and so on…which didn’t make a ton of sense when they occurred and generally turned out to be terrible investments. We saw this same kind of scenario happen back around the time OTC was born when Mike Wallace, Percy Harvin and a few others nailed down these crazy contracts in a market that basically capped itself at just a few million more when the actual stars signed contracts a short time later.

The failures of those players had a direct impact on the receiver market the following year or two as players who were generally bigger stat guys but probably only hitting those numbers because of the offense they were in saw their market decrease in the ballpark of $3 to $4 million a year. While I think this may be a factor that explains Anderson and Sanders it does not resonate with Cooper who is a legit star.

The bigger thing is perhaps we are really seeing a leaguewide market correction. While the above scenario is usually more of a short term gut reaction scenario this is one that could have longer term consequences. In recent years the receiver market has gotten all bunched up due to a few contracts. There was a time when the true superstar receivers did receive superstar contracts that dwarfed those of other players. We don’t have that now. While Julio Jones has a stated annual contract value that comes close to the contracts of yesteryear that’s not really a legit contract and everyone know it. Basically its just a whole bunch of players between $15 and $18 million a year and then another group or two right below that all jammed together. Its not that different than how QB has been.

There are two ways to correct dysfunctional markets. One is to increase the pay at the top while stagnating the second tier players. That’s where I thought things were headed with Cooper and clearly that did not happen. The second is to see a giant market correction. This is what happened with running backs back in 2013/2014. It happened with corners around 2010 or 2011. Corners are probably more applicable to this situation than running backs.  

What occurred back then is you had a number of players that made a run at big contracts. Inflated for todays salary cap between 2009 and 2012 you had the following players sign contracts

PlayerTeamYear Signed2020 Inflated APY
Nnamdi AsomughaRaiders2009$23,036,000
Nnamdi AsomughaEagles2011$19,758,000
Darrelle RevisJets2010$17,823,000
Champ BaileyBroncos2011$17,700,000
Brent GrimesFalcons2012$16,896,000
Brandon CarrCowboys2012$16,467,000
Cortland FinneganRams2012$16,434,000
Leon HallBengals2011$16,054,000
Johnathan JosephTexans2011$16,054,000
Brandon FlowersChiefs2011$16,054,000
Dunta RobinsonTexans2009$16,045,000
Charles WoodsonPackers2010$14,950,000
Dunta RobinsonFalcons2010$14,596,000
DeAngelo HallRedskins2009$14,502,000
Dunta RobinsonFalcons2012$14,175,000
Jason McCourtyTitans2012$14,147,000

Some of those players were good but most were not. The Carr/Finnegan deals were probably the straw that broke the camels back. Eventually there was a big correction and the cornerback position never recovered.

Part of that is I think more and more teams not only realized the variance in the performance of the corner especially as they got older but that investing too much in one player simply was not getting the job done in a league where teams feature multiple targets in the passing game. Perhaps teams are realizing the same about receivers.

The dominant receiver I think can make the great QB like a Patrick Mahomes close to unstoppable, but ultimately it’s the QB that defines the result. There are players like a Kirk Cousins that likely benefit the most from having “good” receivers that might make life a little easier on him and don’t make too many mistakes but the majority of QBs at the moment are unproven at best and Im not sure they benefit.

Part of the ramp up in the receiver market has been the idea that the young QB in the NFL needs a “name” receiver to make things easier. Has it really worked though?  Did Jared Goff become a superstar because he had Cooks?  Did Wentz develop more because of Jeffery? Did any of the JAGs that DeAndre Hopkins played with before Watson magically become good QBs? Why cant Jameis Winston get a job despite playing with multiple high end wide outs? Allen Robinson is a great receiver but he can only do so much for a QB that throws the ball 10 feet over his head or hits him in the feet like they are playing dodgeball. Mahomes was going to be great regardless of who his receivers were. Trubisky was going to be bad regardless of who his receiver was. Sure you want those unproven QBs to have as many tools at their disposal but at what cost? Maybe the whole market will start to drop with the exception of the few stars.

There has been some chatter that a deep draft class at receiver plays a role too and its probably accurate for all but Cooper. While I think you can argue with how the position overall has been valued in terms of contracts the NFL is pretty good at paying players who produce at the position.

I turned to our OTC valuation metric to see where we valued players when grouped by their actual contract annual value. For those who are not familiar with it, our valuation metric attempts to redistribute the salaries at a position based on performance. In the case of receivers it is tied to playing time, PFF grades, raw receiving stats, and production over average expectation.

Salary RangeAvg. OTC ValuationPlayer Count
$10 to $15M$8,527,28614
$7 to $10M$4,812,46213
$4 to $7M$4,952,73315
$2.5 to $4M$3,908,20015
$1.5 to $2.5M$3,249,58817
$1 to $1.5M$4,712,53813
$750K to $1M$3,704,78323
Under $750K$1,784,40040

In general, the market is more or less efficient at the top with the real overvaluation coming in the $7 to $10M range. Essentially you can get similar performance from lower salary ranges most of which are occupied by draft picks. Expecting to draft a better, cheaper Anderson, Perriman, Sanders, etc.. is probably a viable route to take. It is not a route to take to find a better Cooper. Maybe you luck into it but the odds are against it.

So this year may be a blip and mean nothing but I think its worth watching closely to see if there is a move to just keep a few receivers at a higher number and start to drop players at most salary ranges by a few million to better reflect the return on investment teams are seeing.