Hardik Sanghavi


Recent Posts by Hardik

Trends with 5th Year Options With 2017 Rookie Decisions Looming

           The deadline for teams to exercise 5th year options on 1st round selections in the 2017 draft is quickly approaching. As part of the new rookie wage scale introduced in the 2011 CBA, 5th year options are included in all first-round rookie contracts. A team’s window to exercise a player’s 5th year option opens after the player’s last regular season game in his 3rd season and closes in the first week of May. If a team declines to pick up the players’ option, his contract will expire the following year. If the team picks up the option, his 5th year salary becomes guaranteed for injury and becomes fully guaranteed on the first day of the league year the following year. Salaries for 5th year options are calculated in two separate buckets: Picks 1-10 and 11-32. Players selected in the top 10 have salaries equaling the transition tag amount the year the option was exercised. Option year salaries for picks 11-32 are calculated using the average of the 3rd-25th highest salaries for the respective position. The table below illustrates option salaries for the 2017 draft class. Salaries for picks 11-32 will be updated once released by the league. 

Before looking at 5th year options for the 2017 draft class, there are some interesting trends related to its usage in recent years. In looking at the 2011-2016 draft class, fifth year options were exercised 66% of the time (40/60) on players selected in the top 10. For picks 11-32, 61% (80/131) of players saw their options exercised. However, a team exercising a 5th year option does not always lead to the player getting a second contract with the team. Of the 120 players that had their options exercised, 40% (48/120) of players did not get a second deal with their original team. Part of this is due to teams being hesitant in signing players to top of the market deals. We’ve seen this scenario with Khalil Mack, Jalen Ramsey, and most recently DeForest Buckner. There are other situations where teams become overly bullish on a player. For example, the Bears opted to pick up Leonard Floyd’s 5th year option last year, when he only had 15.5 sacks in his first 3 seasons. In 2019, Floyd didn’t have the breakout season the Bears had hoped. Since Floyd was healthy, the Bears were able to release him before the start of the 2020 league year and avoided paying any of his 5th year option. There are also scenarios where a team is bearish on the player’s future performance and decide against exercising the 5th year option, but the player ends up breaking out, with Jack Conklin and Shaw Lawson being two recent examples. After the Titans and Bills declined to pick up their 5th year options last season, both players played in contract years and reaped the benefits of having their best seasons by signing big deals in free agency.

In looking at how 5th year options have been handled from a league wide perspective, the graph above illustrates the number of 1st round picks each team had between 2011-2016 and how many fifth year options were exercised. Note that the Texans, Chargers, Falcons were the only teams that exercised options on all their selections in the noted time frame while the Seahawks were the only team that did not. The Seahawks also had the fewest 1st round selections between 2011-2016 with 3.  

Without further delay, below are my thoughts on 5th year options for the 2017 draft class.

Picks 1-10

  1. Myles Garrett- After Garrett’s reinstatement in February, he and the Browns should move past the helmet swinging incident and work towards an extension. Garrett has 30 sacks in his first three season and was averaging a sack/game in 2019.
  2. Mitch Trubisky- Trading for Nick Foles makes it more unlikely that the Bears will pick up Trubisky’s option. If the Bears do exercise Trubiski’s option and he struggles early into the season, the Bears should deactivate him for the remaining games to prevent injury risk and owing $24.837M in injury guarantees.          
  3. Solomon Thomas- With the emergence of Nick Bosa and investment in Dee Ford and Arik Armstead, the 49ers will not pay the DE option value of $15M for a player who only played 41% of snaps last year.
  4. Leonard Fournette– Considering the team’s roster teardown and devaluation of RBs, I don’t see the Jaguars picking up Fournette’s 5th year option. 
  5. Corey Davis- The emergence of AJ Brown and the deep WR class this year adds to the uncertainty of a 5th year option for Davis.
  6. Jamal Adams- Speculation of Adams wanting out of New York started in 2018. However, in recent months Adams cleared the air and is expecting an extension this off-season. There’s no question the Jets will pick up his option, but will he be in New York long term or will a situation similar to Mack and Ramsey play out?
  7. Mike Williams- The Chargers have formed a solid duo at the WR position with Mike Williams and Keenan Allen.  General Manager Tom Telesco publicly praised Williams at the combine and while there hasn’t been an official decision, I would expect Williams to remain with the Chargers at least through the 2021 season. 
  8. Christian McCaffrey– McCaffrey became the fourth RB to have his option exercised since 2011 and the third to get an extension thereafter.
  9. John Ross– While 2019 was his best season, Ross has missed close to 40% of games in his first three seasons due to injury. It would be risky for the Bengals to exercise their option on Ross and I don’t expect it to happen.
  10. Patrick Mahomes– The easiest decision in the history of decisions on fifth year options.  

Picks 11-32

  1. Marshon Lattimore- The Saints picked up Lattimore’s option last month. The next step will be to negotiate an extension for the 2-time pro bowler and 2017 AP Defensive Rookie of the Year. 
  2. Deshaun Watson– The Texans have their first true franchise QB and he shouldn’t be going anywhere anytime soon.
  3. Haason Reddick- The Cardinals have tried Reddick at multiple positions and the production probably won’t be enough to warrant the salary of a 5th year option.
  4. Derek Barnett- Philly is currently 5th in league spending for defensive linemen and currently project to have the most invested towards the positional group next year. The team may prefer to have Barnett play 2020 under a contract year before making any commitments.
  5. Malik Hooker- While Hooker hasn’t forced the number of turnovers the Colts may have hoped for when drafting him, he’s been a solid player for their secondary and should remain in Indy at least until 2021.
  6. Marlon Humphrey- The Ravens will be picking up Humphrey’s fifth-year optionas he’s coming off his first Pro Bowl appearance. Locking him up long-term should be the next step.
  7. Jonathan Allen- Despite the Redskins having one of the worst defenses in the league last year, Allen’s likely done enough for the Redskins to pick up his option.
  8. Adoree’ Jackson- One of two decisions that the Titans will have to make this year on 5th year options. Unlike Corey Davis, I believe the Titans will pick up the option on Jackson.
  9. O.J. Howard- General Manager Jason Licht stated the team will likely pick up the option on Howard.
  10.  Garett Bolles- John Elway has been non-committal on Bolles’ option and stated the team will decide on whether to pick up the option after the draft. Furthermore, Elway isn’t afraid to admit draft mistakes as they’ve declined 5th year options 3 out of 5 times. It seems as if Bolles will make it 4 out of 6.
  11. Jarrad Davis- Davis played in 57% of snaps last season and was graded 94th out of 99 on PFF. The Lions will probably let Davis head into 2020 as his contract year.
  12. Charles Harris- Harris has only had 3.5 sacks in his first three seasons and was a healthy scratch twice last year. The Dolphins won’t be exercising his option.
  13. Evan Engram- Giants General Manager David Gettleman has yet to exercise 5th year options on the first rounders he inherited after joining the Giants in late 2017. However, things could change this year. Gettleman recently included Engram as part of the roster’s “good young players.”
  14. Gareon Conley– The Texans traded a 3rd round pick for Conley last season and while Bill O’Brien has praised Conley’s play, his production probably won’t align with the value of the 5th year option.
  15.  Jabrill Peppers- Giants General Manager David Gettleman also included Jabrill Peppers as one of the roster’s “good young players.” Furthermore, Peppers was acquired in a trade by Gettleman which can only help the case for his option to be exercised.  
  16. Takkarist McKinley- The Falcons announced they will not be picking up McKinley’s fifth-year option. This marks the first time they’ve decided to not pick up a player’s fifth-year option.
  17. Tre’Davious White- White is number one on general manger Brandon Beane’s list of extensions to get done.
  18. Taco Charlton– It’s likely Taco will not see his option picked up by the Dolphins given his limited playtime last season and the team’s signing of Shaq Lawson and Emanuel Ogbah.
  19. David Njoku- New general manager Andrew Berry hinted at the Browns picking up Njoku’s option. New HC Kevin Stefanski is know for his two tight end sets and Njoku is expected to have a prominent role on the Browns offense.
  20. T.J. Watt– A no-brainer and will eventually become the highest or one of the highest paid edge rushers. 
  21. Reuben Foster– The 49ers waived Foster in 2018 and the Redskins claimed him so his rookie contract never expired and is eligible for a fifth year option. However, coming off a major knee injury makes it unlikely that the team would exercise an option that is guaranteed for injury.
  22.  Ryan Ramcyk- Last month, Ramcyk became the first player ever selected last in the first round to get his option picked up.

Week 1 Free Agency Thoughts

It has only been a week since the start of the NFL’s version of the free market and already many teams have reached their pinnacle in spending for the season. Through the first week of free agency, league wide spending is approx. $2.610B. Of the $2.610B in spending, approx. $1.481B counts towards total guarantees. As a disclaimer, these are fluid numbers based on contract data retrieved by Overthecap and excludes extensions, extensions via trades, and franchise/transition tags. The graph below breaks down league spending from all 32 teams by total contract value and total guarantees.

The top 5 teams that have currently spent the most in total contract value are the Dolphins, Saints, Cowboys, Titans, and Lions. The Dolphins key decision maker, Chris Grier, has not shied away from leaving his print on the roster. After trading away several foundational pieces last season, Grier has acquired 9 new players through free agency and will have 14 draft picks in the upcoming draft. Much of his talent evaluation skills and decision-making ability will be judged over the next two years.

Looking at the Saints free agency spending, the drivers here are the Brees and Peat deals that total $107M. While both players were on the roster last year, Overthecap is categorizing these as free agent deals versus extensions as their previous deals expired. Regarding Peat’s new deal, he’s now the 3rd highest paid Left Guard by APY and has the highest in total guarantees in the LG market. The deal also includes a favorable structure for Peat as his 3rd year salary vests into full guarantees in the 2nd year of his deal. Essentially, Peat gets $23M of the $57.5M guaranteed at signing. In 2021, if Peat is on the Saints roster on March 20th, he will be guaranteed an additional $10.850M for 2022. That being said, Peat is pretty much a lock to be with the Saints until at least 2022.

Thoughts on Amari Cooper

Heading into free agency, there was much anticipation on how the Dallas Cowboys would approach negotiations with their key free agents. Shortly after applying the exclusive franchise tag on Dak Prescott, the Cowboys were able to reach an agreement with Amari Cooper on a 5 year, $100M deal, making him the second highest paid WR behind Julio Jones. However, the team can easily move on from Cooper after two years. The deal is structured in a way where Cooper gets $40M fully guaranteed at signing, paid over the first two years, with an additional $20M serving as injury protection. In the third year of the deal, 2022, if Cooper is on the roster on the 5th day of the league year, the $20M injury protection vests to a full guarantee. While this is a nice deal for Cooper, a player with his leverage typically sees a more favorable structure. At minimum, Cooper should have gotten a portion of his 3rd year salary guaranteed at signing. Instead, it’s essentially a 2 year, $40M deal and then a “we’ll see” situation. An explanation for why Cooper might have decided to accept the deal is that he weighed other factors. He’s playing in a state with no income tax and in an offense that has stability at the QB position. There were reports that the Washington Redskins had shown interest in Cooper and even if they were ready to offer a better structure, perhaps Cooper valued stability more than making a couple extra million. Every player is going to have a list of priorities when entering the open market and it’s plausible to think Cooper’s football earnings of $36M to date enabled him to consider other factors.

Thoughts on DeForest Buckner

One move that seems to have fallen under the radar in the last week is the DeForest Buckner trade. Heading into free agency, the 49ers had a decision to make on Arik Armstead. Armstead, who came into the league a year prior to Buckner, played out his 5th year team option and was scheduled to be a free agent. On the first day of the NFL’s legal tampering window, the team rewarded Armstead with a 5 year $85M contract. With already so much invested in Dee Ford and the future spending on Nick Bosa, the 49ers likely knew it would be difficult to keep Buckner. However, the team could have gotten one more year out of Buckner under the 5th year option, similar to what they did with Armstead. Instead, Buckner was able to leverage a position strong enough to be traded for a first-round pick and get an extension that makes him the second highest paid interior defensive lineman and tied for 3rd highest defensive player, per the APY metric. It was a true win-win for both player and team. The 49ers got a first-round pick for a player they wouldn’t have been able to afford after this year while Buckner doesn’t have to incur an additional year of injury risk to get a top of the market deal. The Colts also get the dominant interior disrupter that is coveted in the league.  

Thoughts on Kenyan Drake

Another interesting story over the last week relates to Kenyan Drake’s signing of the transition tag. On March 16th the Arizona Cardinals applied the transition tag on running back, Kenyan Drake, with the ability to rescind at any time before he signed the tag. The transition tag works similar to the franchise tag in that it ties a player to the team for an additional year. The transition tag value, however, is less than the exclusive and non-exclusive tags. Furthermore, another team can make an offer-sheet to the player and the incumbent team would have the option to match. If the incumbent team doesn’t match, the player can sign with the new team and the incumbent team doesn’t receive draft compensation. So long story short, the Cardinals were indirectly allowing Drake to test the market on a long-term deal. What’s interesting, and a point that Mike Florio of PFT raised in his podcast, is that days after the transition tag was applied on Drake, the running back market saw Todd Gurley agree to a $6M deal with the Falcons and Melvin Gordon sign a 2 year deal, averaging $8M per year. The transition tag for Drake is $8.483M. With Gurley and Gordon being more accomplished RBs than Drake, the Cardinals could have rescinded the tag, pointing to the value being too high for him. Drake was smart enough to realize the deal he had was solid and signed his tag the day after the Gurley and Gordon deals were announced. 

Thoughts on Workout Bonuses

                        Teams often negotiate workout bonuses in player contracts to entice players to workout at team facilities during the off-season. Small market teams like the Packers, Bengals, Panthers, and Jaguars will use this structure and will payout if a player participates in 90% (negotiable) of the off-season program.  Given the current conditions in society, the question arises on whether players will be able to recoup their workout bonuses if the impact of COVID-19 crisis continues and team facilities remain closed through the off-season. Assuming facilities remain closed, there’s a chance that workout bonuses wouldn’t be paid out as many payouts are contingent on there being a workout program (some players do have workout bonuses protected by guaranteed language). Assuming facilities open, but cuts into the days or weeks of the offseason program, the question will be whether teams would have good-faith and allow players to earn the full bonus if they meet the participation % for the days the off-season programs were held. Another proposition that players and agents may want to consider is to request teams to allow the player to recoup their lost workout bonuses through per-game roster bonuses throughout the season. To put some perspective on how much a player might lose if things don’t get better, Za’Darius Smith’s off-season workout bonus is $750K. It’ll be very interesting to monitor how the league will handle this situation and whether the union will need to get involved.

Thoughts on Market Growth

Per Jason Fitzgerald’s recent article, the amount of massive money deals seem down this year. Last year, there were 30 non-QBs who signed contracts that averaged at least $10M/year and 17 non-QBs who signed for at least $13M/year. This year the numbers are 27 and 11. One reason for this could be the increased use of franchise/transition tags by teams. Ten teams have applied the franchise tag this year, tied for most since 2016. In 2017, 7 players were tagged and in 2018 and 2019 6 players were given the tag. Furthermore, last year, the top of the safety and linebacker market exploded when Landon Collins and CJ Mosley reset their markets respectively. This year, a small correction has taken place in the stagnant cornerback and tight end market after Darius Slay and Austin Hooper reset their respective markets.  In regard to total spending, the below table builds off the first graph and illustrates free agent spending this year vs years in the past. Please note that these figures are based on FA spending from February-April. 2020 is asterisked as it will obviously continue to grow until April.

Thoughts on Byron Jones Contract

After a roster teardown last season, the Miami Dolphins have started the process of reconstructing their roster through free agency. In the first day of the NFL legal tampering window, the team kept busy, reaching agreements with Clayton Fejedelum, Shaq Lawson, Ereck Flowers, Kyle Van Noy, and most notably, Byron Jones. Jones’s deal is reported to be a 5-year pact worth $82.5M, with $46M guaranteed at signing. While the deal sets new benchmarks by APY, total guarantees, and fully guarantees, the cornerback market, which I wrote about in September, remains stagnant. To further elaborate, the table below illustrates several notable deals in the CB market by APY, APY as % of cap, and length.

            When looking at Jones’s deal from a dollar figure, he leads the CB market by APY, leapfrogging the incumbent and new teammate, Xavien Howard, by 9.6%. This is a solid number for Jones but if we want to understand how his deal fits in discussion with market growth for CBs, it’s important to value the deal by looking at the APY as a % of cap. This method prevents older deals from being negated because of salary cap growth. For example, while Patrick Peterson’s APY is $2.5M less than Jones’s, the extension that Peterson signed in 2014, when adjusting salaries for cap inflation, would lead the CB market with an annual value of $20.878 in 2020. So, while Jones’s deal might be perceived to be a breakthrough for the CB market, the reality is the market will remain stagnant until we see a player sign a deal with an APY valued higher than 10.5%.  Again, this isn’t to say that Jones signed a bad deal. His APY as % of cap of 8.32% sits between Josh Norman’s 9.7% figure and Trumaine Johnson’s 8.2% figure. I wouldn’t have expected Jones to get a deal near Norman’s percentage of cap as Norman was coming off an all-pro season and was arguably the best cover corner leading up to him hitting the open market. For the CB market to see significant growth, it will require a player like Jalen Ramsey or Marlon Humphrey to maximize their leverage. For Ramsey, the LA Rams gave up tons of draft capital and it would be shame for them to do so for a two-year rental. I could see Humphrey as another player getting a new deal in the future with an APY around 10.5%. He’s a player who really established himself last year and has the same representation as Patrick Peterson.

            Moving onto cashflows of Jones’s deal, the below table illustrate running cashflows for a few of Jones’s peers.

            In his first year, Jones’s contract pays out more than any cornerback with exception of Johnson’s Year 1 cashflow he received in 2018. However, where Jones’s deal separates itself is Year 2 and Year 3. The Year 3 cashflow of $54.375M is also the total guaranteed value of the deal.

Another interesting thing to look at is the sum of Jones’s and Howard’s cash flow for the 2020 season. The Dolphins will be spending $37.925M in cash for their top 2 CBs and $44.835M for all CBs on their roster. To put these number into perspective, the Ravens are second in the league in cash spending for CBs at $28.615M, per OTC numbers. The average cash spending by teams for CBs in 2020 is approx. $14.4M. Obviously this number will fluctuate as we get through the rest of FA, draft, and potential extensions, but I’d still expect the Dolphins to be at the top in CB spending for at least this year. That being said, anything short of a top 10 pass defense this season will be seen as a disappointment.            In looking at Jones’s contract structure, it is pretty player friendly. Jones will receive a $15M signing bonus, and fully guaranteed 2020 and 2021 salaries. In 2022, when Jones turns 30, Jones has a $14.375M base salary. Of that amount, $6M is already guaranteed and another $8.375M becomes guaranteed on the 5th day of the 2022 league year. That being said, if things go terrible with Jones and the Dolphins, the team can walk away from him before the 5th day of the 2022 league year and avoid paying the additional $8.375M in base salary for 2022. However, at that point, they would have paid Jones $46M for just two seasons, which would come out to an average of $23M. For Dolphins fans, lets hope that won’t be the case.

A look at the NFL Tight End Market and Potential Market Movers

Per my recent article on the NFL Cornerback Market, several NFL positional groups have experienced robust growth over the last 5 years. This growth can be attributed to star players maximizing their leverage and the 31.35% rise in salary cap since 2015.  The top 5 of the QB market has grown 57.96%, the safety market has experienced a 51.34% market boom, linebackers at 48.74%, and edge rushers at 40.34%.  

However, there are also positional groups that haven’t experienced the same modicum of success. The stagnant cornerback market was highlighted in my article and the devaluation of running backs has been discussed for several years. Another positional group experiencing sluggish growth is tight end. Since 2015, the top of the tight end market has only grown 6.91%, the lowest growth rate of all positional groups, excluding special teams. Below is a graph illustrating all the positions that haven’t kept with up with salary cap growth.

tight end salary growth

Tight End Market

In looking at the top of the tight end market, 3 of the 5 highest APY values have remained flat since 2016. This includes Jimmy Graham’s $10M APY, Travis Kelce’s $9.368M APY, and Jordan Reed’s $9.35M APY.  In fact, Graham’s $10M APY has been the benchmark for the TE Market since 2014. No other positional group has been close to having the same benchmark for such an extended period. Graham first became the highest paid TE when the Saints extended him to a 4 Year, $40M extension in 2014, eclipsing Rob Gronkowski’s 6 Year, $54M extension from 2012. Graham went on to play the entire deal with the Saints and Seahawks and became a free agent in 2018. The Packers then signed him to a 3 Year, $30M extension and Graham quickly regained the title of highest paid TE with the same $10M APY. The tables below illustrate the top 5 of the TE market by APY and Guarantees.

top 5 tight end contracts
tight end guaranteed money

Other noteworthy deals since Graham’s extension include Greg Olsen’s 2 Year, $17.1M extension with $12.115M guaranteed, Kyle Rudolph’s 5 Year, $36.5M extension with $16.025M guaranteed, and Trey Burton’s 4 Year, $32M FA deal with $22M guaranteed. While Burton’s deal didn’t crack the top 5 by APY, he eclipsed Jordan Reed’s fully guaranteed figure by $4M, setting the new benchmark in Fully Guaranteed at $18M.

Looking ahead, there are 3 players who I believe will uplift the market between now and the upcoming off-season.

Market Movers

  1. Travis Kelce

            The Kansas City Chiefs have had great success with tight ends over the last two decades. From 1997-2008, the Chiefs saw great production from Hall of Fame Tight End, Tony Gonzalez. Several years later, the Chiefs selected Travis Kelce in the 3rd round of the 2013 draft. In his first 33 regular season games, Kelce recorded 1,737 receiving yards and 10 Touchdowns. This led the Chiefs to extend him in 2016 to a 5 Year, $46.8M extension, making him the 2nd highest paid TE at time of signing. Since his extension, Kelce has continued to prove his worth. The table below illustrates his production among other top ranked TEs since 2016.

nfl tight end stats

Further illustrating Kelce’s value, the table below compares his production to WRs since 2016.  Kelce ranks 10th in Yards/G, 9th in TD/G, 11th in Targets/G, and 9th in Receptions/G.

kelce receiving stats

While Kelce will have 2 years remaining on his deal after this season, his level of production has given him the leverage to approach the team for a new deal. The Chiefs have also shown good faith in extending players with multiple years remaining as they extended Mitchell Schwartz this past off season. Regarding a value for Kelce, his representatives should make the case for high producing TEs to be paid like a low-end Tier 1/ high-end Tier 2 WR. This should put him in the $13M-14.5M APY range. Assuming the salary cap for 2020 is set around $200M, an APY between $13M-$14.5M would be between 6.5-7.25 percent of the salary cap. Kelce’s 2016 extension was 6% of the salary cap at time of signing. The highest paid TE by APY as % of signing was Rob Gronkowski and Jimmy Graham at 7.5%. Kelce’s figure should be in that ballpark.

2. Austin Hooper

The Falcons drafted Austin Hooper in the 3rd round of the 2016 NFL Draft. Coming off a Pro Bowl season last year, Hooper’s receiving totals in his first 9 games this season puts him on pace for over 1,000 yards. Hooper is a prime example of a player maximizing his future earnings by producing at the right time as he will be an Unrestricted Free Agent after this season.  It’s doubtful the Falcons will retain him as they will have major cap issues next year, as highlighted in Zack Moore’s recent article. However, Hooper will have many buyers on the open market and should easily surpass all the current benchmarks in the TE market.

3. George Kittle

George Kittle was a great find for the 49ers in the 5th round of the 2017 draft. Since entering the league, Kittle has racked up over 2400 receiving yards, ranking 3rd in TEs. His value to the offense is further validated by his 256 targets since 2017. The next closest over the same time period is Marquise Goodwin at 169 targets. While Kittle has one more year on his deal after this season, the 49ers should do an extension early as he is the focal point in their pass game. Kittle should also eclipse all the current benchmarks in the TE market.

Other Candidates

Other candidates who could uplift the TE Market include Eric Ebron and Evan Engram. After posting career highs in receiving yards and touchdowns last season, Ebron has struggled to find the same level of production this year. However, his first-round pedigree and upside will make him an attractive option for several teams during 2020 free agency. Regarding Engram, the Giants will need to decide on whether to exercise his 5th year option by the first week of May 2020. Thereafter, he’ll be eligible to sign an extension.

A Look at the NFL Cornerback Market

The market for several positional groups on defense have experienced robust growth due to salary cap growth and free agency spending.  In just the last year, the average salary for the 5 highest paid linebackers grew a bullish 36.86%. Players like C.J. Mosley and Kwon Alexander reaped the benefits of hitting free agency at the right time while non-expendable players like Bobby Wagner, Deion Jones, and Myles Jack were locked up via extensions. Elite edge rushers have also cashed in. After Khalil Mack reset the market in every major contract metric last year, Demarcus Lawrence, Frank Clark, and Trey Flowers all signed new deals this summer to contribute to the 9.07% YOY growth in the top 5 of the edge rushers market. Looking at safeties, the top of the market has already been reset twice this year. During free agency, the Washington Redskins awarded Landon Collins the title of highest paid safety with an APY value of $14M until Kevin Byard eclipsed that figure at $14.1M a few months later.  Free Agent deals of Earl Thomas and Tyrann Mathieu were also factors in uplifting the top 5 of the safety market by 15.91% over the last year. The top 5 of the cornerback market, however, hasn’t experienced nearly the same growth.

Below is a chart to compare how the average APY of the top 5 players from each defensive positional group fares with salary cap growth. For the purpose of this article, middle linebackers and 4-3 outside linebackers are considered one group. 3-4 outside linebackers and 4-3 defensive ends fall in the edge rusher group, and 3-4 defensive ends, 4-3 defensive tackles, and nose tackles are in the interior DL group.

As illustrated on the graph above, since 2015, the top of the market for safeties, linebackers, and edge rushers have experienced a faster growth rate than the salary cap. However, interior DL and cornerbacks have failed to keep up with salary cap inflation, posting growth figures of 17.57% and 9.91% respectively. Despite the interior DL Market falling behind salary cap growth, it has still shown positive signs. New benchmarks were set last year when Aaron Donald signed an extension worth an annual value of $22.5M and $86.892M in total guarantees, an 18% and 37% increase over the previous benchmarks. Additionally players Chris Jones, DeForest Buckner, and Kenny Clark will likely continue to strengthen the market. Benchmarks in the cornerback market, however, have experienced little movement.

The Cornerback Market

            Until earlier this year, Josh Norman’s $15M APY was the benchmark in the cornerback market, virtually since 2016. The exception was in 2017 when Trumaine Johnson played under a franchise tag valued at $16.742M. The next season, Johnson signed a lucrative free agent deal with the New York Jets, but Norman regained the highest paid cornerback title. This past May, the Miami Dolphins signed Pro-Bowl cornerback Xavien Howard to a 5 Year, $75.25M extension with $46M in total guarantees. While Howard’s APY of $15.05M holds as the new benchmark in the cornerback market, the growth is minimal when factoring salary cap inflation. Below is a table
comparing Howard’s and the four other currently highest paid cornerbacks by APY.

As you can see by the APY as a % of cap at signing, Howard’s APY would rank last when factoring in cap inflation. Furthermore, Norman’s contract still holds the benchmark for total guarantees at $50M. So the question is why hasn’t the cornerback market, arguably the most important position on defense, seen a stronger uplift in recent years? First, there haven’t been many upper echelon cornerbacks hit free agency.  The second point relates to Patrick Peterson’s deal. Peterson’s extension at signing was a whopping 10.53% of the cap and has essentially been set as the ceiling in the market. With Peterson arguably considered the best cornerback over the last few years, it will likely take an All-Pro or Pro Bowl caliber cornerback to broach a contract structure in the range of Peterson’s. Below are a few young cornerbacks who should spike the market.

Jalen Ramsey

The former 5th overall pick has established himself arguably as the best young cornerback in the NFL. In his 3 year career with the Jacksonville Jaguars, Ramsey has been selected to two Pro Bowls and was voted 1st Team All-Pro in 2017. It’s clear he’s the nucleus to the Jaguars defense and should be rewarded as such. Earlier this year, the Jaguars exercised the 5th year option giving team control at least through the 2020 season. However, it would be smart for the team to work towards an extension sooner rather than later. The longer a team waits to extend a good player, the more expensive it becomes. If both parties are willing to get a deal hammered out this season, I would expect Ramsey’s deal to have annual value in the ballpark of $19M, which would put the deal around 10% of salary cap and uplift the top of the market by 26%. Prolonging extension talks to next year, could put Ramsey in the $20M+ territory, assuming another year of salary cap growth and a new CBA on the horizon.

Byron Jones

            The Dallas Cowboys selected Byron Jones 27th overall in the 2015 NFL draft. In his first 3 seasons, Jones played a combination of safety and cornerback before settling as a full time cornerback last year. The new permanent position fared well in the first year. Per Pro Football Focus, in 2018, Jones was targeted by opposing quarterbacks once every 8.8 coverage snaps, ranking him as the eighth-most avoided cornerback. With Jones playing this season under the 5th Year option, Dallas will have a difficult decision to make next year. Both Dak Prescott’s and Amari Cooper’s deals expire next season as well and Jones could be the left as the odd man out.

Marcus Peters

            In his first three seasons with the Kansas Chiefs, Marcus Peters was viewed as the next best young cornerback in the NFL. He earned the 2015 AP Defense Rookie of the Year, 2 Pro Bowl nods, was voted First Team All Pro in 2016, and was a turnover machine with 19 interceptions over a 3 year span. While Peters still leads the league in interceptions, with 22, since entering the league, his play declined in his first year with the Los Angeles Rams. Per Pro Football Focus, Peters gave up over 100 receiving yards on four separate occasions. Peters’ performance did improve towards the end of the season and if he can carry that momentum as he enters the final year of his deal, he could be in for a nice payday.

Other Candidates

Other candidates who have the potential to change the landscape of the Top 5 of the cornerback market include Marshon Lattimore, Marlon Humphrey, and Tre’Davious White. All three players were selected in the first round of the 2017 NFL draft and will be eligible for a contract extension after the end of the 2019 NFL season. Furthermore, Pro Football Focus named all three players on their Top 25 NFL Players under 25 for 2019. The list is filled with impressive talent that includes Quarterback Patrick Mahomes.

Forecasting an Extension for David Johnson

The Arizona Cardinals have been in a retooling mode over the last two seasons, evident by the team’s high roster turnover and mediocre 7-8-1 and 8-8 record in 2016 and 2017 respectively. With the team drafting Josh Rosen 10th overall, the front office should now focus on developing and retaining young talent to surround the young QB. One player who fits this mold is Running Back, David Johnson.  Johnson was drafted in the 3rd round of the 2015 draft and had a solid rookie season before breaking out in 2016 with 2,100 all-purpose yards, 20 Touchdowns, and Pro-bowl and All-Pro accolades. After suffering a season-ending wrist injury the following season, he now enters the last year of his rookie deal and is looking for an extension. The Cardinals have publicly stated Johnson is a core player and look forward to rewarding him, so it’s clear both sides are motivated to hammer out a deal. The question will be at what number?

Key Points

Before determining a fair value for Johnson, there are a few points I want to discuss. The first relates to what Jason Fitzgerald wrote in his recent article, where the multiple franchise tag isn’t a good option for Johnson and the best way to maximize his earnings is by doing an extension with the Cardinals. If Johnson were to go the multiple franchise tag route, the Cardinals would have him under his current $1.907M salary and likely apply the franchise tag in 2019. During his tagged year, Johnson would be incurring injury risk while having no long-term financial commitment from the team, which is a crucial need for Running Backs given their short career span. After Johnson would play out his first franchise tag, he would either hit free agency in 2020 or be tagged for the 2nd time. If he were to hit free agency, he’d be 28 years old and teams probably wouldn’t value him the same given his age. Being tagged a 2nd time would put Johnson in similar circumstances during his first tag, where he’d have nothing guaranteed past the tag year. One might point to Johnson’s peer, Le’Veon Bell, as a RB who seems to be doing well with the multiple-franchise tag option; however, the key difference is Bell will be hitting free agency at 27, an age where teams are more likely to show the money for a Running Back vs Johnson who would be 29 after his 2nd tag. My second point relates to the Cardinals usage of Johnson. During negotiations, Johnson’s camp should look for him to be paid like a true 3-down back. During the 2016 season, his first season as the entrenched starter, Johnson had 373 total touches, which was more than any other RB that season. I would expect Johnson to continue to be the work-horse, as he’s arguably the most dynamic player on the offense and the ability of new OC, Mike McCoy, to build a system around his players. Johnson can also further his case on his value by pointing out he had the second most targets on the team in 2016, with 120 targets. The Cardinals rushing offense also struggled when Johnson wasn’t on the field, dropping from 18th to 30th from 2016 to 2017. My last point relates to the timeline of a deal. I would expect Johnson’s camp and the Cardinals to set a deadline of exactly one month before the start of the 2018 season. The CBA doesn’t credit a player with an accrued season if their holdout extends to anything less than a month before the regular season. This has huge financial consequences as a player is eligible only for Restricted Free Agency if they have less than 4 accrued seasons. Johnson would only have 3 accrued seasons with an extended holdout.

Comps

Below is a list of some of the recent RB deals and each player’s performance 2 years leading up to the deal:

One thing to note from the table above is that I’ve included Le’Veon Bell. Although he rejected the Steelers’ offer last year, it’s important to reference the offer in determining an appropriate APY for Johnson. I would expect the Cardinals’ offer to be lower as Johnson doesn’t have the same leverage that Bell did.  Bell was already tagged at a $12.12M APY figure with a second tag valued at $14.544M, with no team control thereafter. In Johnson’s case, the Cardinals theoretically have him under control for the next 3 years at roughly $27.207M, whereas the Steelers had Bell for 2 years at $26.664M at the time of their offer. In addition, when a team like the Steelers don’t guarantee anything past the first year, they need to compensate with a higher APY.  Considering the points above, below is my estimate for Johnson’s extension and how it compares to his peers:

  • 5 Year Extension worth $48.75M in new money ($9.75M APY)
  • Signing Bonus: $10M
  • Fully Guaranteed: $19.5M ($10M SB + $3.5M 2018 Base Salary + $6M 2019 Base Salary)
  • Total Guaranteed: $25.5M (Fully Guaranteed Amount + $6M 2020 Base Salary which vests on 3rd day of 2020 league year)
  • 1 Year Cash Flow: $17.593M
  • 3 Year Cash Flow: $29M

I would expect Devonta Freeman’s APY to be the starting point as Johnson is used more when healthy and has more upside. In regards to cash flow, I believe the only way the Cardinals will agree to a 3 year cash flow higher than $27.207M, the sum of Johnson’s current salary and estimates of the next 2 tag values, is if they can get more years of control. In addition, the Cardinals will likely look to do a vesting guarantee in the third year, which gives them the flexibility to move on from Johnson for any reason after just 2 seasons. This structure was also used on Tyrann Mathieu as he was cut two years into his extension before additional guarantees in his deal triggered.

Team Impact

   The table below illustrates the cap hits each year of Johnson’s deal and the cost/benefit if the Cardinals were to release him any given year. The Cardinals are approx. $14M under the cap, with a projected $44.9M next year, so I don’t anticipate Johnson’s extension causing any salary cap constraints. In addition, if the Cardinals structure Johnson’s deal as below, Johnson’s cap hit % through 2020 will never exceed 4.21%, which is a very reasonable rate for a player of Johnson’s caliber.

Final Thoughts

It’ll be interesting to see whether Johnson and the Cardinals will be able to reach an agreement in the next month. If Johnson is realistic about his value and not asking to be in the range of Le’Veon Bell’s offer from last year, I would expect a deal in the next few weeks. Assuming Johnson signs an extension in the neighborhood of what I’ve projected, he’d trade in this year’s $1.907M salary and either a shot at free agency next year or approx. an $11.5M Franchise Tag for a deal totaling $50.632M over 6 years. At signing, Johnson would be guaranteed $19.5M, which would be paid over 2 years and then the Cardinals would decide in March 2020 whether they want to continue to employ the RB or let him walk.

Hardik Sanghavi graduated from DePaul University in 2016 with a major in finance and minor in accounting. During his time at DePaul, Hardik interned with ESPN Chicago and Priority Sports & Entertainment. He now works as a Commercial Underwriter in the Insurance Industry and is a contributor on sportsagentblog.com. You can follow him on twitter at @hardiks94

Forecasting an Extension for Zack Martin

Historically, Offensive Guard has been one of the least recognized positions in football. However, over the last two seasons, the Guard Market in the NFL has been “Boomin’.” Per Jason Fitzgerald’s article in March detailing Market Movement, six contracts signed by Guards in 2017 were high enough to be valued in the top 10 at the position and the top 20 average APY for Guards increased by 23% this year. The next player that will continue to contribute to the growth of the Guard Market is Dallas Cowboys Right Guard, Zack Martin.

Current Deal

Martin signed a 4 year, $8.967M deal with the Cowboys after being selected 16th overall in the 2014 NFL Draft. His deal includes a 5th year team option, similar to all first round draft picks under the current collective bargaining agreement, which the Cowboys had no reluctance to exercise last March. Martin’s 5th year option, currently guaranteed for injury, becomes fully guaranteed on the 1st day of the 2018 league year and will pay out $9.341M in P5 Salary. However, when a player of Martin’s caliber has less than 2 years on his deal, it is smart for teams to start considering an extension as it prevents the player from testing the open market. The player benefits as he gains long-term financial security and transfers injury risk to the team.

Key Points

Before forecasting an extension for Martin there are a few points to consider. In determining an appropriate value for a player, teams and agents typically pull a list of comparable players from the player’s respective position. However, in Martin’s case, because he is regarded as one of the best Offensive Lineman, his comps should include Guards and Left Tackles as Left Tackles dominate the top of the Offensive Line Market. Second, the Cowboys have a precedent of signing their first round Offensive Lineman to long term, top of the market deals, exemplified by Tyron Smith’s and Travis Frederick’s extensions. Looking at their contract structures will be important in determining the appropriate structure for Martin. Lastly, ESPN’s Todd Archer reported Martin’s camp and the Cowboys halted contract talks in September and will resume again next off-season.  That being said, Martin will be only one year from free agency when negotiations resume, so the cash flow in Martin’s first new year should be, at minimum, the 2019 franchise tag number for Offensive Line, which is forecasted at approx. $14.2M. In addition, Martin’s APY should be based off the 2018 NFL Salary Cap. For the purpose of this article, I’m assuming it will grow at its average growth rate of 5.71% per year since 2011. That would bring the 2018 Salary Cap number to $176.54M.

Comps

Below is a list of recently signed deals in the Tackle and Guard market and each player’s performance 2 years leading up to his new deal:

Not only has Martin shown incredible toughness and durability as he has only missed 2.5% of snaps the last two years, but Martin has also earned 1st and 2nd Team All-Pro Recognition from the highly regarded football analytic site, Pro Football Focus. That being said, the $12M mark set by Kevin Zeitler in the Guard Market should be the floor in negotiations for Martin’s extension. The Cowboys could argue against this as Zeitler’s deal was done in Free Agency, where he had more leverage. However, Martin is regarded as the better player and, as previously mentioned, the Cowboys have set a precedent for their First Round Offensive Lineman, Tyron Smith and Travis Frederick, by making them the highest paid players at their position at time of signing.

Considering the points above, I project Martin’s extension:

  • 6 Year Extension worth $84.6M in new money ($14.1M APY)
  • $38M Total Guaranteed (includes signing bonus, 2018-2019 base salaries, and $6.459M of 2020 base salary guaranteed for injury.)
  • $31.541M Guaranteed at Signing (includes signing bonus, 2018-2019 base salaries)
  • $8M Signing Bonus
  • 1st Year Cash Flow: $17.341M
  • 3 Year Cash Flow: $44.541M

The table above illustrates Martin’s key metrics against his comps. As I believe Zeitler’s $12M mark should be the floor for Martin’s negotiations, the next question would be where he fits among the three highest paid Tackles. Martin is a far better player than Okung, so it should not be a surprise for Martin to get the better deal. Then comes Trent Williams and Terron Armstead, who are also better than Okung and played at elite levels leading up to their deals. That being said, I would expect Martin’s numbers to be more in line with Williams’ and Armstead’s figures. If the Cowboys aren’t willing to sign Martin to the $14.1 APY figure that I’m projecting, Martin’s side should use the argument that a $14.1M APY would only be 7.99% of the 2018 projected cap. Williams’ and Armstead’s APY were 9.21% and 8.37% of the salary cap at time of signing. Regarding Martin’s guarantee structure, although his dollar figures are higher than most of his comps, the % of guarantees to his total contract value will be lower than his peers as that would be tradeoff for having the highest APY dollar figure. However, Offensive lineman typically have longer career spans and are more likely to play out their entire deal, so compromising with a lower % guarantee for a higher APY is the route Martin should take.

Team Impact

Now that we’ve looked at Martin’s projections, it is important to see how his numbers align with his counterparts on the Cowboys Oline.

Looking at APY as % of Cap, Martin’s 7.99% is only lower than Tyron Smith’s 9.17%. The reason Smith’s number is so high relates to his deal being team friendly as illustrated by guaranteed % and the length of the extension. That being said, Dallas had to compromise by inflating Smith’s APY. The only other outlier on the table above is La’el Collins % Guaranteed and Signing Bonus percentages. This is because Collins’ recent extension reflects what he would have approximately earned on his rookie deal had he not fallen out of the draft.

In looking at Martin’s Cap Numbers throughout the deal, his cap hit will be at its peak in 2019 at a whopping $15.8M. This could lead Dallas to restructure Martin’s deal by converting a large chunk of his P5 into a signing bonus. As a result, Dallas would free up cap space in 2019, but Martin’s Dead Money figures would increase in the later years of his deal. This would make it more difficult for Dallas to release Martin later in his career.

Final Thoughts

Since entering the league in 2014, Martin has played at a high level, consistently. His first round status, dominance in the trenches, and being one year from free agency will give Martin leverage in negotiations with Cowboys Brass. This leverage should not only be used to make Martin the highest paid Guard, but the highest paid Offensive lineman by APY. The tradeoff for Martin will be to have a lower % of his deal guaranteed. However, with Martin playing a position with a longer career span, he is more likely to play his entire deal so going for a higher APY is worth the tradeoff for lower guaranteed %. I would expect both sides to reach an extension by the beginning of the 2018 League Year.

Hardik Sanghavi graduated from DePaul University in 2016 with a major in finance and minor in accounting. During his time at DePaul, Hardik interned with ESPN Chicago and Priority Sports & Entertainment. He now works as a Commercial Underwriter in the Insurance Industry and is a guest contributor on sportsagentblog.com. You can follow him on twitter at @hardiks94.