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Just How Much Has Tom Brady Given Up In His Career

Tom Brady will get his first ever chance at free agency which of course has brought out the Brady discount discussions. The numbers get a bit insane when people get into these discussions. People look at career earnings and see Drew Brees, Peyton Manning, Matt Ryan, etc… above Brady and immediately consider that as a justification to say he’s given up close to $100M in earnings in his career. Those things completely throw out things like where a player was drafted, timing of contracts, the market at the time and so on. So let’s discuss the Brady contracts.

The first areas that should immediately be thrown out when it comes to Brady are his early career earnings. Brady, as a late round pick, essentially earned nothing as a rookie nor did he have any leverage on his early contract extension. This is in contrast to Peyton Manning, Eli Manning, and countless others who have earned more than Brady who were top picks that earned monster contracts right off the bat. Brady’s first contract in the NFL averaged just over $288,000 a year compared to Peyton who averaged $7.7 million a year. Even Drew Brees averaged just over $900,000 a year as a 2nd round pick.

Contract number two came in for Brady in 2002. This was one year after winning the Super Bowl and the Patriots deciding that Brady was their guy instead of Drew Bledsoe who the team has signed just one year earlier to a 9 year contract that averaged $10.6 million a season. Brady of course was far from established at this point in time. Brady’s deal averaged $7.4 million in new money a year but only ran four years. It’s also worth noting that Brady would have been a RFA in 2003 and that tender was in the ballpark of $1.3M. Factoring that in brings us closer to a contract that really was a three year extension worth $9.4 million and change. Regardless of how you wish to value this contract I think its fair to say that this did not represent a discount.

Contract number three came in 2005 following Brady’s third Super Bowl victory and his best season as a pro, throwing for nearly 3,700 yards and 28 touchdowns while running a much more aggressive passing game than they had played in the past. Brady and the Patriots clearly had the number of Manning and the Colts but Manning was also considered the clear cut number one QB in 2005 and anyone thinking otherwise is bringing up revisionist history. Manning in 2004 threw for an obscene 4,557 yards and 49 touchdowns. His only season throwing for less than 4,000 yards was as a rookie in 1998. Manning had signed a contract that ran for 7 seasons and averaged $14 million a year. Brady took a four year extension that averaged $12 million a season, which was $1 million a year more than Brett Favre, $1.5 million more than Steve McNair, and $3 million more than Chad Pennington (oh Jets). On a side note the actual high water mark for contracts was Carson Palmer at just under $16.2 million a year but nobody gave much credence to that contract since it was signed with four years remaining on his rookie contract and would run for 11 years in total.

Would I consider Brady underpaid?  Maybe slightly and it depends on how you view Mike Vick, who was a phenom at the time. Vick signed an extension toward the end of the 2004 season that paid him $13 million a year. While Brady should not have been paid higher than Manning I think you can argue he should have made more than Vick. There is also the years factor though and what discount that should be given. Manning and Vick were locked for seven years and Brady just four. Taking that all into account its not much of a give up by Brady.

Contract four was signed in 2010 and by this point in time Brady was not only the established “winner” from his early 2000s run but also considered right up there with Manning as the best player in the NFL. It was reflected in his contract which made him the highest paid player in the NFL at $18 million a year, about $1.75 million more a year than the other Manning who signed a year prior. Peyton, a year later, would sign for the identical $18 million a season. So unless you want to say Peyton was playing for pennies this was clearly not taking less money for the good of the team.

Contract five is where things get interesting and we do indeed get a price break. The Patriots went to Brady in 2013 and got him to agree to a super low three year contract extension in order to help them create cap space in 2013. The contract added three years at just $9 million a year. The number was so low we didn’t even value it on OTC at that number and instead just looked at it as a five year contract that averaged $11.4 million.

The concept at the time seemed to be that the Patriots were grooming a replacement for Brady. He would be 38, 39, and 40 in the extension years and the entire contract was virtually guaranteed (they would have had to cut Brady before the 2014 regular season ended to avoid paying him from 15 to 17). Plenty of quarterbacks broke down around the age of 35 so you could perhaps sell this as something reasonable though it clearly was not.

This is where things get more complicated with Brady’s contracts and the differences between salary cap management and massive discounts being taken. If you follow the cash trail, which is the most important thing for a player, Brady was set to earn $30 million in 2013 and 2014 on his original contract and wound up earning $33 million as part of the new contract. At the same time his cap number fell from $21.8M in 2013 and 14 to $13.8 and $14.8 million respectively. That’s the wackiness of the cap- get paid more but count less.

However Brady would have been looking at a new contract in 2015 had he not signed this deal and even at an older age he would have done well for himself. He essentially gave that up for $10 million in 2015 and just a few bucks in 16 and 17. Now Brady never got to the franchise tag in his career and most QBs don’t get there so to estimate how much he game up we really have to go back and look at the market in 2014, which is when he would have signed an extension. The QB market in 2014 was still pretty stagnant and showed no movement until 2016 when values started to jump past $24 million. I’d say as a rough estimate he would have come in just under Rodgers at something like $21.5 or $21.75M a year on a four year contract. That does seem like a big difference.

Still its not as cut and dry as comparing those two sets of numbers because the Patriots, other than in 2015, kept tweaking his deal to push cash forward to keep the earnings more in line with reality. First they added an extra $3M in salary to the contract starting in 2015. Then in 2016 the Patriots signed Brady to a two year extension worth $20.5 million a season. In this one he ended up earning $30 million in the “old years” that were left from his old contract (2016 and 2017) rather than the original negotiated rate of $17 million. That’s still a discount for Brady but its not as bad as it originally looked.

In 2018 the Patriots added another $5 million in incentives to the deal to give him a chance to earn $20 million rather than $15 million though he failed to earn the bonus money. In 2019 they more or less made good on it giving him an $8 million raise to bring his salary to $23 million which was somewhat in line with the $25 million that was paid to Drew Brees.

The right way to compare the contract outcomes is to look at what he likely would have earned signing a real market contract in 2015 after playing out the 2013 and 2014 years versus what he actually earned.  This table shows the estimated running cash flows that would have occurred vs what actually did occur.

Year Theoretical Actual
2013 $15,000,000 $31,000,000
2014 $30,000,000 $33,000,000
2015 $51,750,000 $41,000,000
2016 $73,500,000 $70,000,000
2017 $95,250,000 $71,000,000
2018 $117,000,000 $86,000,000
2019 $140,000,000 $109,000,000

The difference here is $31 million, with the majority of the discount coming from 2015 to 2018,  a savings of nearly $8M a year during that timeframe. The $23M he earned in 2019 matches Brees’ 2019 salary but was $2M under Brees annual contract value. So the ultimate discount he gave New England is about $33 million, maybe a few million more if you want to give him a bump for coming in under Vick early in his career.

If you compare Brady’s career starting in 2005 with Manning’s starting in 2004 (the year both signed new contracts and when Brady was considered a top line QB) its true that Manning had far better contracts but it was not until the final years of Manning’s career in Denver where he grossly pulls away from Brady. That coincides with those big discount years for Brady that began in 2014. The difference was as big as $39.4 million and wound up at $29.4 million. But its important to see how while there were always fluctuations in Manning’s favor the bottom line amount was a $9.4 million difference before the few true discount years for Brady took off.

Year Manning Brady Difference
Year 1 $35,035,000 $15,500,000 $19,535,000
Year 2 $35,700,000 $31,500,000 $4,200,000
Year 3 $45,700,000 $37,500,000 $8,200,000
Year 4 $56,700,000 $45,500,000 $11,200,000
Year 5 $68,200,000 $53,500,000 $14,700,000
Year 6 $82,200,000 $80,000,000 $2,200,000
Year 7 $98,000,000 $90,000,000 $8,000,000
Year 8 $124,400,000 $102,000,000 $22,400,000
Year 9 $142,400,000 $133,000,000 $9,400,000
Year 10 $167,400,000 $135,000,000 $32,400,000
Year 11 $182,400,000 $143,000,000 $39,400,000
Year 12 $201,400,000 $172,000,000 $29,400,000

So Brady certainly has helped out the Patriots but it hasn’t been during his entire career. For the most part it was over a three or four year period and its certainly nowhere near the numbers that seem to get thrown around that Brady has sacrificed over $60 million to help the Patriots. A lot of what the Patriots have done is to use Brady to manipulate the salary cap which makes the impact look bigger than what it is. This is a gamble that mainly paid off but very easily could have been a catastrophe like what occurred with Dallas and Tony Romo. The Patriots as it stands now may carry $13.5M for Brady if he does not return this year and that’s because of the way they have kept aggressively pushing the cap off for Brady.

The team has also used this narrative to push the “Patriot way” on other players as often team friendly aspects of a proven QB contract can easily be driven onto others on the team. Unlike Brady those players did not receive raises or new deals at various stages of their contracts. This is one of those soft benefits of what Brady did that probably had a bigger impact than the Brady “pay cuts” did on their own. You cant really measure this but I think it exists.

In hindsight Id think the Patriots strategy with Brady was to use that one contract in 2013 to get their salary cap and contracts in order with a plan in mind to keep finding ways to give Brady raises to keep him reasonably compensated during most of his time with the team. My guess is they also thought he would at some point break down and actually finish his career earning a lower salary (in the $8 to $13M range) to balance out all the prorated money that they pushed in his contract deep into his 40s. That part never really happened though.

While its fair to say that Brady never pushed the issue in his career how many quarterbacks have?  Most of the time QB contracts are fairly simple. Almost nobody gets to free agency. Few even get to the tag. We sometimes speculate about how nasty things could get but it never gets that bad. How many nasty negotiations can you think of in the last 10 years?  Kirk Cousins with the Redskins. Who else?  Maybe Brees’ first big deal with the Saints was a little testy. E. Manning, Ben Roethlisberger, and Philip Rivers all got done easy enough. No problem with Aaron Rodgers. Ditto Andrew Luck, Matt Stafford, Jared Goff, Carson Wentz, Russell Wilson and everyone else.

Regardless of what people like me say about how a player is worth so much based on his impact the fact is the QB position is paid a ton of money and they have long careers that usually span multiple contracts.  When you get into the kind of money we are talking about for the Brady’s of the world there comes a point where its all going to sound fine and they just want to get out there and play football. Its different than the other positions on the field where the job security isn’t there. Most of the good players at QB are going to play until their mid to late 30s and get paid incredibly well while also getting the majority of the endorsements in the local and national campaigns.

Brady has likely taken the biggest discount and for a majority of his career and has probably had the most chummy relationship ever with a team but this has become somewhat overblown over time.

Thoughts on the CBA Proposal

With the new CBA proposal fact sheet being released by the NFLPA yesterday I just wanted to share some initial thoughts on some of the things outlined in the sheet. It’s pretty limited in detail but since everyone is talking about it I thought it made sense for us to put something out about it sine we have written about the CBA before. So let’s look at some of the areas we can discuss and call it a good, bad or indifferent initial reaction.

  • Good: 47% of AR in 2020 plus $100M in new player costs for 2020

This essentially sounds like a raise for the season and there is little wrong with that. Any kicker over the current levels in 2020 is a good thing since there is really no alternative way to earn more this year. Its not a big raise but its not as if revenues were going up this year anyay.

  • Indifferent: Projected increase of $5 billion to players over a 10 year period

This to me sounds better on paper because the NFL wisely is using big money numbers ($5 billion!) to make their case. If we break that down into a 10 year period its $500 million per year. If we go a step further that’s an additional $15.625 million per team. If we go one step further that works out to about an added $245K per player (the NFL will employ around 2000 players during the season). I would think this is something phased in over time so it would be less now (i.e. $100M in new player costs for 2020 is much less than $500M), but effectively the cost for the 17th game is $245K per player. That does not sound nearly as impressive when stated that way versus $5 billion. Not all of this goes towards the salary cap but for the sake of argument lets say it does. There will be minimum salary increases for the players (more on that later) and I believe over the 10 year period we would be looking at an average increase of $43K per year give or take a bit. Last year about 58% of the league played on a minimum P5 so it should mean about $1.55 million of the added salary will go to the low level players per year and the vets should get about $550K extra a year for the added work. Neither of those figures are great but I wouldn’t say its terrible. However it does not seem like it would lead to an explosion of contract values which is probably what the $5 billion is supposed to make you think.

  • Good: Minimum Salary Increases

This is a great one for the players. Salaries have lagged badly in the current CBA because its 10 years and the NFL was able to stick with just $15K raises per year. From whats written this will fall in line for the rookies with what we proposed last April and while it may lag for the others this is a big step forward as is increases by what sounds like $45K per year rather than $15K per year the salaries bump now. This may not get the attention it deserves and obviously there are details missing about what the ultimate difference is from year 1 to 2 to 3 (its at $90K now for most rookie years and Im just assuming something similar) but the arly jumps and bigger yearly raises sound like a nice get for the NFLPA.

  • Indifferent: Bonus payment of up to $250K for players playing 17 games

This impacts a very small percentage of veterans (about 200 in 2021 and 125 in 2022) most of whom will either be released or extended before the 17 game cycle even hits. Could they have done better for the players currently under contract?  Yes. Does it impact so many players that it should have been a sticking point?  Probably not.

  • Bad: 90% minimum team spending

This is just a useless one. Teams are already spending on average over 100% of the cap and no team has been under 90% in any four year window. All this does is allow some teams to tank for a period of years if they feel like it. That isn’t good for the players or the NFL. If you are not getting a big revenue increase you have to do what you can to force teams to pay more. This doesn’t do it at all. It’s a joke.

  • Indifferent: Increase in RFA tenders

We’ll need more information on this but this sounds like a small gain just for this year. Id say this is neither good nor bad and again impacts a small portion of the NFL population

  • Indifferent: Minimum team spending timeframe change

The NFL is changing the spending timeframe from 4 to 3 years for the first 6 years of the CBA. This will not fundamentally change anything in the NFL. The final four years would all be tied together which is a bit of a power play, IMO, to make sure the teams have far more financial flexibility at the end of the next CBA. This may actually lean towards bad more than indifferent.

  • Indifferent: 5th year options fully guaranteed, amount tied to performance

We don’t know enough about this to really say much but fully guaranteeing the 5th year option will not impact too many players. For the most part costs are low enough on those options that teams buy into them no matter what. The players I can recall who have been released off the 5th year option before it vested are Robert Griffin, Eric Ebron, Vernon Hargreaves, and Kevin Johnson. Michael Floyd was cut after it vested. Phil Taylor was also cut after it vested though there were some oddball circumstances there. So fundamentally the guarantee will not change any decision making.

However we do not have enough info on what the raises will be and how they will be accomplished. In the old CBA there were massive escalators at the end of contracts often tied the franchise tag or a higher number. If those are possible to achieve then there could be a benefit to it. That’s why Ill say indifferent here rather than bad. We just need more info to make a judgement,

  • Good: PPE for 2nd round picks plus a Super Escalator.

Weve talked about this a lot before. 2nd rounders can get hurt by not being able to earn a pay raise while draft picks being locked into the low tender make being a UDFA potentially more appealing. My guess is this will fix this in a more equitable manner.

  • Indifferent: Injury protection to $2M for one year and $1M for 2nd year

This is a minor increase over the current amounts and not really much in the way of protection. We had suggested a $3M and $1.5M increase. There is no reason why they should not have gotten that.

  • Bad: Nothing stated about shorter rookie contracts

The biggest hold on wages in the NFL is the length of rookie deals. There are a number of players who don’t have the greatest careers whose value peaks in year 3 and 4 of their career but they are locked in at the minimums. By the time they hit free agency they are either looked at as minimum salary players or slightly above that level. If those players had the ability to become a free agent in the third year of their career they would likely lock down more money for their short careers.

  • Bad: Revenue Split at 48.5%

Like we said above the $5 billion sounds great but on a year by year basis its not a ton for that extra game. There is really no reason for this to not be a 50/50 partnership at this stage especially with the NFL franchise valuations, which have zero to do with player shares but do impact an owners wealth, generally skyrocketing.

  • Bad: Another 10 year deal

Why lock in for this long again?  There are so many changes that happen in that time and you are insulating yourself from getting to negotiate on those issues. By the time 10 years rolls around almost all the players involved with this negotiation will be gone so there is little experience on the player end at that point in doing a deal and making sure the same mistakes are not made. No reason for more than 5.

Do I think this will be passed by the union?  Probably. The benefits are there for the majority of the players and just from that perspective they will vote for it. It’s not a good deal for veteran players (or those who will make it to veteran status) because it likely caps off the growth in a similar manner as to what we see now where top line wages are barely keeping up with growth in the cap and teams have the ability to cut players pretty easily without worrying about cap ramifications. If the veterans are strongly against this then they need to communicate those concerns to the young players in a manner they can understand, especially the young players who are in line to be stars.

Ive seen some comments that this is a horrible deal. We don’t have a ton of details here but I would not agree with that. The 2011 deal was terrible. The player side took about 4 steps backwards with that deal. Here they are probably taking one and a half steps forward even if they are giving the NFL the rights to that 17th game back. Its not a good one but at least its not a step in the wrong direction one that hurt the players for 9 years. This at least corrects some of that.

The NFL has reportedly put a hard deadline on this proposal. I can understand that because the combine starts in a few days and teams need to know the rules by then to start negotiating with players. My guess is if its delayed they will have to play 2020 under the current rules and while some may say they can always delay the start of the league year really its not fair given what some teams are going to have to do with their cap and free agent decisions between now and then to work under one set of rules and then have the rug pulled at the last minute.

Still the union side should have known this was going to be a realistic deadline and done more to pull their guys together rather than a phone conference today. There is not much detail in the proposal sheet for someone to go over and players should have their agents/lawyers/ etc… looking over the actual proposed changes rather than bullet points. And maybe there will be firm direction given in that meeting that does just that but from what Ive heard most of the discussion has revolved around bullet points and the 30,000 foot overview rather than the actual details of things. There should be time taken on their end to let the players do their due diligence and form their own educated opinions on this. Im not sure if four days is enough for that.

Dead Money and Matt Stafford

I didn’t bother posting anything about the Matt Stafford contract the other day simply because I thought that it was so unlikely he would be traded that it wasn’t worth doing it, but for whatever reason yesterday we got blamed in a sense by PFT for having some incorrect numbers online regarding a trade so I wanted to set the record straight on that and explain the way that his contract likely works in the event of trade.

First of all its important to note that we do make mistakes on cap figures (this was not one of those times despite what was said) and do our best to keep them as accurate as possible. There are also at times issues with our dead money calculations. We generate those numbers pretty much on the fly and when you have contracts that do not conform to the norms (which Stafford’s does not) things can go a little haywire. Because a contract like Stafford’s is a one in a 1000 type of deal (probably more than that) to create a conditional equation for this particular situation is simply not worth the effort.

As soon as the reports came out about Stafford, which I don’t believe was first by PFT, I immediately put out a tweet that said the numbers being reported about a dead money charge of over $30 million were incorrect. Here is that tweet.

Secondly I don’t think there was one outlet of the original news stories that attributed that number to us or to Spotrac, which is the other site that tracks contract data generally by ripping from here but that’s neither here nor there at this point, so to turn around and then blame the websites for incorrect details is a bit ridiculous when you didn’t credit either of them in the first place. Still our numbers were incorrect in the dead money so here is why.

The Lions, like a number of teams late last season, made a number of contract adjustments to create cap room in 2020 in the event that the 2020 season is played under the final year of the CBA. Rules in place this year with the salary cap make it much more difficult to do the standard salary to signing bonus conversion that we see every February by teams with bad salary cap situations. So proactive teams like Detroit had to go to great lengths to modify deals at the end of the year to comply with the rules while also creating cap space in 2020.

Stafford was to earn $21.5 million on his original contract in 2020 and have a $31.5 million cap charge. What the Lions did was guarantee a $6 million roster bonus that is paid early in 2020 (the 5th day of the league year) causing it to prorate starting in 2019. They then converted part of Stafford’s salary into an option bonus which the team does not have to exercise for quite some time (basically the start of the regular season) which prorates starting in 2020. This brought his cap number down to $21.3 million.

From a technical standpoint both of these prorated figures count on the salary cap as if they were already paid and the league technically considers the roster bonus paid in 2019 (weve updated our pages to not make the same assumption). This is where the confusion comes in since if Stafford is traded the Lions did not actually pay him that money. There are relatively few examples historically where a trade happens in these instances but here is what I believe (not saying with 100% will but believe) would happen based on my understanding of the CBA.

If Stafford was traded before the roster bonus is actually paid the dead money for Stafford would be $21.2 million. This would be the prorated amount of his roster bonus this year and acceleration from his massive signing bonus from a few years back. There should be no acceleration of the roster or option since neither was paid and I don’t believe the option proration from this year would count either (they could just decline it prior to the trade to ensure it didn’t) . The deadline for this should be March 22.

Things should get a bit more complicated because if this is indeed the final league year the team should get credit on the cap immediately for money paid on the cap but not paid to the player unlike in a normal season where that comes as a cap adjustment the following season. So in this case the Lions should receive an immediate credit of $2.4 million to offset the prorated charges attributed to 2019 and 2020 for the unpaid roster bonus (if this years proration from the option remained it would also be credited). That brings the effective dead charge down to $18.8M. Again Im not saying this with 100% accuracy as this is a one in a million scenario (there has only been one other final league year cap rules and that was back in 2009) so I have little to compare it to, but I believe this is how it works.

Now if Stafford is traded after the roster bonus is paid out by Detroit the dead money increases. In this case Stafford’s dead money would be the old signing bonus money plus the prorated money from the roster bonus. This is $24.8 million, which is the number PFT mentioned in their latest article. There would be no offset number on this since the roster bonus was earned. Since the option was not yet exercised there should be no charge for that at this point.

If for some reason the Lions exercised the option and traded Stafford then you get to the full $32 million number everyone originally was going with and how its listed on OTC. That would make no sense for Detroit to do since the option timeframe is so long. If anything if the Lions have the cap space in the summer or at the end of the season I would expect them to decline the option and just take the full charge on the cap this season so waiting makes sense for them whether they truly want to trade Stafford or keep him.  

So that’s my take on how the Stafford contract unfold in the very unlikely event he is traded before or after the roster bonus is earned. I still dont see it occurring but those are the particulars in this contract.

Paying the Great QB Should Never be a Problem

The Chiefs were not even 24 hours removed from winning the Super Bowl when talk already began about Patrick Mahomes contract and what it means for the future. I didn’t want to really even discuss the Chiefs salary cap since the fans of the team should get the chance to celebrate the accomplishments of the team before even caring about the future, but we can talk about the general concept of paying the quarterback and how people are overblowing the idea that salary paid to most of the players at the position keeps you from winning.

1. QB Salaries Will Continue to Rise.

I think everyone is under the assumption that Mahomes will sign a contract worth $40 million a year which would place him at $5 million above the current NFL leader, Russell Wilson. That sounds like a lot but for how long will it seem like a lot of money? Back in 2009 Eli Manning became the top paid player at $16.25 million. By 2010 Tom Brady became the top paid and then in 2011 it was Peyton Manning. Drew Brees became the guy in 2012 and eventually the market was capped by Aaron Rodgers in 2013 until he was surpassed by Andrew Luck in 2016 until he got beat out by….Derek Carr in 2017 which led to a complete market reset and salaries jumping over $30 million per year.

I would expect Mahomes to act as the “Rodgers block” on salaries whenever he signs his contract but just like with Rodgers a ton of players came close to the Rodgers number during that 2013 to 2016 timeframe. Lets say that Mahomes signs this February for $40 million. Slot in Prescott at $36M and Watson at $37. If Jameis Winston has a crazy year hell get in that range. Kirk Cousins is a free agent next year and maybe Cam Newton returns to form. By 2021 and 2022 the Jackson class is eligible and if Jackson continues as he did last year it’s a lock he’ll surpass Mahomes. At that point Mahomes will still probably be under contract until 2026.

The point is the big QB contract is only going to be an issue if the QB contract is so much higher than the market that it puts significant pressure on your ability to re-sign other key members of the team or to target a free agent. $5 million a year isn’t really that. Its basically the decision between Mahomes at the $40M number and a situational rusher that probably comes in for 30-35% of the defensive snaps. It’s only a significant starting quality player if you are getting into the $10M+ per year excess salary department. In this case Mahomes is going to have players getting close to him and most likely would not even be the highest paid payer for most of the years he is under contract.  

2. There is Nothing Wrong with Paying a Good Quarterback

Mahomes is certainly a rare talent and there are a handful of players who are at least close to the tier that he is in. These are the drivers of winning in the NFL. The Chiefs offense was shut down last Sunday for pretty much three quarters. Mahomes hit a few big plays and they won going away against an inferior quarterbacked team. Having an elite talent at the QB is the biggest competitive advantage you can have in the NFL. You can never give that up once you find it.

The problem in the NFL is when they pay the average QB as if he is a great QB. The salary sometimes creates the perception that the player is great. Matt Stafford, Derek Carr (and I was a big Carr guy so I fell into that camp), Jared Goff, Jimmy Garoppolo, Kirk Cousins, Jacoby Brissett, etc… are not great players, yet they all have been near the top of the market at some point and that feeds into the same market issues above. At some positions a player like Aaron Donald likely maintains a big market discrepancy over most of the talent for a few years, but at QB most people come close.

These deals may hamstring a team because they over-rely on the expensive player only because he is expensive and in their case having the extra budget, whether cash or cap, to add other players is important. Garoppolo needs a lot of support. Overpaying that type of players puts you on an uneven playing field. The Mahomes level doesn’t need that level of support. You can probably pick a few players on that team (from a salary perspective lets just say Frank Clark and Sammy Watkins), pull them off and the end result is the same.  

Other teams chase the dream of the draft pick that is failing on the field and even though they are cheap you have a big edge there as well because they are wasting two or more years chasing a bad investment. You only lose that advantage if you don’t pay your great QB and end up back into the Ryan Fitzpatrick type player pool down the line.

3. There are Ways to Manipulate the Cap

While we report all contracts based on their “new money” values the fact is that the effective cap value in most cases in far lower. For the Chiefs a $40M deal for Mahomes would actually play out as a seven year contract (2 existing years at approx. $29M in cap dollars and 5 new years at $200M) that will count for less than $33M a year on the salary cap. While you can do that with most players in the market and lower their values  its would put him basically at the same exact average cap consideration as the Seahawks have with Wilson over the course of his deal and $5 million more than the Cousins/Garoppolo deals. He would likely be cheaper than Prescott who is a true free agent. This is why its imperative that teams lock up the young quarterbacks as early as they can in the process, assuming of course they know it’s the guy (the Bears would for instance be crazy to extend Trubisky)

Secondly you can always manipulate the cap. I liked the 49ers approach with Garoppolo where they decided that they would basically take their lumps all in one year with a $37M cap hit in one season and a contract that never went above $27M in any year thereafter. You can use that to give yourself flexibility if the player for some reason doesn’t pan out but more than that you can really aim to strategically use the cap numbers to coincide perhaps with other rookie contracts on the team or years when you expect other spikes to maximize your ability to spend without compromising your overall risk in a player.

4. Free Agency is Rarely the Cure-All

For the most part teams do not lose their homegrown drafted players because of a salary cap crisis. There may be the oddball team here and there but the consistent growth of the salary cap combined with smarter roster management strategies and union concessions on player contract control have made it hard to lose any player you want to keep. Teams should be able to project this pretty well these days.  Generally where the unexpected spending comes into play is in free agency where prices grow high and you cant manipulate the numbers as well unless you want to have a more chaotic cap situation in the future.

Free agency certainly adds to a team but most teams are built through the draft and all having that extra money tied up in the QB means is you have to be more successful in the draft and you cant take as many risks in free agency as before. Most teams that try to rebuild a roster in free agency drive prices and fail, usually in spectacular fashion. All the higher priced player may do is pull the team out of the mix for one of those high priced guys that they probably don’t need anyway.  The low priced QB just means you can take on some unnecessary risk at other positions. You lose that now, but its not that big of a loss.

5. Focus on Positional Drafting

Having a rookie QB will always be the biggest “moneyball” advantage a team can have. Lets assume Joe Burrow becomes a star. His contract will effectively be undervalued by about $30M per year if that happens which is huge if the team can spend it effectively. But why just focus on the savings of a QB?

Once that same team know they have to deal with the high price of the QB (which they should know by 3 years in) maybe they should be moving their draft strategy in the first and second rounds away from taking linebackers, running backs, safeties, non-rush linemen, tight ends, centers, and guards to exclusively drafting cornerbacks, edge rushers, receivers, left tackles, and defensive tackles with rush ability. If you hit on an edge rusher late in the first at $3.3M a year well that’s about $17M in value. A corner would be around $12M. A left tackle in the ballpark of $13M and so on. Hit on a few picks using that kind of strategy in two or three seasons and you just made up the obvious “competitive edge” of the cheap QB with the less obvious one of hitting on premier positions in the draft.

There are ways to build a very successful team around an expensive QB. The problem is that too often team maybe get away from doing things the right or logical way and things get out of control and optically it looks really bad. But if a team develops a strategy early in the process and does its best to stick to the strategy it should never compromise their ability to make deep playoff runs year after year.

An Offseason Guide for OTC

With the Super Bowl now complete we officially move into the NFL offseason where many contract issues come into play so its usually a good time to review some of the features we have on OTC, just so you know where to find everything if you are new to the site.

The salary cap space page gives our best estimate for cap space for every team in the NFL . Currently we have estimated rollover figures from 2019 included in the numbers as well as other adjustments that we believe will hit each teams salary cap. The cap space column lets you know how much estimated cap a team has to work with while the effective cap space tells you what they will have once they reach 51 players under contract. Cap space is always fluid this time of year so expect a lot of swings in the coming weeks.

You can click on an individual team page (this links to the Bucs as an example) from the top menu or the cap space page to go direct to that teams salary cap page. This has individual contract breakdowns by year and will show a player’s salary cap charge and what it costs (and saves) on the cap if the player is cut. You can also change the menu to look at the savings for a trade which can be different. Please note there is no June 1 option at the moment as the CBA will not allow that this season. Clicking on a player’s name will let you see the breakdown of the contract and dead money for the remainder of the contract.

To see every teams free agents you can check out the OTC Free Agency page and drill down by playing time, age, team, and type of free agent. You can load up a leaguewide page or just a team. The team page is found through the main team’s cap page menu.

To play offseason GM you can use the calculators we have for each team to make roster cuts and sign free agents. You can also restructure existing contracts though due to quirks in NFL rules that is probably not something to rely on this year  barring a new CBA agreement.

The positional pages on OTC will give you an idea of a market breakdown by position to see what the top contracts around the NFL look like.  Selecting a year in the menu will let you sort the players by cap charges.

The transactions table is the top “one stop” reference to see what it will cost on the cap to keep a player or cut a player. There are also restructure estimates but again due to NFL rules take these with a grain of salt.  You can drill down by team here and clicking on columns should also let you sort by the order for that column.

On the contract triggers page you can see important dates for salaries that become guaranteed or roster bonuses are paid.  

Over in the premium section you can get more detailed information on contract metrics, depth charts, player comparisons, and our performance estimates from 2019. We are also hoping to roll out some free agent profiles this offseason.

As time allows we will also do some articles on various cap situations and you can also check out our friends at Pro Football Focus who we are partnering with to provide some contract estimates for the top free agents this offseason for their Edge and Elite subscribers.

As always thanks for the support and feel free to send any feedback or suggestions via email.

Minimum Cash Spending in 2020

With free agency rapidly approaching one of the questions I am getting pretty often these days is about the spending requirements in the CBA. For those unfamiliar with the NFL CBA there is a rule that requires teams to spend at least 89% of the salary cap over a four year period. The current period, which began in 2017, ends this league year and could give some idea as to who will spend this year on contracts.

Though our cash numbers that we trace are not going to be 100% accurate they should give us a pretty strong estimate of the teams that are in danger of not meeting the 89% threshold. Through last season we did not have any teams that were under $473.9M in spending, which was the mark required to be on pace to hit the 89% mark. The teams that were closest, the Cowboys, Ravens, Colts, and Chargers were all between $477M and $485M. There is a quirk in the rules that could impact teams in cap trouble (spending on bonuses in contracts in February of 2017 should not count towards spending but we track them as cash for the year)  which means maybe the Cowboys and Ravens were slightly under but if it’s the case it should not be by much.

Assuming the cap reaches $200 million this year the four year spending number will jump to $651.8M. Per our estimates we have 11 teams that are under that mark. Of those 11, six should be compliant just by signing their draft picks. Those teams are the Cardinals, Buccaneers, Patriots, Giants, Broncos, and Dolphins. That should leave us with six teams that may have little choice but to spend in free agency this year. Let’s take a look at those teams.

Colts, $43M under– The Colts have pretty much avoided spending in free agency the last few years even with a huge surplus of cap space.  Last year when the unexpected retirement of Andrew Luck came down and the team surprisingly did not ask him to repay millions in bonuses paid just months before the retirement and then followed it up by a seemingly crazy decision to agree to a one year, $28 million extension for Jacoby Brissett I surmised that the team was going to be so far under the spending limit that both decisions were in part driven by this. Seeing how far under they are now I think backs that up. Indianapolis will likely make up half of their shortage in the draft but they will most likely have to finally go out and spend at least a bit in free agency this year especially if they do not keep tackle Anthony Castonzo. The Colts may not want to get tied down to anyone for too long so this may wind up being the landing spot for “rehab” projects that take a one year deal in the hope of improving their stock.

Cowboys, $45 million under- Despite what most people think of the Cowboys they have basically managed a low cost roster for years now. They have a reputation for spending wildly but the fact is they have not really signed a notable free agent in ages. They should hit this number with two tags this year on Dak Prescott and Amari Cooper. Even if Cooper signs elsewhere just the tag for Prescott should be enough since they have other free agents to sign plus $14 million in draft pick bonuses to pay out. So I would not expect them to be forced into anything in free agency.

Ravens, $47 million under– Between a tight salary cap and a cautious approach to extensions and free agency the Ravens have been one of the lowest cost teams in the NFL. Certainly this year they got the most bang for the buck with a low cost team that outperformed all expectations going into the season. The team will probably spend around $15 million on draft picks so they are still well under. This is likely part of the reason why rumors are circulating that the team is considering franchising Matt Judon. A tag for Judon would cost around $16 million and put them much closer to the number. Even if the tag was simply just to trade him part of that logic I am sure is that the most they could receive as compensation is a 3 and that would require extra care in free agency something they couldn’t pull off last year with Za’Darius Smith.  The Ravens did increase payroll last year (they went from being close to the lowest spending team in the NFL for 17 and 18  to around 20th in 2019) and did sign Earl Thomas and Mark Ingram but if there was a year for this team to be even more active in free agency this is probably the year. This is probably a logical spot for some veteran players to chase a ring.

Chargers, $48 million under– The Chargers have more or less been resigned to the fact that they were not going to be a legit competitor last year only adding veteran Thomas Davis and backup QB Tyrod Taylor as UFA’s last season. The team will spend $25 million on their first two draft picks alone so its around $20 million they need to spend. I could see this going one of two ways. Either the team signs a few veterans and someone like Marcus Mariota to just hit the minimum spending number or they try to make a splash for their move and go after either Tom Brady or Drew Brees (I personally cant see Brees leaving the Saints but you never know) , tag tight end Hunter Henry, and actually spend quite a bit in free agency to compete. I see this as one of the more fascinating teams in free agency this year that could stun some people with their decisions.

Bills, $53 million under– Buffalo had to go into a spending freeze due to the mess that the roster was a few years ago and just started to spend a bit last year as they came out from it. The team will only cover around $16M in draft pick spending so the Bills look to be a hit destination for free agents. The team has a huge surplus in cap space so they can probably structure a number of contracts favorably to maintain flexibility after 2021. Buffalo hasn’t signed a notable free agent in ages and I could see that changing this year. While I don’t think anyone is sold on Josh Allen as the guy this is the window to take advantage of his contract so if there is a time to take more risks its 2020 for Buffalo.

There are a few other considerations this year for some of these teams. If they were to extend or restructure players after the season (February 2021) or late in the season signing bonuses should count to help teams meet the number. If the CBA is not extended there are rules that would make it more difficult to do (i.e. extending a Josh Allen in February might not be the easiest thing to accomplish) but it is another route to hit the necessary spending.

The other big question is how do teams approach contracts now that the CBA could expire? I think this year’s free agent group is very strong and we should see a record number of double digit annual contract values being signed but since most teams don’t need to spend will they see this as an opportunity to try to break the union? 

The last time the CBA was set to expire spending hit record lows relative to the salary cap. In part that was because of rules (free agency was more restrictive in 2010 with a number of UFA’s being classified as restricted) but if you want to break any potential strike one of the ways to do that is to not be aggressive in free agency. This week we have seen reports of the NFLPA attempting to advise the players as to how much it would really cost to strike and if there is a thought that this could occur teams may “independently” come to the same conclusion that overspending in 2020 is not wise which could make for a very different free agent period.

Explaining Some of the Different Salary Cap Rules for 2020

As of right now the 2020 NFL offseason and regular season will be a bit different due to the fact that the CBA is expiring. If you follow me on Twitter you have probably seen a few comments here and there about the different rules but I thought it would make some sense to talk about some of them here.

1. There is no June 1 Cut

The question I’ve gotten the most in the last few weeks has been “Hey Jason where did the June 1 option go on the cap and calculator pages” and the answer is quite simple. As of now it doesn’t exist so rather than have people be confused about ways they can manipulate the cap we simply removed it from most of the pages on OTC. For those unfamiliar with the June 1, it was a date in the NFL calendar that was used to defer acceleration (dead money from future years) due to signing bonus prorations to the following league year. So when you cut a player all the cap dollars have to be taken in 2020. While this sounds bad to most fans its not that big of a deal. Only a handful of teams in recent years have had such a bad cap/contract situation where they have needed to use the June 1 so most times deferring money to the following year is just due to circumstance not need. If you wanted to put a number on this the average team should plan on keeping an additional $3-$3.5 million to account for cuts that normally would be treated as a June 1.

2. Teams have Both a Franchise and Transition Tag at their Disposal

In a normal year a team can designate just one player either a Franchise or a Transition player. In 2020 they can designate both. So for a team like the Cowboys with a set of major free agents this is a very useful tool as it gives them the ability to, at the very, least match any offer received for two players. In a normal year a team like Dallas would franchise Dak Prescott which would leave Amari Cooper and Byron Jones free to find employment. Now only one of those two will be 100% free. It’s important to note, though, that you can’t use two Franchise tags or two Transition tags, it’s a one and one situation.

3 Expect some Funky Sounding Contracts due to the 30% rule

To prevent teams from dumping huge amounts of cap into what may one day be uncapped seasons the league has a rule in place that does not allow raises of more than 30% of a player’s cap charge minus the signing bonus proration in 2020. So if a player has a cap charge of $6M in 2020 and $3M of that comes from a signing bonus it means he is only allowed a $900,000 raise in any season beyond 2020. Basically the rule is in place to prevent teams from using a signing bonus and from backloading contracts.

There are creative ways around this by using escalators, incentives, option bonuses, and other mechanisms so it just requires more time for team and agents (or self represented players) to finalize a deal. But we have already seen this going on in 2018 and 2019 and it led to a whole bunch of confusion in particular when Carson Wentz, who signed a deal in excess of $30M a year, had a contract that averaged millions less on paper to comply with the 30% rule but had a million and one ways to unlock the full contract value through escalators and incentives that had a 99.99999999999% chance of being earned.

Because so many don’t know about some of these rules and there is such a rush to report on a contract I can already envision all kinds of mis-information about option years, completion bonuses,  guaranteed salary, and annual contract values. Don’t get me wrong there is a lot of fluff in contracts that gets leaked out to make contracts sound better than they are but this year it’s a different story. If you are old enough to remember the old rookie contract system these contracts will all need to be written like those were. The difference is that back then people knew that Sam Bradford’s $20M contract (or whatever that number was) was really a $78M one. This is the same concept it’s just that people don’t know as much about it.

3A. These 30% Rules also Impact Renegotiations

What that means is that teams who usually convert millions of dollars to a signing bonus in February to create salary cap space in March won’t be allowed to do it that same way because they have to be 30% rule compliant and remember signing bonus prorations won’t count in the equation. This is why there was a flurry of renegotiated contracts in the last week of the 2019 season primarily by the smarter salary cap strapped teams (Falcons, Eagles, Lions, etc…) as it was easier to accomplish last year by some liberal use of what is and is not considered a likely to be earned salary escalator or de-escalator and putting in option bonuses that can be exercised and prorated in 2019.

Admittedly I’m not as up on how these incentives can be used now that the season is done but we are technically still in the 2019 league year so there may be some ways teams can use the same methods now (Im sure they cant use options to create cap space because they cant increase a cap charge for 19) but the few teams that did it at the end of the year were the smart ones.

4. Teams have to account for all incentives in 2020

Normally when it comes to incentives the way it works is if the incentive was reached the year before it counts on the cap and if it wasn’t then it doesn’t count. At the end of the year the league then determines who did and did not actually earn those incentives and adjusts the cap the following year. For 2020 all of this happens in real time so teams will need to carry the cap space to account for all possibilities.

As an example, since it was well publicized, Richard Sherman earned $4 million in incentives in 2019 from the 49ers. The 49ers were not charged for that on the salary cap because Sherman did not meet the criteria in 2018. Instead they will have their 2020 salary cap knocked down by $4 million. If that same situation occurred in 2020, the 49ers would be required to have $4 million in cap space to cover the incentive.

It will also work the other way too. This year Sherman should carry a $4 million LTBE incentive on his cap figure because of what he did last season. If he does not hit those same incentives the 49ers would then receive $4 million in cap room once it becomes apparent that he will not earn the incentive.

The latter situation really doesn’t help a team too much since it would be near the end of the season when these go unearned, but teams with a great deal of incentives in their contracts will likely need to prepare for the first scenario to avoid in-season problems. Preparing most likely means hoarding a few million extra in cap room.

5. Void Years May be a Problem

We all know that teams use void years in contracts to dump salary cap dollars for the future. It’s a big discussion point right now because of the pending free agency and huge void year prorations for Tom Brady and Drew Brees. Teams often use multiple void years to make cap hits work. That will be fine this year as well except for 1 year contracts.  This is a problem because the void occurs in what is technically still the 2020 league year (the 2020 league year runs until the first day of free agency in 2021). This is never an issue for teams because that void date is post June 1 of the prior year so the money follows the calendar year for all practical purposes.

Since there is no June 1 all the money from those voids should accelerate into 2020 when the void occurs. That means teams will need to carry the cap room to cover those cap charges essentially rendering the void useless. As an example Drew Brees has a 2021 void year charge of $5.4 million. Assume the Saints bring him back on a new one year contract for 2020. The way they have always done Brees’ recent deals would be to do something with a low salary, huge signing bonus, and two or three void years to dump that money. Assume between the existing void and any new ones that there is $20M in void year cap charges. Well once the deal voids the Saints need $20M in cap to cover it. So my opinion is that teams with Brees type players will actually have to negotiate two year contracts likely using the “Revis structure” from his time with the Patriots where you make the second year salary so high that you will be forced to cut the player thus making it a one year deal but protecting yourself from the void charges since in this case you actually release whenever football resumes. So if you see someone like Brees get a $40M a year deal with a big 2nd year payment relative to the 1st its really a one year deal written in a manner to protect both parties.

6. Expect a Second Salary Cap Adjustment

Usually the NFL salary cap is set around the combine in late February/early March. That number is then firm for the rest of the year. Normally the accountants then go over various items to determine where things may have been off and whatever that number is usually gets baked into the cap the following year. This time around I believe they have to issue the adjustment for this season and it should come in later April or early May. The last time this happened in 2010 every team got an additional $4 million or so in cap space to use. If that happened here it would be a help for teams that may have been relying on that June 1. Of course the adjustment could be negative too but Id think that is much more unlikely.

7. There may be no Cap Carryover for 2021

Technically the CBA ends in 2020 so the concept of carrying over space seems unlikely. The last CBA was somewhat different with regard to carryover rules so its not fair to lean on that for information but it was a “start over” in 2011.  So it’s possible that the NFL would agree to just keep things going as if there was no interruption in 2021 but there is also no guarantee. Rather than chance losing it the smart teams should be putting voids and buyback options into player contracts this year which should be a way to accelerate future prorated money into 2020 and thus use up the cap room. Likewise if you want to cut a player who is underperforming you can do it after the season is over and use up some of that cap room that you have and get the player off the books for 2021.