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One of the biggest questions that always come up when taking salary cap questions deals with a team’s salary cap position in 2021. This is not always the easiest question to answer since rosters are fluid and most of the 2020 rookie class has not even yet signed a new contract to be included in any estimates. So I thought this might be a good time to go over what I try to look at when determining a team’s position with the cap and then use those criteria to come up with an average ranking.
Factor 1: Projected 2021 Cap Space
I tried to make as many adjustments as possible to this to make it as accurate as possible. So what I did first was calculate teams true cap space in 2020 to determine the cap carryover since that plays a big role in a team’s future cap position. To do that I processed the June 1 cuts, processed the rumored retirements, and added in all of our draft pick projections and replaced a $610K salary for each of those moves. I then subtracted $3.9M from each team to account for in-season spending which is around the minimum I would expect teams to need to move from offseason to in-season accounting. For 2021 I used our effective cap space column, added the calculated carryover and then processed the retirements from above and added in our cap estimates for all of the 2020 draft picks who are not yet signed.
The teams that dominate this category are the Colts, Jaguars, Chargers and Patriots while the Falcons, Eagles, and Saints are in trouble.
Factor 2: Max 2021 Cap Space Based on Cuts
For this I added another adjustment to the criteria above by just cutting every non-QB on the roster that would save at least $500,000 in net cap room. 2020 draft picks were excluded from cuts if they qualified. While obviously nobody is cutting everyone they can I always consider this a good way to see how much the roster is filled with sunk costs. The teams that can create the most room are the Bills and Browns while the Lions and Falcons are much more limited. When adding these to our effective cap space our top cap teams are the Colts, Chargers, Browns, and Bills while the low end teams are still the Eagles, Falcons, and Saints.
Factor 3: Max 2021 Cap Space Based on Restructures
Another avenue to creating cap room is to “kick the can” with player contracts and convert salary into prorated signing bonuses. This is a way to buy now and pay later so to speak. As a rough estimate here I calculated the max cap savings that could be found if a player converted all his base salary and roster bonuses into a signing bonus and prorated it over the term of his contract. While teams can, and often do, use voidable contract years I didn’t max them out unless a player had void years already in his contract. This was then added to the cap space from factor 1.
The Eagles by far have the most ability to create cap space using this technique in part because they already have void years in some of their deals but its also based on structure. Dallas and New Orleans are 2 and 3. The teams that cant create much room this way are the Chargers, Steelers, and Patriots.
With this as a signal the top cap teams are the Colts, Jaguars, Redskins, and Dolphins with the bottom being the Steelers, Saints, Chiefs, and Falcons.
Factor4: Potential 2021 Free Agents
One of the other important things to consider is how much is going to be required to keep players on your team. For this I am not going to do any kind of projected salaries and instead just did a basic ranking system of UFAs. If you play at least 75% of the snaps last year you score a 3, over 50% is a 2, and over 30% a 1. There are players under that who also score contracts but since we are in the offseason with rosters so large I didn’t give those players a score as generally those under 30% are the ones that take longer to find a new home and a good portion of these players will be cut. I then assigned a multiplier based on position (QB for example was a 3x, WR 2x, RB just a 1) and a reduction on age (0.7X if over 30). I didn’t include RFAs in this or any tenders in the above factors either. I then summed up the scores to just give a general ranking of the free agent classes. This overestimates the value of some players (Jameis Winston for instance will be a backup this year as will Jacoby Brissett) but for a rough guide this is reasonable enough.
The teams with the most to keep in free agency are the Cowboys, Colts, and Jaguars while the Giants, Eagles, and Browns don’t really have any considerations there. While I am not ranking the impact on cap room directly here its safe to say that the teams with a higher number will likely use up more on their own players either this summer or next offseason than teams with few considerations.
So here is how I would rank the teams in regard to salary cap health (call it the cap health index) followed by a few thoughts on the teams.
|Team||Estimated Cap Space||Max Cap With Cuts||Max Cap With Restructures||FA Score||Avg. Rank|
Tier 1: Browns, Patriots, Bengals, Colts, Redskins, Dolphins, Jaguars, Chargers
These are the teams, with the exception of the Browns, that will likely stand out all of 2020 as having a big chance at free agency in 2020. Ultimately I think with this group the Colts have the most desirable position even if they didn’t rank the highest. Their cap room under any scenario is pretty much absurd and their free agent score is artificially inflated by that Brissett inclusion and that is what drove them down. The Patriots are probably going to wind up with the 2nd most amount of cap room while the Browns are going to be the most flexible team in the NFL if they have to start making big changes with the ability to both cut and restructure. That one caught be a little off guard, but they have been trying to do better with their cap in recent years. The Jaguars and Redskins were teams I didn’t think much about before this but Jacksonville is purging their roster while the Redskins are still finding their way around. No guarantee these teams will be active in free agency next year but basically no extension or signing should trouble them if the cap is normal next year.
Tier 2: Titans, Seahawks, Ravens, Cardinals, Bills, Buccaneers, Jets, Broncos
These are the teams that likely have the most potential to get into the top tier in the run up to free agency unless they front load the salary cap hits in an extension. Basically this group has moderate cap room but won’t have many players to sign and are all in a position to gut their rosters if needed. For some of the teams like the Jets, Cardinals, Broncos, Titans, Bucs, and Bills I think this makes sense. For the Seahawks and Ravens you wonder if maybe they should have taken some added chances this year. Regardless of my opinion they are all in very good shape and if the teams with an unproven young QB(Arizona, Buffalo, New York, and Denver) break out this year there will be massive expectations in the offseason.
Tier 3: 49ers, Giants, Panthers, Vikings, Texans, Packers, Lions, Rams
This is a more haphazard group as it consists of a few teams that will likely have their cap positon overstated in 2021 and a few that will have it understated. For the most part this group of teams have one primary avenue to added cap space- either restructures or cuts but not nearly as much flexibility with both as the teams in the tier above. The 49ers, Lions and Rams can benefit the most with the restructure strategy while the Vikings, Packers, Giants, Panthers, and Texans could slice away to gain room. This is also the group where one big extension could drop them a tier and have a ripple effect on the cap. Of these teams the 49ers have the most overall flexibility and are probably in the best shape.
Tier 4: Cowboys, Falcons, Eagles, Bears, Raiders, Steelers, Chiefs, Saints
This is the group of teams that will mainly be looked at as being in trouble with the cap for a number of different reasons. These teams will have a difficult time moving up a tier and in some cases will need to make some difficult decisions to deal with the cap. The team that has the most potential from here is the Cowboys who have a lot of flexibility with restructures if they want to do that. They also can still re-sign their prime free agent next year (Dak Prescott) by July to increase their carryover and likely do a moderate cap number. The Saints stand out as the worst team overall with little flexibility. Kansas City will be interesting since they have free agents, a QB who will want an expensive contract and not much room up unless they start cutting. Neither the Eagles nor the Falcons are in a good spot but both should be ok due to the ability to restructure for cap relief and a lower group of impactful free agents in 2021.
The rumor mill is once again swirling around Jets All Pro safety Jamal Adams as the Jets are apparently hesitant to give him an extension which has Adams reportedly very upset again with the organization. Trade rumors started again which sources close to the Jets have denied but I think these are interesting situations and worth exploring.
Player’s like Adams are very hard to sometimes take a fair look at. On one side there is the player and there really are little holes in his game. He is arguably the best overall safety in the NFL. He plays up in the box, can rush the passer a bit more than others and can cover well enough in the secondary. He’s the best player on the Jets at the moment.
However, being the best player on a bad team sometimes doesn’t carry the same value as the same player on a good team. Since Adams arrived in New York the Jets are 16-32. His being the best safety has made little impact on the overall success or failure of the team. That isn’t a knock on him its just that there is only so much a safety can do to increase the chances of winning for a team. Adams being at the peak of his career isn’t going to make the Jets a 10 win team. It is also one of the reasons why the league values safety on the lower end of the salary spectrum, basically on par with running backs and tight ends.
That said to a good team that considers themselves a Super Bowl contender whatever added value that safety brings can be worth a lot because getting from 11 to 12 or 12 to 13 wins on a year is huge as is getting that one added win in the playoffs. While Adams isn’t going to make a bad team great or even good he can be considered a game changer in a different kind of situation. If that is something the Jets can exploit it can bring more value than the player himself.
Adams still has two years remaining on his current contract which makes him very valuable around the NFL. That value will diminish after this season as his salary increases from $3.5 to $9.86 million and teams lose that valuable year of control. So the max trade value is going to be in 2020 not 2021. My guess is a fair trade package would be a first round draft pick plus either a third or fourth round draft selection in return for Adams.
The final piece in evaluating a trade will be the money associated with it. My assumption is that Adams should be looking for $17 million a season from the Jets. He was being shopped for two number 1 picks last year and is considered the best player on the defense. The current high value contract on the Jets is CJ Mosley at $17M per season so I think it is a reasonable ask. Mosley did not play a high value position and the Jets went way over the top of the market to sign him. There is no reason that they should not do that for Adams. While Im sure some are going to argue that the Mosley contract is on the prior GM I think its also clear that that was an Adam Gase target not to mention that the contract guys are all the same now too. For the sake of argument lets say that Adams would sign for the standard safety number contract at $15M a season when considering a trade just because I am sure the Jet fan would like the cheapest number to consider.
With those numbers we can start some scenario analysis. The first scenario is to keep Adams and to just use your regular budget to address other positions having to spend $14.5M for someone like James Bradberry or $20M for a Yannick Ngakoue If he (or a similar player) was to shake loose.
The second scenario is the trade. If traded I would expect a mid first round draft pick to cost around $4.6 million a season and a mid third round pick will cost $1.1 million a year. That should leave the Jets with an extra $9.3 million per year to spend on a player or players in free agency. So now we are at a 1st, a 3rd, and $9.3 million.
Odds are you will not find a player who is as good as Adams with whatever first rounder you ultimately end up with but if you play the game better you may find someone more valuable. As I mentioned above the veteran salary scale would indicate that safety is not very valuable by themselves. But that first round pick could be used to help get a quarterback if Sam Darnold busts. Clearly that is more valuable. It can be used on an edge rusher, a wide receiver, or a cornerback. Each of those will likely provide more impact on the teams fortunes even if the player is a very good player but not the best at the position. Those are also players that you can not find, or rarely find, in free agency. The third round pick should provide a team with a solid “lunchpail” type player that can start or be a solid situational contributor.
Just to use some Jets players of the past who were not all time greats but might illustrate the kind of return would be something like Jamal Adams for Antonio Cromartie and Brian Winters. The savings could have been used in free agency to cover the cost of signing someone like Ha-Ha Clinton-Dix as a replacement safety and maybe a pairing of Kevin Johnson to help in the secondary and Shelby Harris to play on the line or just spend it all on a player like Chris Harris.
The key for a strategy like this to work is to find whatever way possible to maximize your return in the draft by using the main pick on a position that you rarely can buy in free agency and one that provides massive value between the rookie contract number and veteran contract number for an equivalent player. If you decide to be the Raiders and use a 1st rounder on a running back (or just draft another safety to replace Adams) you are negating the value of the trade.
Lets take this one step further. Lets say the Jets use that pick on a cornerback. While maybe it’s a 50-50 proposition he is good, free agency often isn’t much better as the Trumaine Johnson signing proved. You would have spent $14.5 million to sign a player in free agency. Now you don’t have to because you got an extra draft pick to use on a premier position like that. From that standpoint the Jets have actually opened up far more than what we mentioned above because they are addressing a need cheaply. When I mentioned Ngakoue and Bradberry above odds are you would not sign two expensive free agents in most years so if you play your cards right you are opening up the possibility to address both needs by drafting one spot and signing the other. If you had budgeted $14.5M to spend on a need you can divide that however you want now. That route doesn’t exist without the trade.
There are other factors that are negatives with a trade. One of the reasons I thought Adams would have been extended by now was because when the Jets did not finalize a trade last year and let it leak out they looked bad. Sometimes situations like that don’t exactly go over well in the locker room either. While the Jets draft picks in recent years have been average at best the fact is around that room they have seen Leonard Williams shipped out, Darron Lee shipped out, Robby Anderson shipped out, etc… while new faces have come in and taken the cash from the team. You cant really put a number on those kind of things.
It is also worth reiterating that these are just rumors. The Jets may simply have decided they don’t want to get into the concept of extending after 3 years. With a quarterback contract in the wings they probably need to see much more from Darnold before even entertaining that discussion and waiting here gives them more footing with Darnold and players in the future that waiting until after year 4 is the right way to do business with them. Perhaps they want to see where the contracts with Justin Simmons and Anthony Harris land if they sign new deals in July. It can also be as simple as the Jets being cautious with the pandemic and not frontloading a contract with less than expected revenues coming in.
But I just think when you are a team that is as bad as the Jets have been you have to consider trading away players who are labelled as cornerstone talents if you can find a viable path in which the trade actually makes the team better overall. I think this is a case where it could make the Jets better overall and certainly cant make them much worse than they have been the last three years.
Had a really good conversation on contracts with the guys at PFF today and right at the end of it some wacky news popped up about Dak Prescott that didn’t make much sense to me (and later I along with some others found it was a false rumor) but really opened up some strange discussions on Twitter about contracts. This also ties in with one of the first things we talked about on todays podcast which is what are the things you first look at when you see a contract and this seemed like as good a time as any to talk about that further using Prescott as example.
While reports on contracts often are about annual values, maximum values, and/or injury protection the real meat of the contract is the cash flow of the contract. From the perspective of the agent the more money up front the better. From the team side the opposite is true and they want to push more money to the back. All the other things are important to some extent but how the players get paid is really the primary factor with things like guarantees and structure being used as a way to mitigate the risk for the sides to some extent.
For the most part when we benchmark contracts we look at what’s referred to is “new money”. For whatever reason a lot of people find this confusing and get all mixed up with it but basically all this means is if a player is already under an existing contract we back the existing money and years out of the contract. When analyzing a contract I usually refer to the money earned over and above what was called for in their prior contract the “Year 0” earnings. For example if a player had $25M remaining on his old contract and his new contract called for a $49M payment in the same year he would have a “Year 0” salary of $24 million. It’s essentially a prepayment on the new contract years. Year 1 of the contract would be the first year the player would have been eligible to be a free agent has he simply played out his prior contract.
If you are looking to sign a top market contract your goal is to also likely set new cash benchmarks at the various points of a contract. The following is the breakdown of the running cash new money cash flows of the top multi-year QB contracts of currently active players.
|Player||Year 0||Year 1||Year 2||Year 3||Year 4||Year 5|
As you can see the numbers that are on the front end of these contracts are massive. The average of the group is about $60 million in new money earned by the time they have finished what would have been the first year of a contract signed in free agency. Since Dak does not have a “Year 0” to consider you can jump right into Year 1 to see the kind of money he would be looking at. This is one of the reasons why I found the statements I was reading about a $45M salary being selfish. You can not find any QB on a big contract that doesn’t earn much more than that on the front end of the contract.
The reason why the front end numbers are important for a player is because those are the years of a contract that are easier to earn. Even if a player’s salary is not protected by a guarantee the front end contract years are usually where the player is more effective. There is usually still a honeymoon period between the team and player at that point. Usually the players dead money at that point is often so high that it is harder for the team to move on anyway.
Getting back to the benchmarks the top line numbers are basically Wilson at every level with $71M, $90M, $114M, and $140M. Those numbers are gigantic and lap the field. Its $10M more than any other player at the start of the contract and $7M more in the 2nd year. One of the best ways to compare this is to break down the contract into value per year at every stage of the contract.
|Player||Year 1||Year 2||Year 3||Year 4|
While Wilson did not earn anything close to the supposed demands of a contract that fluctuated with the cap and other oddball things you can see how strong it is. His contract on a per year basis is $1.5M per year more than Goff and Rodgers but the gap is much wider on the front end, which are the most likely years that the players will earn. It is important to note that QB is a little different than other positions because the career is much longer than other positions but the concept still remains the same.
When constructing an offer for Prescott his numbers have to fit somewhere in here. That is another reason why the $45M final year was kind of ludicrous. If its part of the $175M he would wind up well below the average for the other players until that last year since you would be taking $20M of money in the first four years out so you could throw it in the final year of the contract. That is maybe a tactic for a lesser player at a lesser position but would probably be considered somewhat insulting for a QB.
Don’t be surprised if one of the hardest parts of any offer is first bridging the gap as to where these cash flows wind up. The compromises are generally what you see with the others. Goff and Rodgers have contracts that average the same amount of money but if there was an epic disaster that caused the teams to bail (and there were no full salary guarantees) the Rams would have saved $3.5M because they were able to push some money later into the deal. Similarly if you look at Matt Ryan and Carson Wentz you can see an average per year that has Wentz earning $2M more per season. Yet the two earn basically the same number through two years and its not until the end of Wentz’ contract that there is more divergence. These are all ways to find compromises so that both sides come out of the negotiation happy. But those are moderate deferrals not millions upon millions.
If you base an offer on the structures of the other contracts you would wind up with cash flows in the range of $60M, $87M, $113M, and then $140M. That gives you the average per year of the Wilson contract but a cash structure that is better than most of the others but only catches up with Wilson on the backend.
The fifth year is an interesting topic. The big contract change in the movement from 5 to 4 year contracts really began with Wentz and Goff with an assist from the three year contract signed by Kirk Cousins in free agency. The Seahawks were a four year contract team and there was nothing unique about Wilson getting a four year contract. The older guard on four year contracts were old players. There was no reason for teams to really worry about five years there as they are a different subset of comparables.
The difference you get with Wentz and Goff is that those players were obligated for at least 5 years of control due to the fact that they had option years in their rookie contracts. So a four year extension represented 9 years of a players career. For Prescott a four year contract represents 8 years of control. If four years is a sticking point I would imagine that Dallas’ argument is what’s the difference between tagging Prescott this year and then doing a four year deal next year? They risk prices going up due to team success but the only real market risk is Deshaun Watson with the Texans. Personally if I was a team I would prefer to get in before that only because the Texans have shown some odd tendencies at times but I would not go crazy about it.
There is leverage in that scenario for Dallas at least to a point. Dallas will have Prescott under contract this year for $31.4M. That number is far far far less than any of the other players on this list. Even f the tag dragged for two years the two year salary of $69.08M is way way way less than the two year salary of any of the players on the chart as well. If they tag this year and do a deal next year at $35M per year for four years its an average of $34.3M over five seasons. As long as Dallas keeps the salary down under $35.9M the five year value would not exceed $175M or exactly what he would earn taking a five year contract now.
Even if prices go up there is value in getting that fifth year under contract. Lets say Dallas had to go to a $38M offer that ran from 2021-2024. That would average out to $36.7M per year from 2020-2024. While that may be more on paper than what Dallas is offering now they would get that final year under contract. Even if that final year costs say $35-$38M it is probably less than it would cost to tag Prescott in 2024 if they agreed to a four year contract today.
The franchise tag is really only a benefit for the player if they are playing the long game. That is something you can do better at QB than any other position but you basically are giving up money now for the chance at earning it two years later. The odds would be against a team using a third franchise tag so you would be free to cash in on the market. That’s big. Take in $69M and then another $60-70M in the first year of a contract in 2022. If you are willing to wait and leave for another team that is the most lucrative path but its not one that most players take.
I would think the key to a five year contract is to take into account what the market would be next year if he played out this tag. In essence value this as “old money” and negotiate a four year extension on top of it. If they take $38M as the number its going to be five years for $36.7M mentioned above. Its not that far off a $35M per year contract. Bring it down to $36M and its effectively a four year, $37.2M extension.
From there you can go back to the cash flows to find a way to make it worthwhile to do the longer term beside the fifth year. Based on the Ryan contract I would assume a fair 5th year salary to be around $33.5M. That leaves the four year number at $146.5M. Let year 1 trail Wilson and run around $63M to be closer to what the rest of the market is. By year two he earns slightly more than Wilson ($90.75M to $90M), and then $4M more over the three year period and the $6.5M more in year four. That would likely give both sides positives in the contract and different ways to value the deal to make everyone happy about what they wound up doing rather than playing out the season and then going back to the drawing board.
But whenever you hear a leak about an offer see if you can find any rumors of the contract breakdown before you really evaluate it. And when something sounds completely out of whack like a back end $45M payment its probably worth questioning completely before really running with it as anything remotely valid.
The Dak Prescott story continues to give us some things to talk about with the discussions today turning to the salary cap impact of a contract extension hurting the teams chances to win. There was a post on Twitter looking at the lack of Super Bowl wins for top QBs since 2014 which garnered a great deal of attention todat so I wanted to expand on that a little.
While the Super Bowl is certainly aspirational it is so difficult that using that as the only judge of success can be limiting. So I wanted to look at what teams have spent and how much success they have had over that 14-19 timeframe. For the most part I think we measure success as making deep runs in the playoffs. So I awarded each team 1 point for completing the regular season, 2 points for losing in the wildcard round, 4 points for losing in the divisional round, 6 points for losing the conference championship, 8 points for losing the Super Bowl, and 10 points for the ultimate Super Bowl winner.
The following chart shows the results (yes I know its old logos) with the exception of the Patriots who throw everything out of whack. If you want to know where they would be its nearly 50 points with just slightly above league average QB spending.
The data pretty much indicates no correlation between spending and success. There are teams that spend big that are consistent deep playoff teams and those like the Lions and Giants who have basically stunk. There are teams with cheap QB rooms that do well and others on the Jets line who spend little and win little.
Still this can be a bit misleading because for many of these teams the arbitrary timeframe overlaps rookie contracts and non-rookie ones. So what if we just look at veteran players? Here is the list of QB’s who have totaled more than $25M in cap charges on veteran contracts (meaning Russell Wilsons 2014 would not count but 2015 would), played at least three “veteran years” and how they performed. I pulled Brady out from here just because he completely changes the ranges we have to show since he has been so successful.
Again it is basically the same story. You can win or lose with expensive QBs. Its more about who you spend it on than the cost itself. That brings up the other questions which is should you just draft or not? Here is how the average yearly performance of teams with rookies who primarily started matched up with the average performance of these veterans (again I took Brady out).
This gets a bit messy since I didn’t take out the names and so many rookies make little but I do think there is some evidence to suggest what intuitively makes sense- having so little spent on the QB position relative to the veteran should give teams more opportunities for success during that short window of time where they are on a rookie contract, which usually is years 2 to at the most 4, so a two to three year window. Even when a team is playing a sub par QB like Bortles and Mariota they may have had enough resources to use elsewhere to build a team that hides the QB. Of course many teams then make the mistake the Jaguars made and assume a Bortles can be successful when the reality is they were only successful because of what was built around him.
This is of course a completely different question for a team like Dallas. Its not an option to get Prescott under $10 million nor is it an option to land a top 10 pick which is where most of the good rookies come from. The question is does Prescott lock them into that bottom right area? If they think it does then bail, but if they thought that way the time to be auditioning replacements was 2018 and 2019, not waiting until 2021. It’s the one area that the Patriots did a good job which is somehow overlooked because of Bradys longevity- they were always looking to have a young guy behind Brady so they have an opportunity to have already looked at his replacement for a year or two in their system.
It’s a completely different strategy discussion but the concept would be to take a player like Prescott (or Goff or Wentz) and see before their fourth year how many first round picks you could turn them into. If its more than one you are probably giving yourself the ammunition to potentially upgrade the position at a far cheaper cost. Basically you are trying to exploit the fact that desperate teams that have failed in their quest to find a QB would be desperate in a trade and give the farm. That’s a topic for a different day.
But for today’s topic I don’t think that any of the data backs up the point that dropping from a Prescott to a cheap option like Dalton or Fitzpatrick type players will lead to any success nor that paying a QB completely eliminates the chance of winning. Its about finding the right players to pay and making the very difficult decisions on those who are not worth it.