Saints Restructure Rankins Contract

The Saints didn’t have too many ways to create more cap space this year, but they found a way to get a little creative by reworking the contract of free agent to be Sehldon Rankins.

In order to make this work the Saints added two voidable contract years to the existing contract for Rankins and prorated $6 million of his $7.69 million salary. The move opens up $4 million in cap room for the cap starved Saints. Rankins was in the fifth year of his rookie contract and will still be a free agent after the season.

I would imagine that the Saints added large dummy year salaries in the void years to maintain a window for a contract extension without falling into any CBA related issues that would make an early extension challenging. If not extended, Rankins will count $4 million on the cap next season, a year in which the Saints project to be around $75 million over the cap.

Unlike the Lawrence restructure yesterday this has nothing to do with cap room in 2021. The Saints were tight against the 2020 cap with about $2 million in cap space so this does give them breathing room. It probably also opens up the cap room needed to give Alvin Kamara a signing bonus in the $12 to $15 million range and still be ok with the cap this year. If Kamara is to be extended expect it to come down today or early next week as teams usually cut off negotiations after that point.

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Cowboys Restructure Lawrence’s Contract

The Cowboys continued their run of contract restructures with today’s restructure of DeMarcus Lawrence, creating $12 million in cap room by converting $15 million to a signing bonus.

This is the third major restructure of this offseason for the Cowboys. Prior to this move they converted $8.9 million of left tackle Tyron Smith’s salary to a bonus and $10 million of guard Zack Martin’s salary to a signing bonus. All told the three moves created a whopping $27 million in cap room.

However every time Dallas makes a move like this I get questions about big signings like Earl Thomas or Dak Prescott (you never know about Thomas and Prescott can’t be signed), but Dallas now has over $29 million in cap room. They didnt need these restructures for this year at all.

For some reason this is something that is completely being lost in some of the reporting on these restructures. The Eagles restructured Lane Johnson’s contract yesterday and the immediate reaction was that it was because of a raise for Jason Peters. The Eagles had millions in cap space and it had zero to do with that.

Most of these moves are coming down because some of the teams are currently being very proactive in maximizing their carryover to deal with cap issues next season when the cap is expected to fall by over $20 million. By converting salary to a bonus now the teams are essentially getting to double dip on conversions by getting a chance to maximize the cap room via restructure this year and next.

For example by restructuring Lawrence now they create $12M in cap room to carry over to next year while increasing his cap hit by just $3M, a net gain of $9M. They can turn around again and restructure his deal next year if they want to and gain another $12.8 million or they could just be happy with the $9 million. Dallas now has close to $30 million in cap room under the worst case cap scenario next year so they are in position to tag Prescott again which is the most important thing for them to be concerned with.

I have been surprised that more teams have not done this yet besides Dallas and Philadelphia. Partially this may be because of the pandemic and teams wanting to see if games will be cancelled or not (a signing bonus is a sunk cost even if games are cancelled), but I think this can give teams more clarity by doing this now, provided you are doing with players who would never be cut in 2021 anyway.

Players should be pushing for this as well. Getting the bonus protects you from the pandemic cutting a season short. It also can give you significant dead money protection on non-guaranteed salaries in the future. This is kind of a lost art in contract construction but dead money can be a good way to better protect a roster spot.

In any even think of some of these restructures as the year goes on a bit more critically as to what they might accomplish versus them signaling an immediate corresponding move (now go watch the Cowboys sign Earl Thomas to a 1 year, $12 million contract).

Undrafted Free Agent Analysis

Yesterday I broke down NFL rosters in a few different ways and one of the things that caught the eye of many people was the UDFA numbers. Nick in particular asked if we could drill that down a little further basically looking at whether or not “priority” UDFAs have a better success rate or not. A priority UDFA is one that receives a high level of guarantees (or at least that is how I define it) presumably because there is a great deal of competition for the player’s services.

To look at the success rates of these selections I went back and focused on the last two drafts (I only selected the last two because the guarantee levels have been higher in 2019 and 2020 than before so it was more relevant to the salary bins) and broke the UDFA signings up into groups based on their guarantee levels. Here is the breakdown of the percentage of players who have yet to be cut and remain on a UDFA contract with the team who signed them.

Guarantee20192020Total
$01.3%12.8%3.6%
$1 to $10,0002.4%6.4%4.2%
$10,000 to $20,0009.5%4.0%6.7%
$20,000 to $40,00014.3%20.3%17.1%
$40,000 to $60,00017.9%5.9%11.3%
$60,000 to $80,00016.7%21.7%20.0%
$80,000 to $100,00023.1%25.0%24.2%
$100,000+0.0%23.3%15.9%

Now the columns don’t exactly tell the same story since 2019 is for players two years out versus just 1 year out for 2020 but I think it does tell us that teams do a pretty good job of identifying the better prospects, but it may be questionable whether or not they are making the best use of their resources. The hit rates on the sub $20K guarantee are very low. You can throw out the 2020 percentage here because the sample size was very small due to NFL teams not giving hundreds of players a look in camp due to the pandemic.  

Once you get above that number the hit rates improve but there does not seem to be a substantial difference between the $20,000+ prospect and the $60,000 prospect and certainly seems to be little between the $60,000 prospect and the $100,000 one.

Still this chart only tells us the players who were never exposed to waivers. Sometimes (often) the player ends up back on the active roster after being released. Here are the numbers for those on the team that signed them (does not include practice squad).

Guarantee20192020Total
$01.9%12.8%4.1%
$1 to $10,0007.2%7.6%7.3%
$10,000 to $20,00012.2%5.3%8.7%
$20,000 to $40,00024.3%20.3%22.5%
$40,000 to $60,00028.6%5.9%16.1%
$60,000 to $80,00033.3%21.7%25.7%
$80,000 to $100,00023.1%25.0%24.2%
$100,000+7.1%26.7%20.5%

The numbers improve a little bit here but nothing significant enough to really justify the emphasis on the expensive undrafted as they have a lower hit rate than the lesser guaranteed 7th round picks.

Many teams will look at the guarantee as more of an investment in a practice squad player since the salary guarantee is offset by the players practice squad salary. Here is the breakdown of players on the 90 man as well as the practice squad roster.

Guarantee20192020Total
$09.7%38.5%15.5%
$1 to $10,00013.9%34.3%23.1%
$10,000 to $20,00018.9%50.7%34.9%
$20,000 to $40,00027.1%62.7%43.4%
$40,000 to $60,00039.3%64.7%53.2%
$60,000 to $80,00050.0%60.9%57.1%
$80,000 to $100,00046.2%70.0%60.6%
$100,000+35.7%76.7%63.6%

These numbers are interesting because the percentages are so much higher for 2020 that I think its fair to say that the guarantee is a driver of having a spot on the roster in the first year with so many with a large guarantee getting some kind of roster spot. That falls by year 2 when teams are less invested in those same players to warrant a second practice squad contract. What if we include all player contracts for this year regardless of team?

Guarantee20192020Total
$016.8%41.0%21.6%
$1 to $10,00021.5%34.9%27.6%
$10,000 to $20,00029.7%52.0%40.9%
$20,000 to $40,00047.1%66.1%55.8%
$40,000 to $60,00064.3%73.5%69.4%
$60,000 to $80,00050.0%60.9%57.1%
$80,000 to $100,00053.8%70.0%63.6%
$100,000+64.3%80.0%75.0%

You can see the jump here from 2019 as these players, especially the pricier ones, are still in the NFL- they just are getting looks from new teams who think they can get something out of the player.

Is too much emphasis placed on the UDFA craze? I’d say to some extent that is accurate. It would seem that the NFL does a good job in identifying the longest of long shots but has very mixed results with the players that they clearly have higher draft grades on and target with large guarantees. Id say teams could prioritize the undrafted free agents into three groups- the sub $20,000 category where bidding on the players is pointless and teams could do as well with low offers, the $20,000 to $60,000 category where you can bid on players but should probably stay on the low end, and the $60,000+ category where overbidding is probably a mistake.

Still this is splitting hairs as we are talking about numbers so low relative to the NFL contract that its probably worth the shot in the dark. While the hit rates are much lower than the 6th and 7th round draft picks I think the better argument is that those players should ask for more guarantees to reserve a practice squad spot, because for the most part that is all the big UDFA guarantee amounts in anyway- a chance on the practice squad.

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Negotiations Break Down Between Zach Ertz and the Eagles

Negotiations between Zack Ertz and the Eagles on an extension which have seemingly been on-again, off-again since last November are back in the off-again mode according to Ian Rapoport:

The tweet would certainly seem to indicate that Ertz’ side is a bit upset with the negotiation and its not much different than the approach that went on with George Kittle and the 49ers which worked out in Kittle’s favor. However, the wording here is what I found interesting and really is the only reason I wanted to write about it because it shows how offers can be twisted around to suit ones needs.

There are a few key lines here, all of which are designed to paint the Eagles in a bad light. And perhaps they are negotiating in bad faith here but this is how I would look at what is being said.

  1. The Eagles offered less guaranteed money than in November.

It is important to remember that the market dynamic has changed since last November. Since that time we saw the Kittle contract obliterate the market and perhaps more applicably the Travis Kelce extension move the needle on the market for 3rd contract tight ends. Teams usually use guarantees as a trade off on values. What that means is that a team may offer you less guaranteed money for a higher valued contract or more guarantees on a lesser valued deal. Did the Eagles just pull guarantees or did they make a offer a much bigger overall number with the concession being guarantees? Kelce for example earned barely any new guarantees in his contract extension.

2. The backloaded offer.

Clearly that is a phrase that tells you that the offer is just throwing money at the end of the deal. Basically this is what the Kelce contract is. It grows from $11.75 to $13.25 to $15.5 to $17.5M to reach the big number annual value. From the Eagles perspective if you are keeping up with the market that is the market. Ertz has every right to ask for something different but it would be fair to know how the November offer in terms of yearly cash flows compares with the backloaded one. If the front end cash is better than before I don’t think you infer that it is insulting.

3. Has less cash over the next 4 years than Austin Hooper

This is where we, most likely, get into the new vs old money debates. Austin Hooper signed a free agent contract that will pay him $42 million in new money over the next four seasons. Ertz is under contract for the next two years at $14.91 million (he can increase that slightly with escalators). The “new contract” would kick in in 2022, which would make the four year total to be the two existing years plus the two new years.

As a point of reference Kelce will earn $25M in new money in the first two years of his new contract. If the Eagles offered Ertz an 8% increase over Kelce, $27M over two years, Ertz would come in lower than Hooper over 4 years. $27M over two would be the highest amount paid to a tight end over two years not named Kittle (Kittle will earn $33.75 million). If you want to compare apples to apples Hooper will earn $23 million over the first two years of his contract.

Now none of this is to say that this is what happened or what is being offered just that sometimes when you see news like this break you should think critically on it before jumping all over a team or a player. The Eagles may have very well made a junk offer but the way that this is written makes me think that there is more than meets the eye to the situation.

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Alvin Kamara May Put Free Agency Status in Jeopardy

Alvin Kamara, scheduled to earn $2.133 million in the final year of his rookie contract, has apparently missed the last few days of camp according to Adam Schefter of ESPN.

Kamara’s decision could put him in an odd spot if the Saints, who only have around $3 million in disposable cap space, do not extend Kamara. The CBA has rules regarding unexcused absences from the team and a violation of the rules will strip a player of an accrued season toward free agency.

The more well known rule states that a player who does not report to camp on time will lose an accrued season. This is why hold outs are not common in the first four years of a players career. The second rule concerns the player who reports to the team and then holds out. This is open to interpretation however as the player must miss a “material period of time” to lose an accrued season.

What is a material period in the NFL? I am sure a team would argue a day. I’d argue six days if we are talking about the preseason. Players are allowed to miss five days of camp and not be subject to forfeiture in a different section of the CBA which at least somewhat implies that could be the threshold.

However it’s important to understand that the rules regarding accrued seasons is meant to be more harsh than forfeiture provisions and in general the NFL is very harsh on players holding out as it pertains to fines. Kamara for instance could be fined $40,000 for each day missed. In any event the accrued seasons question could be answered in a hearing after he returns to practice.

This is a risky play by Kamara because he would lose his unrestricted free agent status if he loses an accrued year. His situation is different than all the first round picks who have held out because they have five year contracts so they all have one accrued year they can give up. Running back’s have a hard enough time finding money in free agency and it would be even harder to find money when you need a team willing to part with a 1st or 2nd round draft pick to sign you. The difference between a RFA tender and franchise tag would likely be at least $3.5 million for Kamara.

As I have talked about before players like Kamara are impacted by the lack of success of the big money running backs after signing extensions. While a few are out there who may change the narrative, the fact is the first two who reset the pay scale, Todd Gurley and David Johnson, were both failures and that scares other teams. The running back salary crash of the early 10’s was all related to failures of big ticket player after big ticket player at the position.

Kamara situation is made even more difficult when you consider that the Saints have limited cap space this year and are millions over the salary cap in 2021. Many may see this year as the last run for the Saints before they move on in a post Drew Brees world and rebuild their team. Would they really want a $13 million a year running back to rebuild around? By holding out he is putting a lot of faith that the Saints want to do that. I’m not sure they are.

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Jaguars Release Leonard Fournette

The Jaguars completed the final touches on dismantling their roster by announcing the release of running back Leonard Fournette early this morning. Fournette was in the final year of his $27.15 million contract he signed as a rookie and set to become a free agent at year’s end.

Originally Fournette’s contract was fully guaranteed but after multiple run ins with the Jaguars organization which included a suspension the Jaguars voided the guarantees. This is, as far as I know, being contested by Fournette in a grievance. The amount at stake here is $4,167,393.

Fournette only has three seasons of work so his contract will be subject to waivers. It is possible that the Jaguars announced this move so early today in the hopes that someone with a low priority on the waiver wire may offer a trade at the last minute. That would be ideal for Jacksonville because it would take the grievance out of their hands for the most part as the new team would take on Fournette’s contract.

If Fournette clears waivers expect the Jaguars to take on a dead money number of $4.471 million for his signing bonus proration and a $1.79 million charge for the grievance. That second charge will change based on the outcome of the grievance.

The Jaguars are one of the rare franchises in the NFL that do not include offsets on their rookie guarantees, so they would receive no money back if Fournette wins the grievance and signs elsewhere. Ideally they need him to be claimed or traded for to 100% protect themselves financially.

Fournette’s drafting by the club in 2017 was more or less the downfall of the Jagaurs even though it occurred in a season where the team wound up going 10-6 and showing the most promise it had shown in a decade. The teams decision to draft him meant they would bypass the QB position in a draft that included Deshaun Watson and Patrick Mahomes. Instead the Jaguars opted to chase the potential of failed starter Blake Bortles who they would extend a year later in a move that was more about salary cap space and lack of options than anything else.

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Yannick Ngakoue Agrees to Paycut

Yannick Ngakoue has agreed to a near $6 million pay cut to get out of Jacksonville, signing a one year, $12 million contract in place of his $17.788 million franchise tag to help facilitate a trade to the Vikings.

This is not a typical move for elite level players. Last season Jadeveon Clowney took a $1 million pay cut to move to Seattle while under tender as a franchise player and he was the first to take under the tag since Jason Pierre Paul’s injury forced him into a new contract in 2015. Given the Vikings lack of cap space and limited ways to create room this was a must to get the trade to happen now and Ngakoue into camp.

The consequences of this decision could be much more than just a $6 million pay cut. Has Ngakoue remained on his tender it would cost the Vikings $21.345 million to tag him next season. Unless they negotiated tag value protection into his contract it will now be in the ballpark of $16 million depending on the salary cap level next year. In essence that makes this an $11 million gamble that the Vikings will extend him in the offseason.

Part of the logic in agreeing to the pay cut likely lies with Ngakoue having no desire to be in Jacksonville. Each week he held out he would leave behind $1 million in salary and if never traded could have been out $8 million and still needing to play in Jacksonville. It also avoids the risk of his tag just tolling if the season was cut short before he signed it.

This would have been a much different situation for he and the Jaguars if he was willing to report and play nice for a few weeks. He would have earned his full salary and still probably wound up traded while the Jaguars would have gotten a better package.

However you can’t put a price on happiness and perhaps the financial risk is worth the chance for a fresh start with a new team.

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