Eagles Create $14.04 Million in Cap Space

The Eagles have restructured two contracts to create $14.04 million in cap room for 2021.

The Eagles conversion of $8.49 million of salary for Johnson into a bonus opened up $6.792 million in cap room for Philadelphia. The move will increase Johnson’s cap charges by $1.698 million in each of the next four years. Johnson, who was signed to a lucrative $18M a year extension in 2019 has bonuses paid in the first four years of that contract totaling just over $43 million. This is in addition to prorated money that still exists from his prior contract. It is probably the most leveraged contract in the NFL. Johnsons cap charge this year will now be $11.056 million and next year will be $15.763 million before increasing to $23.017 million in 2023 when the cap is expected to rise.

Barnett added four void years to his contract and converted $9.061 million to a signing bonus. The move created $7.2488 million in cap room and reduced his 2021 cap figure to $2.8022 million. If Barnett is not re-signed next year he will leave the Eagles with $7,2488 million in dead money assuming the Eagles did not utilize a mechanism to allow them to June 1 him if an extension is not reached. The Eagles have done that in the past with players.

The Eagles had approximately $2 million in cap room so most likely these moves are designed to give them breathing room for the regular season and additional carryover to 2022 where they are currently projected to be around just $3 million under the cap. Given that Barnett’s contract is a pure net neutral move (any carryover will be offset by his dead money next year assuming it is a straight void) I would guess that part of the reason for that restructure was to also have enough cap room this year in the event they were looking to trade for a player as the Johnson savings should have been enough to get through the regular season.

Breaking Down Nick Chubb’s $36.6 Million Contract with the Browns

The Browns signed running back Nick Chubb to a three year, $36.6 million extension tonight, locking up one of their key offensive players for the foreseeable future. The contract will make Chubb the 6th highest paid running back, in terms of average per year, in the NFL while guaranteeing him $20 million.

Per a league source with knowledge of the contract Chubb will receive $17.133 million in fully guaranteed salary at signing. The full guarantee consists of Chubb’s 2021 and 2022 base salary along with a $12 million signing bonus and $3 million option bonus in the second year of the contract.   The remaining $2.87 million in guarantees will vest to a full guarantee in 2022, making the $20 million figure virtually guaranteed at signing.

The full contract details are as follows

In 2021 Chubb will receive a $920,000 base salary and a $12 million signing bonus. His salary cap number will be $4.78 million, about a $500,000 increase from his current cap figure.

In 2022 Chubb will earn a fully guaranteed $1.213 million base salary and $3 million guaranteed option bonus. His cap charge will be $5.21 million this year.

In 2023 Chubb will earn a $10.85 million salary of which $2.867 million is protected for injury and will be fully guaranteed by 2022. The salary cap charge is $14.85 million.

In 2024 Chubb will earn a non-guaranteed salary of $11.775 million and up to $425,000 in per game bonuses. The cap charge in the final year of the contract is $16.2 million.

The new money in the contract works out to $36.6 million, a number that takes into account the fact that Chubb would have received a raise from his stated base salary this year due to a 17th game. This has not been a standard across the board when negotiating contracts.

Chubb’s contract tracks with the Joe Mixon, Dalvin Cook, and Derrick Henry recent contracts while being significantly stronger than the Aaron Jones contract despite a similar APY. The strength of Chubb’s contract more or less lies in the two year cash flow and the length of the contract, which at three years is the shortest $10M+ per year RB contract on the market. While the length of contracts at this position often is not as important as other positions it does give Chubb a chance to keep his career moving if he is one of the few who evades the running back breakdown. On a per year basis Chubb will receive $6.67M in guarantees which compares favorably to the players mentioned above  and moves past Cook’s $6.375 million per year in guarantees. The amount of prorated money relative to the size of the contract is also very strong for Chubb.

Chubb will receive $24.4 million in new money over two years which blows past Aaron Jones’ $20 million and falling a hair under Henry ($25.5M), Cook ($26M) and Mixon ($27.5M). Chubb has less downside than all of these players due to the per game bonus structure. Chubb has just $425,000 in per game bonuses across the contract which locks his two year in at $24.4M and gives him a worst case scenario of $36.175M if he plays all three years. That puts the downside value of the contract above the downside value of each of the other players.

The cash numbers here represent a strong commitment from the Browns. We estimated a two year franchise tag value for Chubb of $21.1 million and he will instead earn $24.4 million over that same timeframe. If the Browns were to walk away before paying out that $24.4 million they would wind up paying Chubb $16.4M for the 2022 season.

The salary cap structure provides a short term benefit for the Browns but may leave them a bit compromised in the future. The team takes just an extra $500,000 in cap charges this year and $5.2 million in cap charges in 2022. That is important for the Browns who are right up against the cap next year if a Mayfield extension is not complete. That cap number jumps to $14.85 million in 2023 which is the year when the salary cap is expected to increase.  As mentioned above it is doubtful that the Browns want to release Chubb in 2023 so they could be in a position where they look to restructure Chubb depending on what the cap looks like that year. The deal does keep the franchise tag completely open for Baker Mayfield in 2023.

The contract protects Chubb from the uncertainty of free agency. Free agency has basically been a nightmare for running backs in recent years. Jones’ contract only paid him $10M per year over the first two seasons and Melvin Gordon only reached $8 million a season. The Browns could have gone the Packers route and chanced free agency but instead treated Chubb like a franchise players anticipating him to be their version of Derrick Henry for the next three seasons.

You can view Nick Chubb’s salary cap page here.

Xavien Howard Officially Requests Trade

We have known for some time that Xavien Howard was unhappy with his contract in Miami and tonight he went public with his thoughts.

I’ve written about Howard’s contract before and where things may have gone sideways for him, but this was always going to be a very difficult spot for him given that he signed his contract only two years ago and was injured in the first year of the contract.

From the sound of Howard’s statement he did acknowledge that he was not going to get a raise nor looking for one. He indicated looking for more guarantees that helped Miami with the salary cap and that Miami turned that down. Howard essentially has no protection in his contract after this year. He has a partial injury guarantee for 2022 and next to no dead money at any stage of his contract due to receiving such a small signing bonus.

My guess is that Howard’s side looked for the Dolphins to convert $11 million of his 2021 salary to a bonus this year and likely a partial conversion of next year’s salary to be paid as a 2021 bonus. Doing that would have lowered his cap number this year and next year and thus have been “cap friendly” for the Dolphins while at the same time improving the cash flows and potential dead money in the contract which does offer some protection for a player.

Such moves are kind of a kicking of the can from the player side. The hope is often to get to redo the deals each year continuously borrowing from the future to the present while at the same time getting closer to the end of their contracts when they have a better chance of renegotiating to a better deal.

The fact that Miami said no is not surprising for a few reasons. One is simply that the contract is too new and they are dealing with a situation where the team paid for 5 games one year and then great play the following year. That is not really an optimal time for a team as it sets the stage for every player who has a banner year to ask for more money. Teams also often do not like suggestions on managing their own salary cap and I’m sure that the statement here is not well received in that regard.

The second thing is that Miami may not view Howard as part of the long term. As crazy as that is to say it was not long ago that Miami completely gutted the team to get their salary cap in order and amass draft picks. Most of their success is going to be based on the play of Tua Tagovailoa and how much of a step forward he takes in 2021 will probably give Miami a strong idea whether he is the guy or whether they need to plan for another draft pick.

If the QB is not successful I don’t see any scenario where Miami will value a pair of $15M+ cornerbacks when they could turn those players into draft picks. Converting salary to a bonus, especially future salary, doesn’t put Miami in an optimal position with their salary cap. Staying the course is probably best for the team this year and then they can see next year what is in the best interest for the team.

I don’t think Miami will trade Howard this year. They have a lot invested in this season and need him to put the best team on the field this season. I would guess that Miami would need to be offered a young cornerback and a 1st round pick to think about trading him. Never say never but it is rare that the players in the NFL are able to force trades like this.

Wilson and Lance Remain Unsigned

With every team reporting to camp we still have two rookie who remain unsigned- Zach Wilson of the New York Jets and Trey Lance of the San Francisco 49ers. It is really inexcusable for teams at this stage to not have their rookies signed. Every year we project the contracts and are usually within $100 of the entire four year total so there is nothing that goes into that part of the process. So let’s look at what the issues could be.

  1. Guarantee Language- This was an issue before with the Jets when they drafted Sam Darnold in 2018. Basically team’s have various terms by which the guarantees in a contract can void. Recent issues have regarded things like suspensions for helmet to helmet type of stuff which is a vastly different scenario than being suspended for drugs. If I remember correctly the Jets issue with Darnold was that they wanted a fine by the league to also constitute a violation of the guarantee. 

Overall, this is basically meaningless. If a player is good it doesn’t matter if he does or does not have a guaranteed salary and you should be going into this with all positive thoughts. How many players in the top 10 had their guarantees void, thus protecting the team?  Since 2011 just three- Dion Jordan, Justin Gilbert, and Leonard Fournette. Of the three only Fournette’s was for something that might be an issue with a guarantee clause while the other two were hit for standard stuff.

  • Bonus Payment Schedules- A big deal was made a few weeks ago when the Jaguars agreed to pay Trevor Lawrence his entire signing bonus with two weeks of signing. This was a concession by Jacksonville as it is a big amount to pay at once. I could see this being a legit hang up except, as noted by Joel Corry, both the Jets and 49ers have done this already.

So if this is the issue for either team they are either breaking with precedent or are simply waiting until the last second to avoid making a payment until it is absolutely necessary, which is not really in the best interest of the team.

  • Offsets- Salary offsets allow a team to avoid paying out a guarantee if the player, after being released, earns a salary with another team. This has generally been the biggest hang up over rookie contracts even though it is just a fight for the sake of having a fight. In reality it does little for both sides. If the player is great, which everyone thinks the player is when they draft them, he won’t be released so offsets do not come into play. If the player is so bad that he is going to be cut, well the offset isn’t going to come into play then either because nobody will want the player. Essentially you have to have a player who is not good enough to play for you but is good enough to get a look elsewhere. More often than not the player only receives the minimum salary from another team in that scenario so at most you are looking at insuring $1.055 million of a contract worth $34 to $35 million dollars.

Here is the reality- it almost never comes into play. I looked at every top 10 selection since 2011 and determined their rookie contract outcome. Of the 71 draft picks who have already reached a rookie contract outcome guess how many an offset would have come into play? One. Ereck Flowers. That is it. Of the other players who were released outright they had already voided their guarantees or simply never were signed to play anywhere else. So really what are you fighting over?  A 1 to 3% chance to recover about 3% of the entire contract value. I’m sure you can pat yourself on the back for that while sitting on the couch after you were fired for drafting a bust.

Teams should give their top picks the best chances to succeed and haggling over all these things isn’t it. Ultimately Im sure these teams will use some modified no offset roster bonuses which is a solution that could have been reached ages ago. They can also dangle no offsets and in return ask for no lump sum payments. Use it as a bargaining chip but if you lose out in this part of the draft are you really hurt because of it?

My guess is one is waiting on the other to sign. If Wilson gets the big bonus and no offsets it gives Lance a reason to dig in on that and vice versa. The Jets may also be hoping to get the 49ers in as a data point on a more team friendly structure.

Hopefully both teams get their deals done ASAP. At least in the 49ers case they have a veteran QB on the roster and he is the one who they claim they are going to start. The Jets do not have that luxury. They decided not to waste the resources on a backup with experience so they are all in on Wilson. Having him miss even one practice is just bad. You have a new coach and new culture. Don’t be the same old Jets at the negotiating table and get them off to a rocky start. That is far more important the $1M you might save four years from now if Wilson is a disaster.

Aaron Rodgers and the Packers Resolve Contract Situation

Adam Schefter has been all over the story today regarding the Packers and Aaron Rodgers with the two sides coming to an agreement on a revised contract. Here are some of the key points brought up by Schefter and some thoughts on them.

1. Rodgers 2023 season will be a void year– This is the optical illusion clause that is going to get a lot of attention and basically mean nothing. Rodgers spent most of the offseason saying he wanted out this year and instead will be guaranteed his release two years from now when he will be 40 years old. This will disqualify the Packers from receiving any compensatory compensation when Rodgers is a free agent so in that sense it does give them slightly more incentive to trade him in 2022 but we have been saying all along that 2022 was always the likely trade year given the cap numbers in his contract and the team’s current status. 2023 would be Jordan Love’s fourth year in the NFL and the team clearly would want to take a look at him by then to decide about an option, so it was hard to see a Rodgers scenario in 2023 under any circumstance prior to this.

2. Packers agree to review Rodgers situation after the year– I would guess this means that they will agree to discuss with Rodgers his feeling about the teams in 2022 and likely give him permission to seek a trade. There are scenarios where he might say no (perhaps they win a Super Bowl in 2021) but my feeling is again there will be no material change to the decision matrix for Green Bay.

3. Rodgers contract will be adjusted for more cap space– The Packers will wind up converting a portion of his 2021 salary into a signing bonus to create much needed cap room. My guess is they will also pay him his workout money that he lost out on by not attending the offseason programs. This should give them the ability to either offer Davante Adams a stronger contract offer for an extension or to help roll over money into 2022 so they can tag Adams next year for the Last Dance II.

4. Mechanisms will be put in place to address issues with the team– I would guess this relates to the void year in the contract as well as language that removes the ability of the team to recover any bonus money in the event of retirement in 2022. Perhaps this also covers the no franchise tag provision that will be received in 2023.

All in all I don’t anticipate this changing the decision much to trade Rodgers. The team should be able to save $11.3 million on the cap in 2021 with a restructured contract. That would bring his dead money up to $28.5 million if cut or traded in 2022 and $11.327 million if not cut until 2023. While his cap number should balloon to $42.678 million in 2022 that is probably not a big deal. If he stays with the team he can certainly restructure down. If he is cut it makes little difference what the cap number is. There are ways they can tinker with the contract to bring the number down for the sake of a trade which is why any trade would likely be agreed to in February so the contract could be adjusted accordingly.

Deshaun Watson to Report to Training Camp

While there were rumors regarding Deshaun Watson not reporting to training camp for the Texans most of the offseason it would have been surprising if those rumors were true. According to Ian Rapoport while Watson is not happy with the team he will indeed report to training camp today.

As with every potential veteran holdout in the NFL, Watson would have been subject to mandatory $50,000 per day fines if he held out of camp, which is the reason why so many of the players unhappy with their contracts have reported. But the financial penalties could have been more severe for Watson than other players.

Watson signed his contract just last summer and the contract contained just under $112 million in guarantees. Watson still has $82.54 million in salary guarantees remaining in the contract of which $45.54 million is fully guaranteed with the balance becoming guaranteed in 2022. Standard contract language in the NFL would typically void any and all future guarantees if Watson was to fail to report to the team or leave the team without their consent.

While normally that would not be an issue for a player of Watson’s talent level (a player like Watson would be a free agent for about 5 seconds), there are still off field issues hanging over him which could impact how quickly he would be signed and/or for how much. Reporting keeps Watson in good standing from a contractual perspective while the next steps play out with the league.

Packers and Davante Adams at Contract Impasse

In a season full of Packers drama it looks like we can add another situation to their list as the Packers and star receiver Davante Adams are apparently far apart on a new deal according to Ian Rapoport.

This was always going to be a difficult contract for the Packers in large part due to the wild discrepancies in the WR market which has one player earning, on paper, $27.5 million a season while the second highest paid player is at $22 million and just two other player earn at least $20 million a year. It is not even a question that Adams is the best receiver in the NFL but it may very difficult to justify that he should be the highest paid.

Right now the standard contract in the market is Keenan Allen at $20.025 million per season with $32 million fully guaranteed. There are some that would argue that the real value of this year is $19 million a season (that is the three year value) but I think every team in the NFL acknowledges it as a legit contract extension. Things get murky from there.

Back in 2019 the Falcons signed Julio Jones to a contract extension worth $22 million a season. Jones at the time was upset that he essentially “lost” in a contract negotiation in 2015 and he wanted to have his salary increased. There were three seasons left on his contract and Atlanta gave in, adding three more years to that contract that would work out to $22 million a year in new money and $64 million in guaranteed salary. That deal was painted as an outlier from the minute it was signed. I think if we go back most would say the Falcons just saw it as an eight year investment and moved the needle accordingly.

Things got murkier last season when the Cardinals acquired DeAndre Hopkins for a can of beans from the Houston Texans. Hopkins, who similarly “lost” in a contract extension, was unhappy with his deal that had three years remaining. Houston wanted no part of it so they traded him rather than get caught up in the drama. The Cardinals had no sunk cost in Hopkins and agreed to add two new years to the contract at a ridiculous number of $27.5 million a year. Clearly they did not look at this as an extension even if technically it is valued this way. To them it was a five year contract worth about $18.9 million a season, which was in line with everyone else’s investment in the position. $42.8 million was the full guarantee here.

One of the big problems for the Packers, in my opinion, is that they already once took a deal like Hopkins’ and justified the contract. Laremy Tunsil of the Texans signed a gigantic $22 million a year contract extension that blew the market away. Tunsil was also a player who was traded for and the actual number on it was closer to $19 million a number that that seemed to be acknowledged when Ronnie Stanley of the Ravens signed an extension worth under $20 million a season.

The Packers, however, were responsible for justifying the market when they later signed David Bakhtiari to a $23 million a year extension. Even though the Hopkins contract is even more of an outlier than the Tunsil deal it is hard to justify to a player “we can’t make you the highest paid because the contract is not a real contract” when they already agreed set the precedent to throw any type of favorable team valuation out the window. I think the Bakhtiari deal also throws another wrinkle into the equation.

When Adams signed an extension back in 2017 he signed one year after Bakhtiari signed an extension to stay in Green Bay. Adams was paid $2.5 million more per year. While you can argue who improved more (both are considered better now than they were then) the Packers also kind of tipped their hand as to what the value is of one position to another. At a minimum that should put Adams as $25.5 to $26 million per season. Anything less than that really does not make much sense within the Packers own framework.

As for questions on structure the Packers do not do guarantees outside the signing bonus. The last time around Adams received $2M more than Bakhtiari, which would put this number at $32 million. Bakhtiari’s guarantee was $10 million under the Tunsil contract and an equivalent figure would be about $33 million taking into account Hopkins full guarantee. That should not be an issue for the Packers and Adams so I do not think this would be a structure issue alluded to by Rapoport unless Green Bay is really short changing him.

The first year cash could be an issue. Bakhtiari received a $25.5 million raise which would put Adams salary at $38 million just to match and again the argument would be that he is worth more. That could be a tough number for Green Bay who is salary cap starved right now. They need cap relief and that would not give them any which could also be a complication. Along with their unwillingness to guarantee future salary it might put the guarantee too low to fit in the structure the Packers want.

Overall it is a complex situation and one the Packers helped create last season. Now they have to find a way out to avoid a whole season of drama surrounding their two star players.