The Cost to Trade Michael Thomas

Michael Thomas of the New Orleans Saints sent out a tweet this morning that seemed to indicate further unhappiness with the Saints organization and that has brought about questions concerning his future.

The tweet would seem to be in reference to the Saints likely leaking that Thomas did not keep in contact with the Saints this offseason and then having surgery seemingly late in the process. Rumblings of Thomas’ unhappiness with the Saints started last year so it is natural for people to assume he continues to be upset with the team.

Thomas signed a five year contract extension in 2019 which is worth $19.25 million per year and contained around $60 million in guarantees. Due to the Saints need for salary cap relief they restructured Thomas’ contract this year and have already committed to pay him $11.6 million of his original $12.6 million salary regardless of whether or not they would trade him.

The cost to trade Thomas on the salary cap would be $8.9 million this year ($9.1 million if he earned a workout bonus), a savings of just $1 million for the Saints, and $22.7 million next season, a savings of $2 million off his current salary cap figure. Those are very minimal savings for a cap starved team with no real answers at receiver without Thomas. So I would think they would ask quite a lot for him.

The last time the Saints traded a player in a similar situation was when they traded Jimmy Graham for a late 1st round pick just one year after signing him to a contract that made him the highest paid NFL tight end in history. However they did not prepay his salary prior to the trade. The team did pay Junior Gallette a significant amount of money in the offseason in 2015 and then released him in the summer. That would be a much closer financial situation to their situation with Thomas.

It would be hard to picture the team trading Thomas given his importance when healthy but if they have already decided that the situation in not manageable they will likely be able to get more for him now than next year if the situation blows up similar to the Steelers and Antonio Brown where the Steelers received pennies on the dollar for a talented player.

If a team acquired Thomas they would only be on the hook for $1 million this season. The charges in 2022, 2023, and 2024 would all be affordable- $15.8M, $16.45M, and $19.7M,- assuming he does not look for a new contract. Thomas salary next year is guaranteed for injury and is fully guaranteed on the 3rd day of the league year so in theory you could get Thomas for free this year when he returns and then release him if things do not go well. A team would likely look at this as a three year, $33M investment which is dirt cheap for a player of this caliber.

One option for the Saints in a trade would be to acquire another veteran player with the trade partner paying off most of the salary to help offset the fact that the Saints paid Thomas’ salary already. They would also get a draft pick as well in that scenario.

I doubt any of this happens, but hopefully this clears up the salary cap implications of a trade.

CJ Henderson on the Trade Block?

Jeremy Fowler of ESON is reporting that the Jaguars may be shopping cornerback CJ Henderson just one year after drafting him with the 9th pick in the 2020 draft.

Though it has happened before it is extremely rare for a draft pick to be traded so early in a contract. The most recent example was Minkah Fitzpatrick who was traded from the Dolphins to the Steelers a year and a few games after being drafted. Prior to that may have been Trent Richardson. Henderson only played in 8 games as a rookie after an injury forced him to IR.

Fowler did clarify that there is nothing bad between Henderson and the team so perhaps they are just floating things out there to see what they could recapture in a trade or to let teams know he could be available in season. Henderson obviously was thought highly of around the NFL and with the Jaguars already having paid $13.1 million of his $20.5 million contract he would provide a team with incredibly cheap talent at the position.

The Jaguars are a team on the rebuild and while they did add a lot of parts this year to be more competitive they have many long term needs, some of which can probably only be addressed in the draft, such as finding a better pass rush, left tackle and potentially receivers.

The team did sign Shaquill Griffin in free agency and the 2022 class looks to have some value. Among younger players who will be available are JC Jackson of the Patriots, Darious Williams of the Rams and Marshon Lattimore of the Saints. Veteran names include Stephon Gilmore. Joe Haden, and Kyle Fuller. There may be a case to be made that if they can recover a 1st round pick they could have a better chance of filling the corner void in free agency and other voids with a pick. Otherwise it makes little sense to bail that quick on a young player especially one that hasnt event played a game with the new coaching staff.

Breaking Down Darius Leonard’s Contract Extension with the Colts

Darius Leonard is the new leader among linebackers, signing a lucrative contract extension worth up to $99.25 million over five years. Per a league source with knowledge of the contract here is the breakdown of the deal.

In 2021 Leonard will keep his same $3.384 million salary and also receive a $20 million signing bonus. This increases his salary cap number from $4.22 million to $8.22 million this year. Leonard’s salary is now fully guaranteed.

In 2022 Leonard will have a base salary of $6.9 million which is fully guaranteed at signing. The cap charge will be $10.92 million.

In 2023 Leonard will have a base salary of $15.7 million which is guaranteed for injury. $2.7 million is fully guaranteed at signing. Another $12 million will be guaranteed on the 5th day of the 2022 league year and the final $1 million will be guaranteed in 2023. His cap number will be $20.2M

In 2024 Leonard has a $13.61 million salary of which $6.5 million is guaranteed for injury. That will be fully guaranteed on the 5th day of the league year. He will also earn a roster bonus of $2 million on that day. His cap figure will be $20.12M.

In 2025 Leonard will have a $14.84 million salary and a roster bonus of $4.2 million which is earned on the 5th day of the league year. His cap figure is $23.55 million.

Finally in 2026 he has a $19.19 million base salary and a $19.7 million cap charge.

In each year of the contract he can earn up to $510,000 in per game bonuses. There are Pro Bowl bonuses in 2022, 2023, and 2024 that can increase the value to $99.25 million.

Overall this is, as I mentioned earlier, a strong deal for Leonard. He will rank at the top of the NFL among off the ball linebackers in annual contract value at $19.7M per year, about $700,000 more per year than the next closest player.

His $52.5 million in injury protection is $1.5 million higher than CJ Mosley’s with the Jets which may be the most impressive part of the contract. No other player had a paper guarantee of more than $40.5 million other than Mosley.

The $33 million in full guarantees at signing are second in the NFL to Mosley’s $43 million, though getting over $30 million is a new benchmark.

A $20 million signing bonus is the highwater mark among current linebackers.

The first year cash earnings of $26.9M will top Deion Jones’ prior high of $25.75M.

The three year value can reach of $59.25 million is also a market high and could reach $60 million if he continues his Pro Bowl streak.

The contract builds nicely on the recent record setting Fred Warner extension and follows a similar pattern in the cash structure of the deal. I would expect the next top linebacker to top the $20 million per year mark even if that will require a battle over a team not wanting to be the first to move the needle.

The extension avoids any headaches caused by the franchise tag and the large cap charges that could come with it if they needed to use it in 2022 and 2023. As is typical for a franchise player the two year cash is worth more than two projected tags, but that provides the Colts with more cap certainty while also making sure they have their guy for the third year at an affordable cost.

As far as downside possibilities go, the 2022 and 2023 seasons are virtually guaranteed based on the structure of the contract and the vesting dates on the salary. 2024 would be the first season Indianapolis could look to move on if things went south. Leonard would carry an $8M dead money charge if released before his salary vested. More often than not this position is usually a safer bet that far into a contract, but in a worst case scenario that would be the outcome.

View Darius Leonard’s Salary Cap Hitshttps://overthecap.com/player/darius-leonard/6921/

Dolphins and Xavien Howard Agree on Modified Contract

The Dolphins and Xavien Howard have agreed to modify his contract and end a “hold in” of sorts that saw Howard recently ask for a trade from the Dolphins.

From various reports the Dolphins did what I, and many others, had kind of expected at times. They didn’t materially change anything with the contract outside of adding incentives and then guaranteeing next years salary, a year where his status was never really in doubt in the first place. The $3.5 million in incentives will give him the opportunity to earn over $16M this year, which was the benchmark he was looking for to be the highest paid corner on the team.

Per Armando Salguero here is the incentive breakdown:

Howard has been a Pro Bowl player in two of the prior four seasons so this is a fair incentive that he likely has a chance to earn. Since the Pro Bowl is often about how known you are he probably has a better than 50% chance since his name was in the news so much this offseason. I believe that this should count against the cap as a LTBE this year.

The playtime incentives are also attainable. He has his the 70% threshold, three times in the last four seasons and the 80 and 90% thresholds two times. It sounds as if these have a team kicker attached to them for cap purposes. Generally these are easily attained (it requires improvement in one of the worst areas for the team the prior year) and are only used to prevent the charges from hitting the cap. The Dolphins only had around $8 million in cap room so this was probably a necessity.

The team guaranteed $6.775 million in 2022 that was already guaranteed for injury and agreed to injury protect the rest of his salary and let it become fully guaranteed early next year. It is a safeguard for Howard but in reality has very little chance of making a major difference other than for headlines.

The Dolphins apparently also agreed to reopen discussions next year on a market contract. I have no idea what that means as teams often makes some assurances that mean very different things to the player and the team and then lead to more headaches down the line. My guess would be that they will be open to doing this again if he plays well.

Because this is a renegotiated deal the Dolphins will be forced to include an extra $710,294 on the salary cap for the 17th game. Prior to this that would have counted as a benefit and not impacted the cap. My assumption is that Howard’s cap charge will increase by $1,710,294 this season.

Darius Leonard Signs $99.25M Contract Extension

The Colts have made it official locking up linebacker Darius Leonard to a five year extension worth $99.25 million according to Ian Rapoport of NFL Network.

The contract sounds as if it will hit at least three milestones. The $19.85 million per year will make him the highest paid player at the position, topping the $19.005 million per year figure earned by Fred Warner of the 49ers, who signed a deal just a few weeks ago. His $52.5 million in injury protection will surpass the $51.5M in injury guarantees received by CJ Mosley of the Jets. Finally his $60 million three year total will surpass Warner’s $58.725.

It is possible that the effective value of the contract will be a bit cheaper than reported depending on whether or not the Colts acknowledged the 17th game on the schedule this year. They did not as part of the Braden Smith extension. That would not change where he ranks on the three metrics above, but it would bring the three year effective value under the $60M number which I’m sure was a key target.

Leonard’s deal should set the stage for the first $20 million a year linebacker to be signed within the next two seasons. The Mosley contract was the real springboard for the position in 2019 which led to Bobby Wagner moving the market to $18M a year a few months later and now Warner and Leonard earning over $19 million a year two years later. Currently linebacker and safety are the two positions that have yet to break the $20 million a year barrier.

We have seen this kind of salary growth years ago at linebacker and eventually watched it creep back down due to a lack of return on the overall results of the team. It will be interesting as the prices increase if a similar pullback occurs. Now this is a different approach as the expensive linebackers right now are players who are considered more coverage players than in the past where being a vocal leader and tackle monster was more than enough to get a big deal. In that respect these players may have more of an impact on the modern NFL approach.

As we get more details on the contract we will update the salary cap figures for Leonard.

The League Leaders at Pushing Cap Charges to the Future

We often talk about kicking the can in the NFL which generally means teams using some type of bonus to spread out salary cap charges over the life of the contract, but more often than not we just focus on teams restructuring contracts. Today I wanted to look at the teams who deferred the most cap charges to the future via bonuses this year. That includes a regular signing bonus at the start of a contract as the use of the SB accomplishes the same task- pushing money into the future to achieve the best possible roster this year. The only bonuses that we will not include are bonuses for draft picks and undrafted players as those are more or less dictated by the NFL.

Here is the list of teams and how much money they pushed into the future this year.

TeamFuture DeferralsPlayers
Cowboys$77,758,3338
Saints$73,467,16515
Buccaneers$72,540,0008
Eagles$59,277,86716
Patriots$57,450,00014
Packers$57,305,38213
Ravens$54,050,00010
Rams$54,000,0005
Football Team$53,950,0006
49ers$52,908,00010
Chiefs$49,906,8574
Bills$49,824,25011
Browns$49,664,0838
Giants$48,370,00014
Seahawks$45,900,00013
Lions$44,912,5007
Bears$42,868,57814
Titans$40,583,3336
Panthers$40,071,00012
Steelers$36,780,25011
Cardinals$34,727,50010
Jaguars$32,362,50012
Texans$31,663,33311
Vikings$28,863,3335
Broncos$27,417,0836
Bengals$27,412,5008
Falcons$22,700,0003
Chargers$18,400,0003
Colts$12,000,0001
Raiders$11,700,0003
Dolphins$7,475,0004
Jets$2,750,0003

The average deferred cap charge in the NFL was $41.2M on 8.6 players. The median was $43.9M on 8 players.

At the top of the list we have three teams who clearly have a great deal invested in this season. Dallas deferred nearly $78 million in cap charges to future years to put their team together this year. Most of this was from a gigantic contract signed by Dak Prescott, but it would seem clear that Dallas is all in on this season. The Cowboys are projected over the cap next year so they will need to use a similar strategy next year.

The Saints cap problems this year were legendary and they used bonuses for 15 players with years remaining on their contract. They deferred over $73 million to maintain their roster this year and to try to compete for a Super Bowl in the post Brees era.  Like Dallas the Saints are well over next years cap so expect more of the same next year too.

Finally we have the Buccaneers who went void year and signing bonus crazy in an effort to keep the 2020 Super Bowl team relatively intact for 2021. Thy moved over $72.5 million to the future. The Bucs do have some cap space next season but will have free agents to deal with if they have similar success this year.

After those three we get a big drop off to the Eagles at $59.2 million. The Eagles were way over the cap this year and used a bonus on 16 players, tops in the NFL. The Eagles are right up against the cap next year as well and seem to be using a rebuild on the fly kind of approach.

On the bottom of the list are the Jets who basically used no bonuses at all this year in contract signings. They will only defer $2.75 million in future cap charges. The Jets will have a ton of cap room next year and a ton of flexibility if they move off this strategy and more than enough room even if they use the same strategy. The Jets eyes are probably more on 2022 than 2021.

The Dolphins followed the Jets path this year with just a tough over $7 million in deferred cap hits. Like the Jets they have a ton of cap room next year and while they have more invested in this year, they probably are looking at 2022 as a major year if their QB works out this season.

The Raiders were third at $11.7 million and closely followed by the Colts at $12 million though the Colts could have another extension or two on the horizon. Both teams have a lot of cap room in 2022 but I think you could make an argument that they both could have tried to do a little more this year.

Thoughts on Josh Allen’s Monster Contract with the Bills

Josh Allen signed an eye popping contract worth $258 million over six years and Mike Florio of PFT has the details so let’s take a look at the contract based on Florio’s article.

The contract averages $43 million a year in new money and has about $100 million fully guaranteed at signing. Allen negotiated a player friendly vesting schedule along with non-guaranteed workouts that should put his virtual guarantee in the ballpark of $165 million. Florio talks about some rolling guarantees that may run with the contract but without the particulars of that it is hard to comment on it. Patrick Mahomes has a mechanism where basically every salary is guaranteed a year early so perhaps that is what is being done here.

The contract, due to the length, is harder to compare than other contracts. It was a very surprising decision to go with a six year contract which will tie Allen to the Bills through 2028 while the rest of the NFL had recently moved to a four year contract length (Dak Prescott, Deshaun Watson, Carson Wentz, and Jared Goff being the notable names).

In terms of money guaranteed at signing the numbers themselves are record setting, but in terms of the percentage of the contract value they are not. The $100 million number represents about 38% of the new money in the contract while the injury protection is around 60%. By comparison Prescott and Watson received 78% and 71% of their contracts protected for injury and 59% and 50% fully protected at signing. Again this is not exactly and apples to apples comparison because of the length of the contract and what I am assuming is a commitment of some sort to early guarantees on non-guaranteed salary in the future.

Here is the new money cash breakdown of the top four players at the salary scale. One thing to note about this contract is that it does not seem that Allen factored in the extra game check he was scheduled to earn this year and next. So realistically we should take about $1.57 million out of the cash flows, but since it was clearly negotiated without that in mind I’ll present the cash flows based on the salary as if the 17th game check did not exist.

PlayerYear 0Year 1Year 2Year 3Year 4Year 5Year 6
Josh Allen$40,450,000$68,450,000$98,450,000$137,950,000$176,450,000$216,450,000$258,000,000
Dak Prescott$0$75,000,000$95,000,000$126,000,000$160,000,000
Patrick Mahomes$6,000,000$35,450,000$75,900,000$113,850,000$155,800,000$197,750,000$257,700,000
Deshaun Watson$20,000,000$55,000,000$92,000,000$124,000,000$156,000,000

I should note that I am missing $56K from the salary here so my guess is its in this years salary so I am estimating into the first years of the deal. The contract itself is much stronger than the Mahomes contract and if you notice is actually bigger than the Mahomes contract through the same length at $258M to $257.7M.

In terms of up front money the deal will come between the Watson and Prescott numbers and then making the turn in year 2 to take the role of actual market leader, out-earning Prescott by about $3.5M. The gap grows bigger in year 3 with almost a $12M gap between the two stars and then $16 million after four years.

Of course the big difference is that one player will be a free agent at that point and one will be locked into a contract. Is the tradeoff worth it?  Not getting into the time value of money part of the equation I would think Prescott will come out ahead assuming of course he plays well. The difference to make up though years 5 and 6 would be $98 million, which for a QB probably will not be difficult.

Salaries continue to rise for the position and generally the third contract for a good QB will increase from contract to contract. For example Aaron Rodgers went from $22M a year to $33.5M  a year, Matt Ryan from $20M to $30M and even Eli Manning went from $16 to $21M. Considering off this current contract Prescott will earn $95M in the first two years, that number will rise significantly over time which should more than make up for the two less years that appear to basically be guaranteed for Allen.

The bigger difference is can you get to a third deal?  In Allen’s case he will 33 when this contract ends  and likely late 30s for deal 3. Prescott will be 31 and 36, so in theory he could get two more market setting contracts while Allen will primarily be in the market for one, though it is not impossible to get three. I would think the important thing for Allen is to probably follow the Roethlisberger model long term which would be to dig in on the next contract after this to maximize his chance at the third deal.

It is an interesting case study to see what works out better. More certainty for the player like Allen or more upside potential for the shorter term contract like Prescott.  Years ago many QBs signed long term mega contracts and regretted them which is what changed much of the recent dynamic. Teams are willing to trade off even these guarantee structures because for the QB the guarantee often means nothing since so many finish out their contracts, so any tradeoff for more years, lower APY, etc…generally works out well for the team. In any event this is stronger than the Mahomes deal in every way possible and it is not the two deals in one structure that Kansas City utilized.

As for releasing Allen if things go badly it will cost the Bills a lot. Based on Florio’s breakdown there is no feasible way to really cut him prior to 2025. Based on how the Mahomes contract works I would guess that 2026 to 2028 has protection one year early so probably something like a 2027 release with a big check coming Allen’s way if they release him. This type of structure increases the APY of the deals at any point if a player is cut and is an insurance of sorts for the player taking a longer term contract. The cap structure may lend itself to a restructure in 2025 which would be beneficial for Allen as well if the team has to convert salary for cap relief.

As for how this impacts the rest of the market it is anyones guess. You have Lamar Jackson and Baker Mayfield on the horizon and they will probably both be faced with the option of a six year deal or maybe taking a little less and doing a four year deal. The four year deal may also bring with it the headache of a franchise tag battle along the way as well. I would expect Jackson to earn more than Allen. Mayfield is more of a mystery to be but clearly would be in the $41M a year+ range if the Browns are talking extensions. My gut feeling is that all of the players signing the long term deals will be viewed as reasonable cost players two or three years from now unless they take a Wentz like plunge where the player just becomes an albatross.

View Josh Allen’s Cap Page