The Devaluation of the Running Back Continues

Devonta Freeman signed a new contract today that will make him the highest paid running back in the NFL at $8.125 million per year. I mentioned on Twitter today how every time a running back signs these days its just a reminder of how much the position has been devalued in today’s game. I mentioned LaDainian Tomlinson just as a well known benchmark for the market and figured I’d expand on that here.

Running backs used to be the staple of the offense for many teams for a pretty long period of time. Most long time fantasy players certainly remember how much stock was put into that position and in turn many of those players gained following that they may not have had otherwise outside their own fanbase. So I wanted to go back in time, and I’m sure I am missing plenty of names here, just to illustrate what the market looked like during that time period.

The following table has some of the annual contract values of the bigger name backs of the era and what that annual value would be in today’s cap dollars of $167 million.

PlayerYear SignedAPYCap LimitInflated Value
Portis2004$8,200,000$80,582,000$16,993,870
Tomlinson2004$8,000,000$80,582,000$16,579,385
Holmes2003$6,900,000$75,000,000$15,364,000
J. Lewis2006$8,700,000$102,000,000$14,244,118
L. Johnson2007$8,600,000$109,134,000$13,159,968
McAllister2005$6,700,000$85,500,000$13,086,550
Alexander2006$7,700,000$102,000,000$12,606,863
S. Jackson2008$8,700,000$116,729,000$12,446,778
James2006$7,500,000$102,000,000$12,279,412
F. Taylor2006$6,600,000$102,000,000$10,805,882
Westbrook2007$7,000,000$109,134,000$10,711,602
F. Gore2007$6,900,000$109,134,000$10,558,579

The numbers are pretty staggering. Each of these players would be the equivalent of a player earning at least $10.5 million a year today. The only running back who earns that much is Le’Veon Bell of the Steelers who plays on a 1 year franchise tag. The next closest is Freeman who just signed for the $8 million number.

Now I understand that some will say that Freeman simply isn’t a true top player (I doubt the same argument would be there for LeSean McCoy who earns $8 million), but I think most would agree he is pretty good. He’s a nice versatile player that is a perfect fit for the Falcons offense. But we can also go backwards with this and see what his $8.125M per year would be worth in that timeframe, which is anywhere from $3.7 to $5.7 million a year. Some players who would have been in that range are players like Rudi Johnson, Lamont Jordan, and Travis Henry.  It’s less than Marion Barber received in Dallas.

The change in the position really started when many of these big contracts were regretted after a season of being signed. I’d say that was around 2007 or 2008 when the one back approach was being eliminated and more focus was paid on receivers in the passing game.

Still Adrian Peterson and Chris Johnson were able to land massive contracts in 2011 that were more or less on par with the top contracts of the earlier era. The difference was that the Arian Foster’s, McCoy’s, and Matt Forte’s were not really able to build on that. They still signed outstanding contracts but there were closer to the lower names on this list. Back then there was still a game of leapfrog on top deals being played or at the least coming very close to the market leader.

The final burst to me came when the Panthers shockingly signing Jonathan Stewart to a $7.3 million a year deal in 2012. That was one of those contracts where everyone has to take note and say there is something not right here. I think that caused teams to get stronger in their stance against the running back. There hasn’t been a contract that silly at the position until the Jaguars signed Chris Ivory last season to a $6.4 million a year contract.

This is really the only position in the NFL to see this level of long term stagnation. Even if Bell signs a long term contract for $11 million a year, which is still low, he’s going to be the only guy with everyone else $2 million or more behind. He’ll become the outlier like Peterson and Johnson became.

You can’t make separate rules for different positions, but the RB position is one where they would really benefit from only having to sign 2 year contracts if drafted or maybe a max of 3 years with the ability to renegotiate after 2 years. Players would still be looked at as very valuable if signing at 24 or 25 rather than 26 or 27, but barring any rules change it doesn’t look like the market dynamics will change anytime soon.

Contract Extensions and Lack of Real Guarantees

Kevin Seifert of ESPN had a good piece today on the Vikings recent changes in their contract philosophy, notably the extension of players with two years remaining on their contract. This was in reference to the Vikings making big investments in DE Everson Griffen and DT Linval Joseph, who both had two years left on deals signed a few years back.  It is a strategy that more teams should follow.

Extensions of contracts are done for many reasons, but the Vikings are really doing something here that costs them very little to reduce their own risk and its something they should benefit from. In my mind if you are negotiating an extension the framework for the negotiation should be that you are avoiding the free agent process and looking to come to an agreement that effectively mimics what would happen in free agency.

This is where the concept of “new money” comes into the picture. New money is the amount that he player earns beyond the terms of his original agreement. For Griffen, whose numbers were reported on by multiple outlets, that was $58 million over four new years. Essentially the contract is telling us that if Griffen were a free agent he would earn $58 million on the open market.

Obviously there is some give and take with those numbers (by extending him 2 years out the Vikings should be taking on more risk hence there should be a discount factored in) but I think they are pretty fair as are Joseph’s, which were reported at $50 million over four years. But time and time again we see the guarantee or virtual guarantee aspect of these contracts fall by the wayside.

When you sign a player in August to an extension it tells us one very important thing- that player was in no way, shape or form being released this season. Secondly it tells us that barring a really devastating injury they were not being released the following season. If that was even a consideration by the team they would never enter into negotiations for a major contract extension and they would simply play the contract out. These two years of salary were virtually guaranteed to the player.

Griffen was scheduled to earn $15.5 million in 2017 and 2018. $7 million of that was clearly guaranteed and the other $8.5 million almost a virtual certainty. How much is Griffen going to earn now over those two years?  $19 million. According to PFT how much of it is fully guaranteed? About $15 million, or essentially what he was already guaranteed to earn.

This is where these contracts fall off the rails for me. When we look at contracts for free agents what we are looking at are full guarantees on the new contract somewhere between $20 and $40 million.  If our extension is designed to take free agency out of the equation how in the world does a $3.5 million raise over 2 years justify absolutely no real guarantees for when the extension kicks in? Its not as if they are paying a large signing bonus to make it hard to release the player on the cap or just from a psychological standpoint.

For teams this is brilliant. You are buying a $3.5M option and in return locking in a player at 2017 dollars for absolutely no risk down the line. There are plenty of other teams that are doing this and for whatever reason it is never picked up on by the player side to demand more.

In our premium sections this is the reason we present “effective” or new guarantees when comping players because while we get so tied up with “new money” the secondary part, which should be “new guarantees”, is never a consideration. This is basically a classic move by a team, especially for younger players with option years, to be able to significantly reduce the real guarantee by simply guaranteeing existing salary and then just throwing in a bunch of injury guarantees to get a big number out there to make everyone happy.

At least with some of the younger players teams will lay out more money upfront but when we get into veteran contracts like these with the Vikings it opens a whole new avenue for teams. Only a few select players (non QBs of course) in the past were able to get a third big contract in the NFL and this is a terrific way for teams to not really take much of a risk but have it look as if they are making a big one.

For teams that are re-signing players after their contracts expire rather than doing what the Vikings and a few other teams are doing it’s a big mistake. These is so much more benefit to extending as early as you can to reduce your risk to both cap increases and player skill declines in the future rather than waiting until the last possible minute, but the player side does need to wake up and see what these teams are really doing before giving up their future for what amounts to a pretty small increase in guaranteed money.

On Odell Beckham and Contract Decisions

The other day Odell Beckham said that he wants to be the highest paid player in the NFL. I’d say there is about as a good of chance of that happening as me being named the next general manager of the Jets, but lets explore further. Mike Florio of PFT did outline a case in which the Giants should consider signing Beckham to a massive contract, which of course I disagreed with, but I think it brings up a good point about things to consider when negotiating an extension for a player.

While we all get caught up in numbers on contracts and thinking about who wins and loses, the main purpose of a negotiation is to come to an agreement that both sides are happy with. When it comes to NFL contract decisions there is a great deal of risk for both sides and in many ways the contract is the transfer of risk from one party to another.  When you take into account the value of that risk you can better come to a fair price.

A player like Beckham, who has two years remaining on his current contract, right now bears the majority of the risk. Beckham, who is worth over $17 million a season, is currently playing the next two years for about $5.15 million per year. Since Beckham is already a proven player there is no risk involved for the Giants at this point since a $5 million receiver generally only produces around 600 yards and a few scores a year. He’ll do that in his sleep. But for Beckham he has to bear the risk of both injury and lessening productivity. While the latter seems unlikely in the next two years the former is a real concern.

Once Beckham signs a contract with the Giants the contract will both increase in size and also grow in guaranteed salary. Once a large portion of the contract is guaranteed the team is the side now bearing the risk of both injury and sliding productivity. As players age both are a real concern.  The benefit for the Giants is if Beckham stays injury free and plays well beyond the guaranteed portion of the contract the team will likely have a bargain at the position. So how do you value this?

Florio brings up a relatively basic decision tree in his analysis. In his matrix he anticipates that the Giants will franchise tag Beckham in 2019, 2020, and 2021. He then anticipates a potential franchise tag in 2022 if allowed by the league. Add the numbers up and the Giants will be paying Beckham over $127 million over the next 6 years, so it makes more sense to do a deal that averages more than Derek Carr’s because that will be cheaper in the long run. The problem with just taking that basic scenario as a given, and why teams don’t use that as even remotely probable, is because it fails to take into account all the various things that can happen between now and 2022 to change the value of the player.

In 2022 Beckham will be 30 years old. He currently averages around 1,300 yards and 11 TDs a year. Since 2000 how many seasons have there been for players 30+ years of age to put up that many yards and double digit touchdowns? 6. Marvin Harrison (he did it twice), Randy Moss, Terrell Owens, Brandon Marshall, Rod Smith, Mushin Muhammad and Joe Horn. There are plenty of productive players but we are talking about the consideration in the above analysis that a 30 year old receiver would be worth nearly $45 million in 2022 to give the Giants any real benefit in taking a deal today that would make Beckham the highest paid player in the NFL. That 30 year old better be 24 year old ODBJ special to be remotely worth that kind of coin.

Players are good one day and bad the next. Remember Santonio Holmes in New York?  He got kicked out of a huddle by his own teammates. Mike Wallace and Percy Harvin were worthless big ticket items. Was it the money? Was it age?  Granted they are not the same class of player as Beckham but Moss himself went through a period in his late 20s where people questioned whether he was finished before landing in New England.  These are the risks that the team is going to need to be compensated for to sign an early contract extension.

The first thing ‘Id look at in assigning a probability to a fourth tag scenario is how often do we see three tags occur?  I think the last and maybe only player to have it used three times was Walter Jones of the Seahawks about a decade ago. Even two tags is a bit of a stretch. Most often the two tags have been used for kickers. Kirk Cousins and surprisingly Trumaine Johnson are on it this year. I believe prior to this the last positional player to get two tags was Anthony Spencer of the Cowboys in 2011.  For everyone else it’s a one time proposition. Why? Because so much risk stays on the player when they are forced into playing on the tag and the cash on the tag is far lower than on a new contract, even if the tag carries a high APY. Its team leverage.

There is no reward or give and take in paying Beckham three franchise tags plus another $28 million in a contract signed in 2017.  Given the way most players age the Giants would make out better 99% of the time simply tagging each year and walking away when the value isn’t there anymore. From a cash perspective it’s almost always cheaper for the team to go year to year unless they hit that third tag.

The right way to really value the contract is by performing a scenario analysis to help mold your decision tree. Let’s look at the receiver market and the potential outcomes for Beckham. The four scenarios for Beckham are an extension, 1 tag and a new contract, 2 tags and a new deal, 3 tags and a new deal, and finally 4 tags as proposed by PFT. Just to make the numbers easier Ill assume a 10% raise from the Brown deal if he takes a new contract today. To put the numbers in context here is what the top player earn over 4 year periods.

PlayerYear 1Year 2Year 3Year 4
Demaryius Thomas$22,000,000$35,000,000$47,500,000$56,000,000
A.J. Green$26,574,000$37,074,000$47,824,000$60,000,000
TY Hilton$18,458,000$26,458,000$37,458,000$50,458,000
Dez Bryant$23,000,000$32,000,000$45,000,000$57,500,000
Julio Jones$25,324,000$36,824,000$47,324,000$59,824,000
Antonio Brown$29,075,000$44,200,000$55,500,000$68,000,000
Beckham- 4X$18,280,000$40,210,000$71,790,000$117,270,000
Beckham- 3x$18,280,000$40,210,000$71,790,000$103,772,500
Beckham- 2x$18,280,000$40,210,000$72,192,500$88,830,000
Beckham 1X$18,280,000$50,263,000$66,900,000$79,330,000
Beckham 0x$31,983,000$48,620,000$61,050,000$74,800,000

The most important things to consider here are the cash flows. By going the franchise tag route Beckham is taking a $13 million risk for a gain of about $2 million the following year, and a $5 million gain over 4 years. If he makes it to the second tag its now an $8 million risk for a $10 to $14 million gain.

So how do you quantify that risk and reward?  While its not easy to find a great subset of players for Beckham because he has been so good, we can estimate from some younger stars in the NFL the odds of being good enough to be tagged for a third time or offered a massive contract at the age of 29 after two tags.  (You could also use franchise players as a point of reference, but that is more time consuming to do).

The list of players I came up with using PFR that averaged at least 1,000 yards between the ages of 23 and 25 were Randy Moss, AJ Green, Larry Fitzgerald, Brandon Marshall, Dez Bryant, Calvin Johnson, Anquan Boldin, Antonio Brown, Julio Jones, Alshon Jeffery, TY Hilton, Mike Wallace, DeSean Jackson, Darrell Jackson, Braylon Edwards, Santonio Holmes, and Marques Colston.

Of those probably just 1 (Edwards) wasn’t worth a tag consideration at the age of 27 so the risk of non-productivity between now and 2019 is limited. How many were worth it coming off the age 27 season?  Green, Fitzgerald, Marshall, Johnson, Brown, Jones, Hilton, De. Jackson, and Colston. So there is basically about a 55% chance that hes worth a second tag and a 45% chance he will either need to take a one year “prove it deal” or a lower level market long term contract. You can tinker with those numbers with a bit with a sensitivity analysis as Beckham is far more Green, Fitzgerald and Megatron than Wallace or Edwards, but you get the idea.

Who would be worth a third tag/big extension after age 28? Thus far Green is the only clear one that would fall off. Jackson and Colston certainly would not be worth a third tag, but would get a high market contract. Other than Johnson, I’m not sure any would really be seriously considered for a third tag.

You can get pretty complex with this stuff and make a very solid matrix of outcomes, taking into account complete failure, but for the sake of just doing a basic look at Beckham I’ll look at those two year numbers as a 55% of happening and a 45% chance of being worth around $10M (2nd tier money). As we move into the three tag scenario Id only give him about a 5% chance of the third tag and a 1% chance of the 4th tag. When we move into extensions in those years I think you can arguably go with a ratio of about 35% chance of a high market contract and 65% chance of a mid tier contract. Again Ill just completely discount the odds of a very low end contract.

So if we look at all our potential outcomes what does the 4 year salary come out to be?

ScenarioProbability4 Year ValueOutcome
2020 High Extension/Tag24.8%$79,330,000$19,634,175
2020 Low Extension20.3%$48,280,000$9,776,700
2021 High Extension20.0%$88,830,000$17,766,000
2021 Low Extension30.0%$60,210,000$18,063,000
2022 High Extension0.56%$103,772,000$581,123
2022 Low Extension3.4%$81,790,000$2,780,860
2022 Tag1.0%$117,270,000$1,172,700
Total100.0%$69,774,558

So basically if Beckham fails to reach an agreement and begins the franchise tag route, odds are he will earn around $70 million over a four year period.  The lowest end salary would be just under $50 million, which is worst case for him. Again you would do various estimates for some of the probabilities since Beckham is so good as well as more estimates for future contract values based on market growth rates for receivers, but in general any offer above $70 million across 4 new years is a contract that should be given strong consideration by Beckham.  It locks in value and better front end cash flows while eliminating the risk associated with playing things out and landing a low tier contract.

How much over $70 million the Giants would need to go would depend greatly on Beckham’s risk tolerance and that’s what the Giants are really negotiating against when doing a deal. My feeling is once you reach close to $79 million it becomes a no brainer for him as they essentially pays him the same as the scenario of playing on the tag one time with far more money up front.

Even though that is a hefty price, the Giants benefit from that as well because they roll his $8M salary next year into the guarantee package giving them more ability to move on from the contract if Beckham goes off the rails like some of the other players. They also eliminate the risk of major market movement, though I don’t anticipate that as being very likely at the position at the top. Also no holdouts or other headaches related to his contract next year.

But this is one of those areas where you end up doing this for a living its important to understand all possible scenarios and determine whats the best way to incorporate that all into a strong offer sheet so that both sides can get a fair deal done. If you study the nuts and bolts of the dollars in these deals see if you can determine what the concession points may have been and in what way both sides thought they benefited. If Beckham wants to actually get a deal done he and the Giants will find some common ground that makes it work for both of them, but that common ground is not relying on the least likely scenario. Beckham asking for $25M a year is about as reasonable as the Giants offering him $7 million a year.  Those are least likely outcomes for a career any way you slice it. It makes for great talk, but isnt going to get anything done.

Texans Could Have Some Contract Problems

The Houston Texans could be entering a tricky situation in the next two years on the defensive side of the field regarding player contracts.  The three players in question are JaDaveon Clowney, J.J. Watt, and Whitney Mercilus.  JaDaveon Clowney is entering year 4 of his 2014 rookie contract and is scheduled to earn $17,303,227 through the 2018 season.  This offseason the Texans exercised the 5th year option in Clowney’s contract worth almost $14 million for the 2018 league year.  Current reports indicate the Texans intend to monitor Clowney’s progression and health in 2017 before starting contract extension negotiations in the 2018 offseason when Clowney has one year remaining on his contract.

Clowney had a very productive 2016 campaign.  The stat line may not support that assessment but the game tape does not lie.  With the return of J.J. Watt on the other side of the defensive line, this could provide Clowney more “one on one” opportunities to pad his stat line, increasing his market value heading into the 2018 offseason.  If Clowney’s progression continues on the current trajectory he could be in line for a large contract extension; possibly a contract worth more than multiple all-pro J.J. Watt.

Watt will have 4 years remaining on his player contract heading into the 2018 offseason; 4 years of non-guaranteed salary totaling $57 million dollars.  Considering that Watt potentially lines up both on the interior portion and on the end of the defensive line, it is difficult to classify his market value based solely on 3-4 defensive end players.  $14.25 million per year for the next 4 years with zero guarantee liability puts the Houston Texans in a favorable position with Watt.  This assumes Watt returns to previous form after multiple back surgeries.  If Watt does continue to provide production similar to his past seasons, his camp could push for a new contract based on the edge rusher market, and depending on the size of contract Clowney receives.  This could be another Duane Brown situation for the Houston Texans as Watt may want seek out new guaranteed money if his production returns.

Another player that could be affected by a Clowney extension is outside linebacker Whitney Mercilus.  Currently Mercilus has 3 years remaining on his 2015 contract extension totaling $16.5 million.  This contract is one of the most favorable veteran contracts currently in the NFL when comparing production versus cash paid to the player.  One could argue that Mercilus is already out performing this contract based on his production.  Mercilus is in a similar position as Watt as he is entering the non-guaranteed salary portion of his player contract.  This is another example where the Texans have a productive player under contract for multiple years with low salary liability.

Watt & Mercilus will be watching two specific situations and how they play out over the next 12 months; the Duane Brown situation and the JaDaveon Clowney situation.  Brown is attempting to get a new contract extension with two years of non-guaranteed salary remaining; and Clowney is in position to receive a contract extension that could be valued higher than Watt’s contract extension.

Could a Players Strike Work for the NFL Players

Mike Freeman had another thought provoking article about a strategy down the line for a players strike. There are a number of good points here on planning how to win, but the reality is it is going to be very difficult to get a group of players to ever consider a strike and before you can use a strike to win you need somewhere around 2,000 players to feel loyal to the cause. That is not easy. The biggest issue just deals with the economics of the NFL and the general lack of a foundation to “rally” the players around the idea. We’ll look at some ways in which the union can try to get those players to feel they benefit from a strike the way the top players would.

Whenever we hear about strikes in the NFL it never really comes with specifics. Even going back to the NFL lockout of 2011 it’s hard to really see what the union objectives were. Most of the talk, at least publicly, was centered on the option of decertifying the union. Based on the eventual deal that was signed it would seem that the unions major issues seemed to deal with player safety via reduced practice time, no 18 game schedule and shorter offseason workout programs, added injury protection that would be standardized across the NFL, an attempt to move money from rookies to veterans, and finally the tying of team cash spending to the salary cap rather than a focus on salary cap spending. I don’t think any of those are issues that would get the league as a whole to strike and needless to say as soon as it was time to do football activities the players were ready to get back to work ASAP.

Its 6 years later and still I’m not sure what the vision is. One group of players talks about the commissioner having too much power. On another day another group is talking about guaranteed contracts. Another deals with more player safety. Another is focused on veterans earning more. Another wants more overall money. It’s haphazard and sounds more like some of the stuff coming out of Washington DC these days where you talk about a million things but don’t have a real focus on any.

In reading what older players say about the last lockout/strike many feel as if they were misled about the deal. Things seemed to come down quickly and the final selling point was more money to veterans. That never materialized. Even though many of those players are gone the sentiment probably remains to some extent and if you want to recapture the majority of the players the communication has to not only be better during negotiations but it has to begin now to sell everyone on an idea and make sure that these are focus points for the union.

The economic reality of the league is that the majority of the money is tied up in a very small portion of NFL players. While they are not earning as much as their NBA counterparts the average salaries of these players is very high. The league is likely on pace to spend about $5 billion in salaries to players this year. About 17% of that total will go to 50 players. 50% of the total will go to just 250 players, about 12% of the entire league population.

While buy in from these top players is important since they are the stars of the league, they should be economically in a position to sacrifice for some big goals; the 75% of the players who make up just 30% of the leagues wealth are not. For the young players in that group you are potentially asking them to sacrifice the rest of their career. Around 45% of players drafted in the 7th round are cut by the first year of their draft and 35% of 6th rounders don’t make it to year 2.   The 5th round is about 30%. UDFAs are obviously less. On the veteran end you have many guys going for a last payday and hoping they have one more year where they can make the league and pocket around $1 million.

So many of the topics that are touched on are going to benefit the 250 players in the league who have already “made it”.  There are probably just as many on the low end who would effectively be giving up their careers, some before it ever got started, by striking. It would be near impossible for the union to expect those players to not cross unless there is something concrete in it for them.

Last season there were about 1,270 players who were on contracts that averaged the veteran’s minimum ($1.065 million) or less. Currently about 15% of those players, about 195 in all, are no longer under contract to a NFL team. We are not yet even in training camp and rosters have to be slashed from 90 to 53 so you can be sure that number will likely at least double by September. The upper echelon (those over the minimum) has lost about 12%, or about 100 players. That number will grow too but not nearly as much over the next month.

Either way it’s pretty simple to see that a strike is likely going to mean that close to 25% of those supporting the strike are effectively giving away their career for the strike, most of whom did not make much playing the game. Most of those players have not been fortunate enough to be in a position where their earning power has put them in a position to be in a good financial position. It’s a very hard sell to those players.

On top of those numbers there are also a good chunk of players aiming for free agency that would likely have their contracts toll if a strike occurred. That’s another year of injury risk. That’s one less year of earning power. That again is a hard sell.

While talking about “more money and guarantees” sounds great on paper what the last CBA negotiation showed is that more revenues did not benefit the majority of the league.  Salaries, particularly for quarterbacks, spiked. Teams invested more at the top and used new rules regarding no minimum cap spending to create contracts that hurt some of those close to the top and in the middle by giving far more flexibility to teams via contract structures that did not exist nearly to this extent pre-2011. If Im the 230th pick in the draft Im only going to strike if I can help my bottom line, not Andrew Luck’s.

The union has to first find ways to fight for the bottom before they move to the sexy topics of fighting for the top. They need to start rallying the base on that idea now not simply as a throwaway four years from now. So what are some ways to accomplish that?

Ensure the bottom tier is paid.

I think to do this the NFLPA has to set forth one plan and one firm negotiating objective. Since we determined about 200 players will definitely lose their job in any given year and more likely that number will be closer to 400 by the time the season starts the union has to find a way to protect those players.

The union should set up two funds for this purpose. One fund is to keep the players financially stable for the year. I would accomplish this by paying every player under contract at or below the veterans minimum a practice squad salary. For the sake of argument we can call this $110,000 give or a take a few dollars. This needs to cover our 1,300 minimum players who would be expected to be on a roster plus another 320 players who are going to lose practice squad opportunities. This would work out to be a fund of about $178 million to be distributed equally among the lower income players.

The negotiation aspect of this deals with roster sizes.  Currently the NFL mandates 53 roster spots plus a 10 man practice squad. If, even for just one year with options to continue the expansion, they bump the active roster to 63 along with the practice squad it will create an additional 320 jobs. That would cover a large percentage of the low tier players who would normally not be asked back in any given year.

These players would be given a mandatory one year split salary guarantee on their current contract or receive a mandatory split guarantee on any one year extension signed after the strike if they were a free agent. This is to make certain that those spots are held by the players who risked a season rather than being used for another group of undrafted players who had not been exposed to the same risk.

In addition each NFL team would be given a salary cap waiver for up to 10 players on a contract with an APY under the vet minimum. For a player on a rookie contract they would only be eligible if they were drafted in the 4th round or later. The league did something similar for veterans in the last CBA offering a cap credit for players under contract prior to the strike. The problem with that is it really didn’t prevent the release of those who needed it. This would protect players with the highest cut rates.

The second fund would then cover lost wages for those not asked to return to the NFL. While we have trimmed that group in theory by 320, there are still going to be some 100+ players likely out of work. Some of these are players who were free agents before or after the strike, depending on how tolling contracts are handled. This fund would likely need to be around $70 million.

Raise minimum salaries and growth rates.

Nobody wants a max contract limit like there is in the NBA, but that system has helped the bottom and mid tier players who often sign somewhat head scratching contracts simply because the money has to go somewhere.  In the NFL the increased cap has worked the other way. The union can help fix that by increasing the minimums at the bottom.

As spending requirements go up the star players, particularly in free agency, get paid more and more while those in the middle and the bottom get pinched.  The NFL currently raises minimum rookie salaries by $15,000 per year. In the last two seasons minimum salaries have risen by less than 5% while the cap has risen over 16.5%.  True veteran minimums have risen between just 3 and 4%. Veterans, really should be earning 2-3X as much as rookies, but its not that much anymore.

Those numbers mean that the league had an additional $759 million in cap space they could spend over those two years. Only $39 million of that goes to minimum salary increases. Signing bonus money for draft picks is basically pegged to the salary cap so about $76 million has gone to increased bonus money since 2015 as well as raises for the first and second rounders in each year of their contract. The rest is pumped into the top valued areas on the field leaving the league in a spot where Ryan Tannehill and Sam Bradford aren’t valued much less than Matt Ryan since so many other players are simply earmarked for low valued contracts.

The yearly minimum P5 should have raises based on how much the cap has grown since 2013, basically meaning raises of 7-7.5% per year.  Catchup provisions should be made by increasing both sets of minimums.  If such a change was made this year the rookie 1st year salary would jump from $465,000 to $535,000 while veterans would jump from $775, 000, $885,000, and $985,000 to $1,070,000, $1,340,000, and $1,605,000 respectively. I think you should argue for more (Im basing these off the 2011 CBA where players at the bottom were already poorly compensated especially vets), but this should be the minimum acceptable levels.  This gives the majority of the league a chance to really benefit from any increased revenue splits rather than just going on strike to make the top end earn more.

While this clearly reduces the overall money available to stars, it isn’t going to come from the pockets of those who really deserve it, but instead force the league to think twice about paying as much for average players at expensive positions or make them get more creative with the salary cap. The more creative teams need to be with the cap the better it will be for players who sign longer contracts anyway.

Reduce contract length/increase escalators

This is not going to help veterans but it will make the league a fairer place for the younger players looking to cash in at an early time. If the union can negotiate contracts down from 4 to 3 years it will benefit all young players around the NFL and give them more reason to be firm on the strike even if most won’t benefit from this rule.

Admittedly this is a difficult one for the union to win but an easier compromise might be to increase the current standard escalator from that of the ROFR tender in rookie contracts to any of the tenders based on playing time. This would prevent a situation like a young Richard Sherman being stuck at a $1.5M or so salary while a lesser UDFA could have earned over $2.5 million. There should also be an escalator available in the 3rd year of the contract based on playing time if contracts remain at 4 years. These escalators also need to be guaranteed once earned or treated as incentives once earned.

These were just some thoughts on the subject and I certainly don’t want to see a player strike nor do I think its necessary if the sides, which have many years to hammer out a new deal, actually talk rather than prepare for court like the last go around. But if striking is an option on the table and the union wants it to stick they need to think first about that 1,300 players closer to the bottom and getting them the information they need and explaining what they are doing for them. If come 2020 or 2021 they just do what they did in 2011 and get that years Tom Brady to put his name on a lawsuit as if that is going to do something magical that group wont last any longer than the 2011 group which signed themselves up for a 10 year deal that they weren’t very happy within 2 or 3 years.

Cowboys Extend La’El Collins

The Dallas Cowboys were back in the news today, this time signing tackle/guard La’el Collins to a two year, $15.4 million contract extension per NFL Network’s Mike Garafolo. The move largely “makes Collins whole” after dropping in the 2015 draft following the possibility that he was a suspect in a murder, which he was cleared of being involved in a short time later. At the time Collins more or less stated he would prefer to go undrafted if not selected high enough in the draft and that is exactly what happened. At the time that occurred I looked at the benefits of being undrafted and it worked out for Collins.

Collins will now stand to make about $17 million over the first five years of his career. Had he been drafted in the first round Collins would have had an option year that likely would be worth around $9 million for 2019. If we pull that out from this extension it essentially puts his value somewhere around the 29th or 30th pick in the 2015 draft. Dallas that year had the 27th pick so the numbers are pretty close to where Dallas selected that year.

It would certainly seem as if Dallas was doing Collins a favor here and I am sure some will speculate that as long as Collins was not a bust that they would honor a first round status. It is hard to see Dallas really exhibiting much leverage in this situation at all.  Collins started 11 games as a rookie at left guard and just 3 games last year before landing on injured reserve. The plan this year is to move him to the much lower cost right tackle position.

Those are not the numbers that would merit any kind of extension, even a short term one, given the contractual situation. Collins was under contract this year for a small number, which will be baked into the extension, and the Cowboys controlled his rights for another year at a low number which is not baked into the extension.

That number would have depended on the RFA tag that he was given. Based on his play I assumed that this would be the 2nd round tender which is worth around $2.9 million. If they used a first round tender it would be $4.1 million. The 1st round tender isn’t really used very often and only for high level stars or QB’s, something Collins is not.

Taking that into account Dallas is effectively paying Collins, a right tackle, between $11.3 and $12.5 million for a one year extension. The current top contract for a true right tackle is Ricky Wagner at $9.5 million a year. The top guard contract is Kevin Zeitler at $12 million a season.

Im not sure you can spin those numbers in any  way as a positive for Dallas. Even if Collins becomes a top line player the Cowboys still don’t control his rights beyond those first few years. It’s a big departure from the contracts they did in recent years for their top players on the line who are all under contract for a long time.

So sure they did Collins a solid here, but if I was a player on the Cowboys in a similar spot I think Id want the same benefit moving forward.

Thoughts on Le’Veon Bell’s Contract Offer

Yesterday we looked at Kirk Cousins contract offer and today we’ll take a look at Le’Veon Bell’s basics which were reported on today by Tom Pelissero. Per Pelissero the offer included $30 million in the first two years of the contract and $42 million across three years. Unlike the Cousins offer, which was pretty weak by any standard, this seemed pretty strong and it is hard to see how Bell turned this one down so lets explore.

As a pure new contract the numbers would put Bell at $12+ million a year over a five year timeframe. That would be the largest APY for a running back since Adrian Peterson’s $14 million and change contract a few years back.  From a new money standpoint the Bell metrics would surpass Peterson’s on the frontend numbers. They would also obliterate any recent veteran contract. Here are the 2 and 3 year comps:

Player2 Year3 year
Bell$30,000,000$42,000,000
Peterson$29,280,000$41,280,000
McCoy$21,050,000$27,300,000
Martin$15,000,000$21,750,000
Miller$14,000,000$19,750,000
Ivory$12,500,000$18,500,000

So not only is this offer pretty incredible by today’s standards, but historically it’s also pretty solid.

Like with Cousins we can also factor out the fact that he was set to already earn $12.1 million on the year to determine what he is earning purely in new money in the first two years of a new contract. Again these numbers would paint things in a pretty solid light and represent a small raise over Peterson’s numbers, which seem to be a baseline used in the offer.

Player1 Year2 Year
Bell$17,880,000$29,880,000
Peterson$17,780,000$29,280,000
McCoy$16,000,000$21,050,000
Martin$8,000,000$15,000,000
Miller$8,500,000$14,000,000
Ivory$7,500,000$12,500,000

Unlike Cousins, who is in a position to break the bank next year, it is hard to imagine Bell making over $18 million next season to justify passing this contract up. First of all the running back market is simply stagnant. Bell is far and away the best of the bunch, but we don’t have any players in the NFL making over $8.01 million a year.  The high point year 1 payment in the NFL is McCoy at $16 million but he falls way short of Bell’s proposed two year “new money” earnings. So at best I would guess that Bell would break even if he hit free agency and his earnings between now and 2019 would probably fail to reach these proposed numbers.

Not only that but if the Steelers tag him again his salary next year will be just $14.52 million, well short of the number needed to break even. Again this was very different than Cousins. The Cousins offer basically built in the value of a transition tag and shortchanged him on the franchise tag. The two year offered to Bell is stronger than two tags and is the more traditional way things work when  trying to make a sincere offer.

Secondly Bell is an injury risk and a suspension risk. Cousins’ position is more or less injury and age proof for a second contract. Bell’s is a high risk position and his history is terrible. He’s had multiple knee injuries  and been suspended twice. Another injury and suspension is just going to hurt his value. From the standpoint of a suspension he would also stand to lose 1/17 ($712,941) for each week suspended. If he signed a long term deal with a signing bonus he would lose 1/17 of a much lower base salary and just 1/17th of 1/5th of his overall bonus paid in 2017.

So why would he turn this contract down?  That is hard to say. About the only things that could really be at hand here are the issue of guarantees and payment timings.  The Steelers organization offers very large signing bonuses relative to the majority of the NFL, but they don’t guarantee salary beyond that. For example Antonio Brown received $19 million as a signing bonus but not a penny more guaranteed.  That’s simply doing business with the Steelers and you need to accept that when you sign with them.

Pittsburgh is also one of the stronger organizations when it comes to honoring contracts regardless of guarantees. The only team that is probably better in this regard is the Bengals, who often have even less favorable payment terms. The contract structure in Pittsburgh also helps since the cost to cut is high early on. This is how the league used to operate and Pittsburgh is one of the few who still does this way.

Pittsburgh’s standard contract also often contains a second year roster bonus earned in March. I guess it is possible, given Bell’s suspension potential, that they did not want to use that mechanism and preferred a full base salary which would be more open to recovery in the event of a long suspension.

Might the first year payment have been a little light?  That is also possible, though Id imagine under any scenario it was going to not only be greater than what he is currently scheduled to earn but also bigger than McCoy’s $16 million. In any event the number was going to be more than he is set to earn now.

Obviously we aren’t privy to the entire offer but based on what is out there it is really hard to see why this contract did not work for Bell. It is highly doubtful that he will top it by signing next year and if guarantees are the issue well his best offer is going to come from the Steelers anyway next year and that will not include any fancy guarantees like we see elsewhere. I don’t really see the reward here for Bell but I guess we’ll have to wait and see.