NFL CBA

Houston Texans – 2021 Incentive Tracker

Posted on by Troy Chapman

Player incentives are something that myself and Houston fans are not used to hearing about. Rick Smith was the General Manager from 2006 through 2017 (along with capologist Chris Olsen) and did not employ the use of player/team incentives into player contracts. That practice has since changed dramatically with new General Manager Nick Caserio. Caserio came over from New England where incentives were heavily used. Interim General Manager tandem of Bill O’Brien and Jack Easterby started the process in 2020 with incentives sprinkled into a few contracts. Caserio took that to a new level, negotiating incentives into the majority of free agent contracts signed during the 2021 season including offseason and in-season contracts.

Given that Houston fans are likely not familiar with incentives and how they can affect the team’s salary cap; this was a good time to explain how they work. We will also show where each player stands with their individual incentives heading into the last game of the regular season. We will not cover salary escalators as Houston has not deployed escalators as of yet.

For specific details into incentives and the list of specific incentives available, you can refer to the Collective Bargaining Agreement Article 13 Section 6 Part C.

Acronyms:

  • LTBE = Likely To Be Earned
  • NLTBE = Not Likely To Be Earned
  • Def Snap = Player Defensive Snaps
  • Off Snap = Player Offensive Snaps
  • PT = Playing Time

Incentives can effect the player and team salary cap in various ways, and impact the cash spending for the team. Incentives can be used in practically any contract, including rookie contracts. However they are primarily used in non-rookie contracts. Referencing the above link to the CBA section on Incentives, there is a specific list of available incentives that may be negotiated into a contract.

Incentives that are considered to be LTBE will impact the cap charge for the current year. For an incentive to be LTBE, the league will reference the player’s performance in that category from the previous year. For example, if a player has a playing time incentive of 55% of defensive snaps worth $250,000 for the 2021 season. If the player played in 62% of the defensive snaps (no matter what team) then the $250,000 is considered LTBE and would count towards the player’s 2021 salary cap charge.

Conversely, using the same example, if the player played in 48% of the defensive snaps in 2020 then the $250,000 would be considered NTLBE and would not impact the 2021 salary cap.

After the conclusion of the regular season the teams will calculate all the incentives for players to determine the amount of cash earned through incentives on top of the player’s base salary.

If a NLTBE incentive is earned in 2021, and the same incentive is in place for 2022 then the incentive becomes LTBE and will be charged to the 2022 salary cap for that player. The team will also receive a debit towards the 2022 salary cap through the annual adjustment. Conversely, if a player has a LTBE incentive in 2021 that is not earned, then the team will receive a cap credit in 2022 annual adjustment for the corresponding amount and the incentive becomes NLTBE in 2022.

Teams can utilize incentives to manipulate cap space in the immediate year. Looking at David Johnson in the table below, the first tier of his Total Yards incentive is 1,006 yards. David Johnson had 1,005 total yards in 2020. Therefore this makes the incentive NLTBE and does not count towards the 2021 salary cap.

2021 Incentive Tracker

Sounds more confusing that it is. Below is a table for the Houston Texans players that have incentives and where they stand heading into Week 18 of the regular season. The amounts in Bold & Italics are considered LTBE for 2021. Everything else is considered to be NLTBE for 2021. The dollar amounts stack as each tier is achieved. The incentives listed as Yes Achieved, that is based on projection heading into the last game of the season.

PlayerIncentivesDetailValueAchieved
Taylor, Tyrod $   6,500,000 60% Off Snap $  1,000,000 No
70% Off Snap $  1,000,000 No
80% Off Snap $  1,000,000 No
90% Off Snap $  1,000,000 No
60% + Playoff $  1,000,000 No
70% + Playoff $  1,000,000 No
Pro Bowl $      500,000 No
Britt, Justin $   1,800,000 55% Off Snap $      450,000 Yes
65% Off Snap $      450,000 Approaching
75% Off Snap $      450,000 No
85% Off Snap $      450,000 No
Kirksey, Christian $   1,500,000 55% Def Snap $      250,000 Yes
65% Def Snap $      250,000 Yes
75% Def Snap $      500,000 Approaching
85% Def Snap $      500,000 No
Johnson, David $   1,000,000 57% Off Snap $      250,000 No
65% Off Snap $      250,000 No
1006 Total Yards $      250,000 No
1200 Total Yards $      250,000 No
Collins, Maliek $   1,000,000 50% Def Snap $      250,000 Yes
60% Def Snap $      250,000 Approaching
70% Def Snap $      250,000 No
80% Def Snap $      250,000 No
Cannon, Marcus $       750,000 80% Off Snap $      800,000 No
90% Off Snap $      850,000 No
Grugier-Hill, Kamu $       750,000 30% Def Snap $      125,000 Yes
40% Def Snap $      125,000 Yes
50% Def Snap $      250,000 Yes
60% Def Snap $      250,000 Yes
McCray, Justin $       750,000 35% Off Snap $      187,500 Yes
45% Off Snap $      187,500 Yes
55% Off Snap $      187,500 Approaching
65% Off Snap $      187,500 No
Murray, Eric $       750,000 60% Def Snap $      250,000 Yes
70% Def Snap $      250,000 Approaching
80% Def Snap $      250,000 No
Amendola, Danny $       700,000 45% Off Snap $      140,000 No
55% Off Snap $      140,000 No
50 receptions $      140,000 No
60 receptions $      140,000 No
70 receptions $      140,000 No
Brown, Pharaoh $       600,000 30% Off Snap $      150,000 Yes
40% Off Snap $      150,000 Yes
50% Off Snap $      150,000 Yes
60% Off Snap $      150,000 Approaching
Taylor, Vincent $       500,000 20% Def Snap $      100,000 No
30% Def Snap $      100,000 No
40% Def Snap $      100,000 No
50% Def Snap $      100,000 No
60% Def Snap $      100,000 No
Pierre-Louis, Kevin $       500,000 60% Def Snap $      250,000 No
70% Def Snap $      250,000 No
Mitchell, Terrance $       500,000 80% Def Snap $      500,000 No
King, Desmond $       500,000 60% Def Snap $      250,000 Yes
70% Def Snap $      250,000 Yes
Conley, Chris $       500,000 45% Off Snap $      100,000 Yes
55% Off Snap $      100,000 Yes
45 Receptions $      100,000 No
55 Receptions $      100,000 No
65 Receptions $      100,000 No
Wilson, Eric $       500,000 70% + Improvement $      125,000 No
80% + Improvement $      125,000 No
90% + Improvement $      250,000 No
Burkhead, Rex $       500,000 30% Off Snap $      125,000 Approaching
40% Off Snap $      125,000 No
500 Total Yards $      125,000 Yes
650 Total Yards $      125,000 Approaching
Hewitt, Neville $       300,000 50% Def Snap $      150,000 No
70% Def Snap $      150,000 No
Brooks, Terrence $       250,000 40% Def Snap $      125,000 No
50% Def Snap $      125,000 No
Davis, Tae $       150,000 15% Def Snap $         50,000 No
20% Def Snap $         50,000 No
25% Def Snap $         50,000 No

Will Fuller & Bradley Roby Suspension

Posted on by Troy Chapman

News broke yesterday afternoon and evening on two player suspensions within the Houston Texans organization, with WR Will Fuller and CB Bradley Roby receiving 6 game suspensions. Both players took to social media to post the news along with their explanations. The suspensions have yet to be formally announced by the league.

The player suspensions of 6 games means both players tested positive for anabolics (per the CBA mandated suspension protocols). With 5 games left in the regular season, both players will miss the remainder of the 2020 season and the opening game of the 2021 season.

Will Fuller was on pace for the best season of his career with 879 receiving yards on 53 receptions through 11 games. Fuller is playing out the last year of his rookie contract, playing on the 5th year option. Fuller will now forfeit $2,988,824 for 2020, and one game check in 2021 (amount unknown). Fuller is scheduled to be an unrestricted free agent in 2021. It is possible this suspension, on top of his injury history, could affect potential earnings on the open market. Fuller may have to travel the one year contract in hopes of playing a full season to reset his value in 2022.

Bradley Roby is undoubtedly Houston’s most talented cornerback in a very thin roster group. Roby’s performance for 2020 has been on-par based on his performance history. Roby signed a 3 year, $31.5 million contract this past offseason with Houston as an unrestricted free agent. The contract contained $19 million in total guarantees at signing. The remainder of those guarantees (potentially) can now be voided by Houston. Roby’s suspension will cost him $1,511,029 in cash from lost salary and per game roster bonuses in 2020; and $590,074 in cash in 2021.

Roby is scheduled to earn a base salary of $9.5 million in 2021. Of that amount, $8 million was fully guaranteed at signing of his contract in 2020. The suspension should now void that guarantee. Expectation is Roby will remain with the team in 2021; however if the new front office has other plans, the removal of the guarantee does offer flexibility to the team salary cap situation in 2021.

Roby and Fuller missing the first game of the 2021 regular season will also potential void any termination pay guarantees on their contract for the 2021 league year.

Houston will receive immediate cap credits in 2020 and 2021 (for Roby) for the forfeited salary amounts of about $4.5 million.

Quick Thoughts on New Rookie Options and CBA Revenue Split

Posted on by Jason Fitzgerald

The proposed CBA came out today and I just wanted to share a few thoughts on the brief look I had at it since we should know within a week if it is ratified or not. For the most part this CBA reads very much like an extension of the current agreement with some minor tweaks and Im sure some added things related to player safety and data controls (these are the type of things that we may touch on in a book but I’m more into the salary aspect of these things). There were two things that I wanted to talk about a bit- the new rookie option and the proposed revenue split.

One of the bigger changes deals with the 5th year rookie option and  to a lesser extend the proven performance escalator. Depending on where you are drafted these can be looked at as a win or a loss. Let’s start with the option year.

In the current CBA the option was either based on the NFL transition tag if you were drafted in the top 10 and then the 3rd through 25th contracts if you were outside of it. They did fix this to some extent such that every first round pick is treated the same. There are four levels that you can earn in the new CBA. The levels of pay are the 3rd through 25th average contract, 3rd through 20th average contract, transition tag (top 10), and franchise tag (top 5 contracts). The first one is the default while the others are based on playtime and pro bowl selections. Essentially to move up to the transition tag level you need one Pro Bowl in three years and two Pro Bowls in three years to land the franchise tag.

The Pro Bowl is essentially a popularity contest and is generally biased against good players on bad teams. Its easier if you play a skill position or are a pass rusher where you put up more overt stats but can be difficult as a young player to somehow get one let alone two Pro Bowls. A QB who sits his rookie year is really behind the eight ball.

Surprisingly they did not have an alternate possibility for All Pro inclusions, which are very difficult and can also be a popularity contest of sorts but can cover some players who fall through the public voting cracks. Nor did they have a high end playtime incentive. These could have been just another path besides the Pro Bowl.

For the lower part of the draft it’s a no harm no foul rule. They cant be hurt even if its difficult to gain from it. For the top though they may lose out. Players who get no Pro Bowl nods early will go from being a transition tag option to a 3rd through 20th option. That is going to be much lower and lead to more players potentially being locked into bad rookie deals. Will it impact a lot of players?  Probably not but its always best to cover all bases. As a side note I do think the potential of the higher end escalator may knock more running backs out of the first round but that’s not really a CBA issue.

The PPE is essentially similar with everything tied to Pro Bowls if you want to hit the higher PPE thresholds. In a sense its better than nothing since the last one had no way to escalate beyond the lowest tender based on playing time.

When it comes to the revenue split I am just still surprised that this is all the players got for a 17th game. The league basically moved from 46% of revenue to 48% of revenue in exchange for a 17th game. One of the neat things in this CBA is they do give us a number of $7.357 billion a year that is essentially the baseline for the television money the NFL brings in. While technically the split on media is higher than 46% (its 55% toward the calculation that floors out at 46% in the old CBA) I think it’s fair to use that number to determine what the players currently receive on a per game basis from the CBA.

If the players receive 46% of this figure they are receiving $3,384,220,000 of the TV money. That works out to $105,756,875 per team for the season. That payment for 16 games works out to be $6,609,804 per game.

If you run the calculations for 48% we get to $3,531,360,000 for the players of which $110,355,000 goes to each team. Those are both bigger numbers but now we are dividing that by 17 rather than 16. That works out to $6,491,471 per game or about $118,000 less per game than they pay in the current agreement. To balance out the NFL would have had to raise the revenue split to 48.9%.

Of course that’s not the entirely proper way to look at it. 17 games will bring in more revenue and the break even point there would require the media number to increase by a bit more than 2% over the 16 game schedule. That’s likely in the ballpark of $150M a year and they should surpass that easily. If the numbers worked out to something like a 30% increase in media rights on 17 games vs a 20% increase for 16 games that’s around an extra $140K per player for that added game. For a minimum salary player that is a lot. For a potential higher earner its not worth it at all.

In any event the ability to earn more based on the 17th game is strictly based on what type of raise the NFL can negotiate for that one extra game. If the disparity is not that large the players will likely not see the added increase that pushes contracts into a higher salary level. However if we use $2M  a year as our cutoff for yes or no on a vote its basically 65/35 for and that is probably why this will pass.  

Minimum Cash Spending in 2020

Posted on by Jason Fitzgerald

With free agency rapidly approaching one of the questions I am getting pretty often these days is about the spending requirements in the CBA. For those unfamiliar with the NFL CBA there is a rule that requires teams to spend at least 89% of the salary cap over a four year period. The current period, which began in 2017, ends this league year and could give some idea as to who will spend this year on contracts.

Though our cash numbers that we trace are not going to be 100% accurate they should give us a pretty strong estimate of the teams that are in danger of not meeting the 89% threshold. Through last season we did not have any teams that were under $473.9M in spending, which was the mark required to be on pace to hit the 89% mark. The teams that were closest, the Cowboys, Ravens, Colts, and Chargers were all between $477M and $485M. There is a quirk in the rules that could impact teams in cap trouble (spending on bonuses in contracts in February of 2017 should not count towards spending but we track them as cash for the year)  which means maybe the Cowboys and Ravens were slightly under but if it’s the case it should not be by much.

Assuming the cap reaches $200 million this year the four year spending number will jump to $651.8M. Per our estimates we have 11 teams that are under that mark. Of those 11, six should be compliant just by signing their draft picks. Those teams are the Cardinals, Buccaneers, Patriots, Giants, Broncos, and Dolphins. That should leave us with six teams that may have little choice but to spend in free agency this year. Let’s take a look at those teams.

Colts, $43M under– The Colts have pretty much avoided spending in free agency the last few years even with a huge surplus of cap space.  Last year when the unexpected retirement of Andrew Luck came down and the team surprisingly did not ask him to repay millions in bonuses paid just months before the retirement and then followed it up by a seemingly crazy decision to agree to a one year, $28 million extension for Jacoby Brissett I surmised that the team was going to be so far under the spending limit that both decisions were in part driven by this. Seeing how far under they are now I think backs that up. Indianapolis will likely make up half of their shortage in the draft but they will most likely have to finally go out and spend at least a bit in free agency this year especially if they do not keep tackle Anthony Castonzo. The Colts may not want to get tied down to anyone for too long so this may wind up being the landing spot for “rehab” projects that take a one year deal in the hope of improving their stock.

Cowboys, $45 million under- Despite what most people think of the Cowboys they have basically managed a low cost roster for years now. They have a reputation for spending wildly but the fact is they have not really signed a notable free agent in ages. They should hit this number with two tags this year on Dak Prescott and Amari Cooper. Even if Cooper signs elsewhere just the tag for Prescott should be enough since they have other free agents to sign plus $14 million in draft pick bonuses to pay out. So I would not expect them to be forced into anything in free agency.

Ravens, $47 million under– Between a tight salary cap and a cautious approach to extensions and free agency the Ravens have been one of the lowest cost teams in the NFL. Certainly this year they got the most bang for the buck with a low cost team that outperformed all expectations going into the season. The team will probably spend around $15 million on draft picks so they are still well under. This is likely part of the reason why rumors are circulating that the team is considering franchising Matt Judon. A tag for Judon would cost around $16 million and put them much closer to the number. Even if the tag was simply just to trade him part of that logic I am sure is that the most they could receive as compensation is a 3 and that would require extra care in free agency something they couldn’t pull off last year with Za’Darius Smith.  The Ravens did increase payroll last year (they went from being close to the lowest spending team in the NFL for 17 and 18  to around 20th in 2019) and did sign Earl Thomas and Mark Ingram but if there was a year for this team to be even more active in free agency this is probably the year. This is probably a logical spot for some veteran players to chase a ring.

Chargers, $48 million under– The Chargers have more or less been resigned to the fact that they were not going to be a legit competitor last year only adding veteran Thomas Davis and backup QB Tyrod Taylor as UFA’s last season. The team will spend $25 million on their first two draft picks alone so its around $20 million they need to spend. I could see this going one of two ways. Either the team signs a few veterans and someone like Marcus Mariota to just hit the minimum spending number or they try to make a splash for their move and go after either Tom Brady or Drew Brees (I personally cant see Brees leaving the Saints but you never know) , tag tight end Hunter Henry, and actually spend quite a bit in free agency to compete. I see this as one of the more fascinating teams in free agency this year that could stun some people with their decisions.

Bills, $53 million under– Buffalo had to go into a spending freeze due to the mess that the roster was a few years ago and just started to spend a bit last year as they came out from it. The team will only cover around $16M in draft pick spending so the Bills look to be a hit destination for free agents. The team has a huge surplus in cap space so they can probably structure a number of contracts favorably to maintain flexibility after 2021. Buffalo hasn’t signed a notable free agent in ages and I could see that changing this year. While I don’t think anyone is sold on Josh Allen as the guy this is the window to take advantage of his contract so if there is a time to take more risks its 2020 for Buffalo.

There are a few other considerations this year for some of these teams. If they were to extend or restructure players after the season (February 2021) or late in the season signing bonuses should count to help teams meet the number. If the CBA is not extended there are rules that would make it more difficult to do (i.e. extending a Josh Allen in February might not be the easiest thing to accomplish) but it is another route to hit the necessary spending.

The other big question is how do teams approach contracts now that the CBA could expire? I think this year’s free agent group is very strong and we should see a record number of double digit annual contract values being signed but since most teams don’t need to spend will they see this as an opportunity to try to break the union? 

The last time the CBA was set to expire spending hit record lows relative to the salary cap. In part that was because of rules (free agency was more restrictive in 2010 with a number of UFA’s being classified as restricted) but if you want to break any potential strike one of the ways to do that is to not be aggressive in free agency. This week we have seen reports of the NFLPA attempting to advise the players as to how much it would really cost to strike and if there is a thought that this could occur teams may “independently” come to the same conclusion that overspending in 2020 is not wise which could make for a very different free agent period.

NFL CBA Suggestion Series

Posted on by Jason Fitzgerald

Earlier this year I partnered with my co-author of Crunching Numbers, Vijay Natarajan, to touch on 10 things that we thought should be worth looking at in the next CBA. Some may be a bit out of reach but its better to aim high than just settle for something because its easier. Here are the links to the 10 articles.

CBA Suggestion Number 1: Reducing the Length of Rookie Contracts to Two Years

CBA Suggestion Number 2: Revamp the Rookie Contract Rules

CBA Suggestion Number 3: Increase Mandatory Injury Protection

CBA Suggestion Number 4: Raise Team and League Wide Spending Requirements

CBA Suggestion Number 5: Reinstitute Salary Cap minimum Spending

CBA Suggestion Number 6: Salary Cap Amnesty Clause

CBA Suggestion Number 7: The Elimination of the Funding Rule

CBA Suggestion Number 8: Improve the Revenue Split

CBA Suggestion Number 9: Revamp the Franchise Tag System

CBA Suggestion Number 10: Increase Minimum Salaries

CBA Suggestion Number 10: Increase Minimum Salaries

Posted on by Jason Fitzgerald and Vijay Natarajan

Generally when people begin discussing improved contracts for players the talk immediately turns to rules that benefit the star players. That type of talk misses the bigger point. The majority of the NFL are not star players. At the end of last season, roughly 60% of the players under contract were playing on minimum salaries with minor bonuses. If the players ever want to potentially stage a strike or play hardball with the owners there has to be something for the small guy who constitutes the majority of the league and the biggest thing that can be given to them is a major pay raise with their base salaries.

Continue reading CBA Suggestion Number 10: Increase Minimum Salaries »

CBA Suggestion Number 9: Revamping the Franchise Tag System

Posted on by Jason Fitzgerald and Vijay Natarajan

The NFL is never going to eliminate the franchise (or transition) tag system but it is clear that it needs a major overhaul. The franchise tag is a provision of the CBA that allows a team to retain the rights to a pending free agent based on an average of the five largest salaries over the past five years as a percentage of the salary cap. The player is free to negotiate with another team when the “non-exclusive” tag is used but the cost of signing the player is two first round draft selections, which effectively blocks the player from free agency. Continue reading CBA Suggestion Number 9: Revamping the Franchise Tag System »