Every now and then around draft time I try to do some type of look at the NFL draft and value of the players selected through some financial means and I decided to go back and do that again this year. This time around I wanted to look back at the first five years of the current CBA, which introduced the rookie wage scale, and look at some summary data that may help us place a better value on a draft pick. Continue reading Using Salary Data to Better Value NFL Draft Picks »
For whatever reason there seems to be a ton of confusion about the amount of cap room actually required to sign rookies following the draft so I wanted to put something together pretty quickly to maybe help clear that confusion. Continue reading The Cap Space Required to Sign Draft Picks »
To lead off, who cares what the public thinks about Kyler Murray’s decision. I see a lot of people questioning the decision or saying this is the better decision for him, so I’ll cover the financial side of the decision, but I just hope that Murray chooses the sport that he is most passionate about because that will likely lead to the best path for him, one he will be less likely to second guess. The word is that he’s chosen football, so hopefully that aligns with what is most important to him.
I posted a few draft stats online the other day and based on response I decided to add some numbers into a post. I’m a little pressed for time today so I’ll simply do a quick overview of what I have done here using the Jets as an example and add some really brief thoughts. If you have any interest in more breakdowns please let me know and Ill see what I can do later this week. All the data that is presented is based on drafts from 2015 through 2018, so basically it identifies the young players on a team. Continue reading Looking at NFL Draft Success Since 2015 »
Panic has not yet set in for Bears fans over the team’s inability to wrap up contract negotiations with first-round pick Roquan Smith, but they are starting to lose their patience. With Chicago set to face off against the Ravens in this Thursday’s Hall of Fame game (August 2nd – 8pm ET), the Bears were one of the first teams to report to camp on July 19th. Almost immediately, a certain player’s absence became a bigger headline than the guys there.
Fast forward to July 31st, all 32 NFL teams have reported to camp, and Roquan Smith is now the only unsigned draft pick from the 2018 NFL Draft. Jets 3rd overall pick QB Sam Darnold inked his deal yesterday after holding out over similar concerns. Both Smith and Darnold are represented by mega-agency Creative Artists Agency; CAA also represented nine other first round draft picks (full agency breakdown here). Roquan Smith’s deal will be in the $18.5-$18.8 million range over four years, fully guaranteed, with a signing bonus around $11.5-$11.8 million.
Initial reports on the holdup with Darnold claimed that the issue was related to offset language. Newer reports indicated, much like the reports about Roquan Smith, that guaranteed money void/forfeiture language was causing the delay. With respect to an offset, if the Jets and Darnold part ways before this contract is up and Darnold signs with another team, the Jets would want his new contract to offset some of the money he is owed from them. Darnold and his agent, on the other hand, would like to be able to collect from the Jets in addition to this hypothetical new contract; this is often called “double dipping.” (More in-depth breakdown of offsets as well as Darnold and the Jets’ situation from Jason Fitzgerald here).
With Darnold officially signed, some details about the major contract sticking points were revealed by Pro Football Talk:
It appears Sam Darnold’s agent did a wonderful job securing guaranteed money ASAP, as well as eliminating void language. Darnold and his agent did however relent on the offset issue. Odds are that Baker Mayfield’s contract including offset language did not make for an easy negotiation there.
So… why is Roquan Smith, also represented by CAA, the last man standing? According to reports there are a few reasons, with one known factor being a disagreement over guaranteed money forfeiture following a potential fine or suspension under the NFL’s new helmet-to-helmet rule. In many NFL contracts there are clauses that allow the team to void part of the guaranteed money owed to the player if he were to be suspended or fined stemming from an incident either on or off the field. NFL players are paid on a bi-weekly basis like many standard salaried employees, with their base salary split into increments of 16 for each game in the regular season. Missing two games for a suspension could mean losing 1/8th of your yearly salary if there is forfeiture language to that effect in your contract. A common example would be if a player were to fail a drug test for PEDs. This helmet-to-helmet issue is unprecedented territory, however, as no one in the NFL truly knows what to expect from the rule.
The helmet-to-helmet rule is brand new for 2018 and it has already been very poorly received throughout the league. Members of the defending Super Bowl Champion Philadelphia Eagles were perplexed following a meeting with NFL referees. With the new rule already causing confusion, several players including Giants 2nd overall pick RB Saquon Barkley and recently extended Rams RB Todd Gurley made sure there were no clauses in their contracts allowing the team to void guaranteed money if they are fined/suspended for lowering their helmet under the new rule. On the other hand, Denver Broncos 5th overall pick DE Bradley Chubb and Indianapolis Colts 6th overall pick LG Quenton Nelson do not have the language excluded. NFL fans likely do not need reminding about the total mess that was the NFL’s “catch rule,” a very ambiguously worded and rarely consistent rule that thankfully was rewritten for 2018. Unfortunately, it appears the NFL may have replaced that mess with a new mess, the helmet-to-helmet rule. Only with this rule, the implications of a questionable call can go far beyond the playing field.
So, why aren’t there any other draft picks still fighting this fight? First and foremost, the issue affects certain positions more than others. Middle linebacker is arguably the position most affected by the new rule. However, the Bills #16 overall selection MLB Tremaine Edmunds, who has the same agent as Roquan Smith, signed on May 12th. The Bills reportedly had no issue excluding language that subjected their player to a loss of guaranteed money following punishment under the new rule. For the Bears to go to war over this issue with a physical middle linebacker like Roquan Smith, drafted to the self-proclaimed “Monsters of the Midway,” a franchise known for its ferocious defense delivering crushing blows to their opponents, seems like a crazy hill to die on. Chicago is essentially fighting to put Roquan in a situation that would lead to timid play and second-guessing himself as he also learns the nuances of the NFL game. Just last season, Bears MLB Danny Trevathan laid a big hit on Packers WR Davante Adams that was not deemed by the on-field referees to be deserving of an ejection. In fact, if you watch the video, the refs didn’t even think it was deserving of a flag until they saw the condition Davante Adams was in. Then, following review from the league office, Trevathan was given a two game suspension. Long story short, football produces some big hits. Aaron Rodgers spoke after the game about how he believed Trevathan had no intention of going for Davante’s head, it just happened to work out that way. So Roquan Smith and his camp cannot be blamed for wanting protection from a rule that no one has seen in action thus far.
Neither side appears eager to relent, and as a result Roquan Smith has missed almost two weeks of his first training camp. There is plenty of time before the season starts for Roquan to get fully immersed into the defense, but why start off the relationship with your alleged franchise cornerstone player on defense in this manner?
It appears the Bears just couldn’t have one off-season where positivity reigned supreme. After inking several high-priority free agents in Allen Robinson, Trey Burton and Taylor Gabriel; hiring an exciting new head coach in former Chiefs OC Matt Nagy; aggressively maneuvering in the draft to land their guys (like trading away next year’s second-round pick to move up for Memphis WR Anthony Miller); and bringing back important contributors from 2017 such as CBs Kyle Fuller and Prince Amukamara… they just had to get in a contract dispute with their first-round pick and have the last remaining unsigned draftee.
On Friday, February 23 the NFL released its annual list of compensatory picks for the draft on April 26th (see here). Thirty-two draft picks were awarded to fifteen teams, with the Bengals, Cowboys, Packers and Raiders leading the way with four each. In a nutshell, teams receive a compensatory draft pick for each of their unrestricted free agents signed away by another team in a given offseason, minus the amount of unrestricted free agents they sign from other teams, up to a maximum of four. The teams that are awarded the picks, as well as the round in which the picks fall, are determined by the NFL using a “secret formula.” (For a detailed overview see Over The Cap: Comp Picks Explained). Full 2018 list:
2018 NFL Compensatory Draft Picks
|New York Giants||1|
With the introduction of compensatory draft picks in the 1993 Collective Bargaining Agreement, the NFL sought to provide relief for teams that lost quality players in free agency. The picks serve as a consolation prize for a team potentially losing a key player within their organization. As with any new provision in a CBA, there are always loopholes to be exploited (and they’re usually first discovered by the Patriots). The advent of the compensatory pick was no different, and many tricks of the trade have since come to the surface.
One such example may have played a role in the Packers’ early dismissal of Martellus Bennett this past season. Putting his struggles on the field aside, Bennett was projected to count against the Packers’ compensatory pick considerations in this upcoming draft. However, one stipulation of the compensatory pick determination dictates that if a team cuts a player before Week 10 that player won’t count against their picks (it’s an added bonus when someone claims the player off waivers and bears the full burden of their contract, which is what the Patriots did with Bennett).
Beginning with the 2017 draft, the NFL owners voted to allow compensatory draft picks to be traded. This update provided further incentive for teams to stockpile comp picks, and it will likely lead to a strong uptick in another popular front office maneuver involving the comp pick formula. With 2018 free agency in full swing, prepare to see more contracts that include team options on the back end, and here’s why:
If a team decides they no longer want a player that has years remaining on his contract, they must cut him before the first day of the league year (March 14th for 2018). If a player is cut, thereby terminating his contract before its natural end, the player cannot count towards a team’s compensatory draft pick award when another team signs him. On the other hand, if a team no longer wants a player whose contract includes a club option for the upcoming season, declining to pick up the option is not considered terminating a contract before its natural end.
Although the result of a cut and declined option is the same; the team foregoes their exclusive right to retain a player, one may result in the team receiving a draft pick while the other cannot. This trick was already enticing to clubs prior to the rule change in 2017, and now that these picks may be traded we should expect to see it even more often. The traditional club option includes an option bonus; a lump sum of money treated as a signing bonus, if the team picks it up then the player has the option bonus amount prorated over the remaining years on the contract. These options were usually attached to the later years of a contract, four or five years after its execution. Recently, teams have begun including club options in contracts that are not tied to an option bonus, but are merely an agreement that the club has the right to terminate the players’ contract at the end of a season without it being considered a true cut. These “options” provide a lot of flexibility for the franchise at essentially no cost, and teams like the Ravens have begun including them after each season of a contract (more on this later).
A prime example of a club option where the team planned for a compensatory pick was Darrelle Revis’ contract with the Patriots. New England signed Revis in the 2014 offseason for 2 years, $32 million. However, here’s the contract breakdown:
($10 million total signing bonus)
Year 1 – 2014
2014 P5 Base Salary of $1.5 million fully guaranteed
2014 Per-game Roster Bonus of $500,000 (total of $500,000 over 16 games)
2014 Signing bonus of $5 million fully guaranteed
Year 2 – 2015 (Club Option)
2015 P5 Base Salary of $7.5 million
2015 Roster Bonus $12 million
2015 Per-game Roster Bonus of $500,000 (total of $500,000 over 16 games)
2015 Signing bonus of $5 million fully guaranteed
The Patriots effectively got Revis, considered by many to be the best cornerback in the NFL, for one-year, $12 million ($10 million signing bonus, $1.5 million 2014 P5 base salary, $500,000 per-game roster bonus for 2014), and won a Super Bowl in the process. The $20 million price tag for exercising the club option on Revis in 2015 ($7.5 million 2015 P5, $12 million offseason Roster Bonus, $500,000 per-game roster bonus for 2015) was presumably not going to be picked up, especially by the Patriots. Revis instead signed a monster deal with the New York Jets, and the Patriots received the second highest compensatory pick in the 2016 NFL draft, the 96th overall pick in the 3rd round.
Although perhaps not the primary reason for including the option, another example of this practice occurred in the 2017 offseason, and it certainly paid off in a big way. Prior to the start of the 2016 season the Denver Broncos signed Russell Okung (who was acting as his own agent which cannot be ignored) to a 5-year / $53 million-dollar contract. However, the contract included a club option after 2016, and the details left virtually zero incentive for the Broncos to retain Okung after one year. Take a look at the breakdown of Okung’s deal:
Year 1 – 2016
P5 Base Salary: $2 million non-guaranteed
Roster Bonus: $2 million non-guaranteed
Rehab Bonus: $1 million non-guaranteed (Okung had offseason shoulder surgery)
Okung performed adequately in 2016, but anything short of dropping back under center and slinging a few TD passes for the QB desperate Broncos pretty much assured that his club option would not be picked up. The team option ($1 million) going into Year 2, if exercised, provided Okung the following:
Year 2 – 2017
2017 P5 Base Salary of $2 million fully guaranteed
2017 Roster Bonus of $8 million fully guaranteed
2018 P5 Base Salary of $9.5 million fully guaranteed
Had the Broncos exercised Okung’s option they would have been on the hook for $19.5 million dollars fully guaranteed, after not guaranteeing him a penny in Year 1. This was never going to happen, but when Okung signed with the LA Chargers before the 2017 season (4 years / $53 million) his final contribution to Denver came in the form of the third highest compensatory pick in the entire 2018 draft. Denver selected Isaac Yiadom with the 99th overall selection in the 3rd round of 2018 thanks to Okung and a club option that all but ensured he was gone after a year. This scheme can yield tremendous returns for teams, and there is almost no downside. One can only imagine the impact on contract construction across the league now that these compensatory picks are eligible for trade, thus driving up their value.
Compensatory pick scheming can also backfire, such as a team insulting a player with a tender offer, where it is clear the only reason they extended the offer was in hopes of receiving a comp pick. This was the case with the Patriots’ handling of LeGarrette Blount. In the 2017 offseason, the Patriots extended a tender offer to Blount for one-year, $1.1 million dollars. The offer came on the last day that NFL teams would receive a comp pick if they lost a player to free agency. The Patriots had seven other running backs on their roster and had previously shown no interest in retaining Blount. New England was taking a gamble that someone else would top their offer, with the risk of just over one million dollars worth taking. Sure enough, the Eagles stepped in and beat New England’s offer, leaving the Patriots with the right to match it or potentially receive a comp pick. According to our comp pick expert, Nick Korte, Blount was just outside of the 32-compensatory pick limit, and will award the Patriots nothing. Blount certainly has the last laugh for now after steamrolling New England in the Super Bowl to the tune of 90 yards and a touchdown on just 14 carries.
Now, you may be thinking there is no way a late-round draft pick could possibly make up for the loss of a good player. Well, as previously mentioned, the Patriots are known for their excellence in exploiting all that the CBA has to offer. New England used a comp pick in 2000 when they drafted a QB prospect out of Michigan by the name of Tom Brady in the 6th Round with the 199th overall (compensatory) pick. The list of notable compensatory pick selections is a long one, with franchise cornerstone players including:
Mike Vrabel – Pittsburgh Steelers, Round 3, Pick No. 91 overall, 1997
Matt Hasselbeck – Green Bay Packers, Round 6, Pick No. 187 overall, 1998
Marques Colston – New Orleans Saints, Round 7, Pick No. 252 overall, 2006
La’Roi Glover – Oakland Raiders, Round 5, Pick No. 166 overall, 1996
Hines Ward – Pittsburgh Steelers, Round 3, Pick No. 92 overall, 1998
Josh Sitton – Green Bay Packers, Round 4, Pick No. 135 overall, 2008
Antoine Bethea – Indianapolis Colts, Round 6, Pick No. 207 overall, 2006
Pierre Garcon – Indianapolis Colts, Round 6, Pick No. 205 overall, 2008
Dak Prescott – Dallas Cowboys, Round 4, Pick No. 135 overall, 2016
David Tyree – New York Giants, Round 6, Pick No. 211 overall, 2003
Malcolm Smith – Seattle Seahawks, Round 7, Pick No. 242 overall, 2011
Ahmad Bradshaw – New York Giants, Round 7, Pick No. 250 overall, 2007
Super Bowl MVPs, perennial Pro-Bowlers, and the greatest Quarterback that ever lived are just some of the compensatory picks from years past. Certain NFL teams prioritize acquiring compensatory picks far more than others, with the Ravens topping the all-time list with 49 (roughly two per draft since 1994), and the Saints bringing up the rear with just 10. Here is the full list:
SUMMARY OF COMPENSATORY DRAFT PICKS, 1994-2018
|Los Angeles Rams||33|
|New York Giants||24|
|New York Jets||14|
Player agents would be wise to leverage the possibility of their client awarding the team a comp pick during contract negotiations, considering the team will likely be the one to introduce the idea of a club option. Draft picks have a ton of value, this was clearly evidenced by the Browns who last year paid $16 Million for a 2nd Round Pick. The Ravens, who love to stick as many club options into their contracts as possible, included a club option in every year of Brandon Carr’s contract. The ability to decide at the end of each season whether a player is worth retaining, or whether you would prefer to let him hit the open market and potentially receive a draft pick in the process, is a very nice position to be in.
Here is the list of players who had club options built into their contracts for the upcoming 2018 season:
Brandon Carr CB Baltimore Ravens – $7,000,000 (Exercised)
Adam “Pacman” Jones CB Cincinnati Bengals – $6,447,918 (Declined)
Austin Howard RT Baltimore Ravens – $5,000,000 (Declined)
Torrey Smith WR Philadelphia Eagles – $5,000,000 (Traded)
Alan Branch DT New England Patriots – $4,550,000 (Declined)
Elvis Dumervil OLB San Francisco 49ers – $4, 250,000 (Declined)
Cordarrelle Patterson WR Oakland Raiders – $3,250,000 (Traded)
Josh Robinson CB Tampa Bay Buccaneers – $1,875,000 (Exercised)
Here are some notable players who have a club option in their contract for the 2019 season (with 2019 Salary Cap Hit) :
Jason Peters LT Philadelphia Eagles $10,666,668
Pierre Garcon WR San Francisco 49ers $8,400,000
Menelik Watson RT Denver Broncos $7,458,334
Brandon Carr CB Baltimore Ravens $7,000,000
Jerick McKinnon RB San Francisco 49ers $6,000,000
Kyle Juszczyk FB San Francisco 49ers $5,950,000
It should be no surprise that some of the biggest contracts signed so far in free agency (excluding Quarterbacks), are full of club options:
Andrew Norwell G Jacksonville Jaguars 5 yrs/$66.5 million – Club Option 2020, 2021, 2022
Malcolm Butler CB Tennessee Titans 5 yrs/$61.25 million – Club Option 2020, 2021, 2022
Weston Richburg C San Francisco 49ers 5 yrs/$47.5 million – Club Option 2021, 2022
Anthony Hitchens LB Kansas City Chiefs 5 yrs/$45 million – Club Option 2020, 2021, 2022
Nigel Bradham LB Philadelphia Eagles 5 yrs/$40 million – Club Option 2020, 2021, 2022
Jerick McKinnon RB San Francisco 49ers 4yrs/$30 million – Club Option 2019, 2020, 2021
Most of these new club options do NOT include an option bonus, thereby giving all the benefit to the team while the player must enter each offseason with questions about their future. It is quite a luxury when managing a roster headed into the offseason. Additionally, having a stash of compensatory picks during the draft leads to plenty of maneuvering and creativity. Cincinnati, Green Bay, Oakland and Arizona – 4 of the top 5 teams in terms of 2018 compensatory pick allotment – all made trades in the first round of the NFL Draft (Green Bay and Oakland made multiple). With more ammunition in their arsenal, and with the new ability to use compensatory picks in draft day trades, these teams were very active throughout the draft. Whether or not the picks work out is a different story, but what is for certain is because of comp pick capital these teams were aggressive in landing their targeted guys in the draft at the moments they felt necessary.
With some teams carrying up to twelve total draft picks (Green Bay had eight standard picks and four compensatory picks), they can package these in trades to maneuver around the draft board, and ideally get the seven-to-eight guys they want most. In the case of the Packers, they traded back in the first round from 14 to 27 and secured a 2019 first-round pick from the Saints in the process. Green Bay then traded back down with the Seahawks to 18 to take Jaire Alexander from Louisville, sending Seattle their 3rd and 6th round picks and recouping a 7th rounder. They then traded a 4th and 5th round pick to move up to the 88th overall pick in the 3rd round and land Oren Burks from Vanderbilt. With all this maneuvering they still drafted eleven players. They traded away their 3rd, 4th, 5th and 6th round picks, but it hardly mattered considering they had two 4ths, a 5th and a 6th in compensatory picks. Whether or not the players pan out remains to be seen, but the Packers did not have to rely on taking the “Best Player Available,” they didn’t sit in their war room hoping a guy they liked would fall to them, they were able to go get the guys they wanted when they felt they needed to.
It is probably no coincidence that the top four teams on the all-time list of compensatory picks (Baltimore, Green Bay, Dallas, New England) happen to be four of the best teams in the NFL at producing home-grown talent. They simply have a higher likelihood of one or two of their draft picks working out when they bring eight-to-ten new draft picks into camp every year.
The draft is here so I thought it would be helpful to put together a spending chart for each team to help see areas where teams might overvalue a player based on need or bypass a player based on perceived roster strength. For each roster I looked at the top 53 contracts and using the annual contract value of the most recent contract for the player calculated the team’s investment per position. The position is what we have in our database and there could be some movement if there is a defensive shift or player changing position, but they should be pretty accurate. We do still have a few contracts outstanding that could move the numbers a little bit but nothing significant. Here is the breakdown for each team (clicking on the header should sort the tables).