A Close Look at the Tyron Smith Contract Extension

Posted on July 31, 2014 by Jason Fitzgerald

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Since we now have the basic details of the Cowboys extension with left tackle Tyron Smith, I thought it would be worth looking at why calling him the highest paid player at the position is not exactly accurate.

Though Smith carries the highest annual value of any tackle, $12.2 million versus $11.5 million for Joe Thomas, the cash flows will tell a slightly different story. Here are the running cash flows of the two contracts:

Season	Thomas	Smith
Year 1	$20,700,000	$20,000,000
Year 2	$30,900,000	$30,000,000
Year 3	$42,000,000	$40,000,000
Year 4	$51,000,000	$50,000,000
Year 5	$60,500,000	$60,000,000
Year 6	$70,500,000	$70,500,000
Year 7	$80,500,000	$84,000,000
Year 8	$97,600,000

For the first five years of the contract Smith will trail Thomas before pulling even in year 6 and then ahead in the seventh and final year of the contract. These numbers do not take into account the fact that Thomas has roster bonus escalators in his contract in year 6 and 7. If Thomas reaches both escalators, which are based on Pro Bowls, His six year payout will rise to $72 million and his 7^th year payout to $84 million.

Those escalators are more or less built in to the Smith contract, which is likely how the Cowboys arrived at the $84 million total. If both players continue to play at a high level this deep into their contracts the contracts are at best equivalent and realistically will always favor Thomas. The final year payout for Smith will ensure that he will always be the highest paid player among the current crop of players, pushing his annual value to $12.2 million, a number Thomas can not reach with this contract.

I read some complaints on Pro Football Talk about how the contract is crazy for Smith to sign due to the length of the contract. This now ties him to the Cowboys until he is 33 years old. But that opinion fails to realize that in order to achieve this type of contract it is a concession that you must make. Thomas did the same year ago when he signed his record setting deal and he will be 35 years old when he can next hit free agency, two years older than Smith. While it is true that Smith likely had more earning potential than Thomas, who was 23 when he entered the NFL and signed until he was 27, this is the path to the big contract.

Thomas is not the only individual who sacrificed years to gain big money. D’Brickashaw Fergsuon of the Jets signed a six year $10 million contract extension in 2010 that would tie him to the Jets until he was 34. Like Smith, Ferguson was under contract for two more years when he signed the deal. Ferguson was generally considered overpaid (though his annual value is inflated by around $750,000), but he clearly sacrificed to get that $10 million number. These are concessions that must be made especially since the limited injury risk is now being taken off the player and absorbed onto the team.

One player who took a different route was Ryan Clady of the Denver Broncos. Clady was a franchise player and considered the best tackle in the game outside of Joe Thomas. Clady opted for the traditional five year deal (though it’s doubtful the Broncos offered other options) which gets him to free agency at 32, a bit younger than the others on this list. When we look at the percentage of payout over the five year value we see the big difference. Smith will consistently get a larger percentage of his contract over the first few years of the deal, with it not really smoothing out until the fourth season of the contract.

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Season	Smith	Clady
Year 1	33.3%	28.6%
Year 2	50.0%	43.8%
Year 3	66.7%	62.9%
Year 4	83.3%	81.0%
Year 5	100.0%	100.0%

The other thing that we should do when looking at Smith’s extension is an alternative cash flow analysis. In this case we hold off on the extension because we are unhappy with the length of the contract being offered by the Cowboys. Here we play out the contract and will be subject to the franchise tag in 2016 and potentially 2017. For all the issues that may exist with the Dallas Cowboys salary cap they have already shown a willingness to use the tag multiple times on one player (Anthony Spencer) in years where the cap was difficult to navigate. If anything their cap will be better in the future.

Assuming the tag jumps by around $2.5 million in 2016 here will be the new money cash flows over the next four years:

Year	Current	Tag
2014	$9,000,000	$0
2015	$1,000,000	$0
2016	$10,000,000	$14,100,000
2017	$10,000,000	$16,920,000
Total	$30,000,000	$31,020,000

If we discount these at a 7% rate the earnings in the current contract are actually higher than in the second scenario by about $700,000. We have also eliminated our risks of injury or skill decline during that period. In the above analysis Smith would likely sign a contract in either 2017 or 2018. The terms would be 5 years at that point, which would bring him to either 2021 or 2022. Is that really a material difference than being under contract in 2023? Probably not.

Might he be trading off some money in this situation? Its possible. The 2018 through 2022 seasons would see him earn $54 million. Would the market jump higher than that in that time? Im not sure. Clady’s deal was worth $52.5 million over five years and would be used as the barometer, which would indicate $54 million is a fair number. The salary cap will be rising (by how much nobody knows), but we cant be sure if money will funnel to this position or simply go to higher quarterback wages.

All things considered this is a good contract for both sides. Dallas has a bit more control over his salary cap charges and will pay a bit more now to potentially lock up a player at what might be reasonable terms in the future. Smith has more or less reduced risk in the short term and not really sacrificed much in his overall earning potential to do it. While he may not really be the highest paid player, he can now claim he is based on that additional contract year. He’s not the first nor will he be the last player to do that.

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Looking at Jamaal Charles’ Contract and Chiefs Salary Cap

Posted on July 23, 2014 by Jason Fitzgerald

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According to KCTV5, Chiefs star running back Jamaal Charles is going to hold out of training camp in the hopes of earning a new contract with the Chiefs.

Charles’ situation is not all that different than the contract situation of Andre Johnson that I have alluded to in the past concerning the disgruntled wide receiver playing for years on an under market contract. Charles was one of the last signings under the old CBA, agreeing to a five year extension worth $27 million in December of 2010. Rather than fighting the uncertainty of the labor situation, Charles agreed to the deal in the midst of a 1,400 yard campaign in lieu of becoming a restricted free agent in 2011 in a very uncertain market.

Though Charles was injured in 2011, it became apparent that if he was healthy he was going to be grossly underpaid by the time 2012 rolled around. Following the mega contracts given to Adrian Peterson, Chris Johnson and, to a lesser extent, Deangelo Williams, a number of players earned massive contracts including Arian Foster, Ray Rice, LeSean McCoy, and Jonathan Stewart. Foster’s contract had to be a dagger into the back of Charles as Foster was also set to be a restricted free agent when he signed his contract.

The following table presents the financials of the various running backs in the market:

Player	APY	Guarantee	1 Year Cash	2 Year Cash	3 Year Cash
McCoy	$9,000,000	$20,765,000	$11,750,000	$19,750,000	$30,000,000
Foster	$8,700,000	$20,750,000	$18,000,000	$23,750,000	$30,000,000
Williams	$8,600,000	$21,000,000	$19,500,000	$25,000,000	$30,000,000
Forte	$7,600,000	$13,800,000	$9,800,000	$16,100,000	$22,600,000
Lynch	$7,500,000	$17,000,000	$10,000,000	$17,000,000	$22,500,000
Stewart	$7,300,000	$11,500,000	$9,500,000	$20,000,000	$24,500,000
Rice	$7,000,000	$15,000,000	$17,000,000	$25,000,000	$29,000,000
Charles	$5,400,000	$8,000,000	$11,600,000	$15,100,000	$18,100,000

The difference between Charles and everyone of his peers is startling. Four players earned $29 million or more in the first three years of their contract. All earned over $22 million. Charles earned $18.1 million.

From a performance standpoint its hard to make an argument that any has been better. When we break things down into dollars per annual contract value its clear who is one of the best bargains in the NFL.

Player	Rush Yds	Pass Yds	Total Yds	Tot Yds/APY
McCoy	2,447	912	3,359	$2,679
Foster	1,966	400	2,366	$3,677
Williams	1,580	520	2,100	$4,095
Forte	2,433	934	3,367	$2,257
Lynch	2,847	512	3,359	$2,233
Stewart	516	201	717	$10,181
Rice	1,803	799	2,602	$2,690
Charles	2,796	929	3,725	$1,450

It’s no contest as to who has the greatest team value, which usually means a poor contract for the player.

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Charles is only scheduled to earn $3.9 million this season, which will only further the split between he and the other players. That number ranks 14^th in the NFL and is $985,000 less than James Casey will earn as a fullback/tight end for the Eagles. Casey played about 14% of the offensive snaps for the Eagles last season. Other players earning more include a seemingly washed up Chris Johnson ($4M from the Jets in free agency), Toby Gerhart ($4.3M in free agency from the Jaguars), and Donald Brown ($4M in free agency from the Chargers). In 2015 Charles salary will jump to $6 million, none of which is guaranteed in the event of an injury.

Charles is hitting the age where the declines in production often come fast and so does the decline in salary, a topic we touched on with Marshawn Lynch a few weeks ago. That kind of makes this his last opportunity to likely gain some leverage since his performance has been so good and he is the best offensive player on the team. Charles is currently the 8^th highest paid player on the Chiefs.

Charles does not have as much to lose as some other player. While he does have a $1 million reporting bonus in his contract, he does not have any signing bonus money that can be forfeited. Charles had received a roster bonus in 2010 that is prorated like a signing bonus but does not count in the forfeiture equation. Players can also hold out for five days without real penalty. So this may turn out to be much ado about nothing.

For the Chiefs this is just another in a long line of players who are looking for new contracts from a team that really has very little cap room to be able to accommodate them all. Kansas City went on a spending spree of sorts in 2012 and Dwayne Bowe receiving a deal worth $11.2 million a season likely sets an expectation that the Chiefs should pay their perceived high end player, top end money.

In addition to Charles looking for a new contract, quarterback Alex Smith and pass rusher Justin Houston are both in the final year of their contracts and expecting new contracts. Kansas City has $10 million of cap room left for this season and already has $126 million committed to the 2015 salary cap. Smith is likely seeking around $18 million a season and Houston in the ballpark of $10 million. That makes for a very complex series of negotiations if the Chiefs want to keep this team together in hopes of making a long term contender rather than a one season surprise in the playoffs. It is one of the most delicate situations in the NFL and the news about Charles makes it that harder. Over the next few weeks we will see if the Chiefs are up to the task.

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Projecting a Contract for JJ Watt

Posted on July 18, 2014July 18, 2014 by Jason Fitzgerald

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The other day there was some discussion on Twitter about Texans’ Defensive End JJ Watt receiving a contract extension worth in the ballpark of $23 million a season. That number seems crazy, so I figured I may as well jump in and take a look at Watt and where he might stand in the market and the type of contract I think he could receive.

The Player

Watt is a unique talent in part because of the position he plays on the field. In general most defenses that employ a 34 front do not have defensive ends that generate a great deal of pressure on passing downs. For the most part the 34 DE is responsible for occupying blockers, eating up space and allowing the linebackers make plays on the football. Much like defensive tackles, the 34 defensive end is not a position that gets noticed that often as their contributions go well beyond the stat sheets.

But Watt is different. He has the prototypical size of the defensive end in the 34 front, but he gets to the QB, and he gets there often. He is very disruptive and makes plays in the running game behind the line of scrimmage. His ability to bat down passes is actually a topic of conversation among coaches and the media alike. He would seem to be a one of a kind defensive player.

The Stats

When we look at where Watt ranks I think there are a few categories we need to examine, because all are relevant to his eventual contract. The first thing I think that is worth looking at is his performance among 34 defensive ends.

Let use some of the numbers provided by Pro Football Focus for players with over 50% snaps. Over the last three seasons the average 34 DE converts 1.2% of his rush attempts to a sack and 8.2% to a pressure. Here are the top 10 seasons over that time frame in terms of pressure conversion.

Player	Year	Sacks/Rush	Press/Rush
J.J. Watt	2013	2.1%	16.4%
Cameron Jordan	2013	2.7%	14.5%
J.J. Watt	2012	3.7%	13.2%
Kyle Williams	2013	2.4%	12.9%
Justin Smith	2013	1.5%	12.1%
Mike Daniels	2013	2.1%	11.7%
Justin Smith	2011	1.2%	11.7%
Antonio Smith	2013	1.9%	11.2%
Calais Campbell	2013	1.8%	11.1%
Antonio Smith	2011	1.5%	10.9%

There are a few interesting takeaways from this. One is that Watt has been the most consistent player and is about two times as productive as the average player at the position. But as we look more at this list two things jump out at me. One is that his teammate, Antonio Smith, has two of the top seasons as well on this list. Smith is a very good player, but it may indicate that Watt is being given opportunities in the Texans defense to attack the passer that is not common to other teams. The other thing I notice is that out of these top 10 seasons, 7 came in 2013.

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In general we are now getting a greater number of players who are playing over 50% of the snaps and maybe more of these players are getting the green light to “go get the QB”. Maybe we should call this the “Watt effect” as the Texans defense has shown an ability to be more aggressive up front from the end position. Looking further at the group of data for the last three years, the position has grown from just 13 qualifiers in 2011 to 21 in 2013. 62% of the 2013 players produced a better than average season compared to 47% and 38% the year before. The position is getting more productive and efficient at rushing the passer. That is something that may make Watt less unique than he was in 2012.

If we expand our list to include all pass rushers from the outside (34 outside linebackers and 43 defensive ends), the numbers change. The average pressure now jumps to 10.6%. The average sack rate is 1.8%. What is our top 10 when we expand the field?

Player	Year	Sacks/Rush	Press/Rush
Jerry Hughes	2013	3.6%	19.3%
Elvis Dumervil	2013	3.1%	19.1%
Robert Quinn	2013	4.0%	19.1%
Aldon Smith	2011	4.5%	19.0%
Trent Cole	2011	3.1%	18.9%
Cameron Wake	2013	2.5%	17.9%
Justin Houston	2013	3.0%	17.8%
Chris Long	2011	2.7%	17.2%
Michael Bennett	2013	2.4%	17.2%
James Harrison	2011	3.4%	17.0%

There is no JJ Watt in this group. His best season ranks 13th. His second best season ranks 44th. That does not mean we can not use this positional group as comparison points, especially when we start looking at consistency, but it makes it more difficult to value Watt as a once in a generation player, which is something most seem to be doing.

Of course there is another aspect to the NFL and that is run defense. PFF tracks a stat called stops, in which they determine a tackle that constitutes a loss for the offense. Here are the top 10 seasons in that category since 2011.

Player	Year	Stops/Run
J.J. Watt	2012	17.1%
J.J. Watt	2013	13.7%
Cedric Thornton	2013	12.4%
Justin Smith	2012	11.8%
Akiem Hicks	2013	11.4%
Muhammad Wilkerson	2012	10.9%
Tyson Jackson	2011	10.6%
Calais Campbell	2012	10.4%
J.J. Watt	2011	10.2%
Kenyon Coleman	2011	10.1%

This is a dominant showing by Watt, holding not just the top two spots, but three of the top 10 seasons outright. The only other players to appear on both lists are Calais Campbell and Justin Smith, neither of whom did it when their pass rushing was also top 10 in the same year. The average 34DE generates a stop on 7.2% of his snaps, so again he is probably close to double the average. This is once in a generation type of performance.

If we expand this list to the overall rusher market, Watt is still going to rank on top. This is essentially a dominant category for 34DE’s. The only non 34 ends in that top 10 are Anthony Spencer in 2012 (11.7%), Frostee Rucker in 2011 (11.6%), and Terrell Suggs in 2013 (11.3%).

There are some other stats that people can point to, but in general I don’t believe they would drive the price that much. His batted passes was pretty crazy in 2012 (PFF credited him with 15), but he’s had 10 total in his other two seasons, so I wouldn’t put that much stock in it.

Setting the Market

The gold standard for defensive players is Mario Williams’ $16 million per year bloated contract with the Buffalo Bills. Williams is a player that most very good players can match up with statistically, but this is one of those contracts that most consider an outlier. The contract itself is a byproduct of the Bills lack of success, desperation to be relevant, and general unappealing location. Still that will be the high end mark of probably any contract.

Here are the list of the relevant multi year contracts to the discussion on Watts as well as the two year average performance leading up to the new contract.

Player	Year Signed	APY	Full Guarantee	Sack %	Pressure %	Stop %
Mario Williams	2012	$16,000,000	$24,900,000	3.3%	16.1%	2.6%
Clay Matthews	2013	$13,200,000	$13,200,000	2.6%	14.2%	6.7%
Charles Johnson	2011	$12,666,667	$32,000,000	2.3%	14.8%	7.0%
Trent Cole	2012	$12,131,250	$14,500,000	2.6%	14.5%	8.8%
Chris Long	2012	$12,050,000	$23,550,000	2.1%	15.6%	3.5%
Tamba Hali	2011	$11,500,000	$11,500,000	2.7%	12.9%	3.9%
Calais Campbell	2012	$11,000,000	$17,000,000	1.6%	8.4%	8.7%
Michael Johnson	2014	$8,750,000	$16,000,000	1.8%	11.0%	7.0%
Everson Griffen	2014	$8,500,000	$19,800,000	1.7%	11.6%	6.8%
Cameron Wake	2012	$8,300,000	$17,000,000	2.7%	15.6%	6.7%
Paul Kruger	2013	$8,100,000	$13,000,000	2.7%	13.1%	5.7%
JJ Watt	?	?	?	2.9%	14.8%	15.4%

Setting the Price

There are a few reasonable comparisons here. In terms of pass rush productivity, Watt ranks similar to Charles Johnson and Trent Cole, while being slightly less productive than Cameron Wake and Chris Long. Those names should immediately give us our minimum values for Watt. Wake, who was a bit older than some of the others, signed a lower contract in Miami and is the only player with high level production who failed to break the $12 million mark, which is clearly our low end of the marketplace for Watt.

From there Watt is going to have to point to a few factors to try to drive the price up. One is that his sack conversion rate is very high. A sack is always going to be more valuable than a pressure and teams put a premium on that. That said his 2012 season is the major factor in his ranking and each year that he produces in the 10-12 sack category will makes teams less likely to put the premium on the sack. In that respect he needs a strong sack year in 2014 if he can not reach an extension now.

Secondly it is clear how important he is to the run game. The 15.4% really stands out among this group, but again 34DE’s are expected to do well in this regard (he’s still a phenom) and run defense is not really a big barometer of salary. You can find a number of very good run defenders who were basically brought in to play on the veteran’s minimum. Others known more for run than pass play are pretty much earning in the ballpark of $5 million a season.

Another factor is that Watt is a proven full game player. Some of these other players were not. Watt more or less plays every snap of the game such that no salary is needed for a backup. He’s like Jared Allen in that regard in that he never takes a play off. Players who, when healthy, were top snap guys that are on the above list were Williams, Hali, Campbell, and M. Johnson. Most of the others played often but more along the lines of 80-85% rather than in the 90’s.

The most recent relevant example that Watt should point to is Matthews. Matthews’ contract is very recent to the market and represents the worth of a cornerstone defender to his franchise. Matthews was also under contract at the time of signing and the Packers had similar leverage with the franchise tag that the Texans will have with Watt. Watt compares favorably to Matthews as a pass rusher, and using these numbers, in the realm of 4-11% better. If we split the range it brings us to around $14.2 million a season. That’s probably a fair number to work from.

Going from there it’s really justifying additional money for being a pure full time player and an exceptional run defender. It might be realistic to get a team to throw you an additional $1-2 million for that aspect of the game, though many teams may just consider it a waste of resources since the NFL is a passing league. My feeling is a team would max out around $15.5 million unless they threw some backend money on the contract to equal the Williams annual value.

Negotiating with the Texans

Watt will likely have to take a discount if he signs an extension this season. Right now the Texans essentially control Watt’s rights for the next three seasons at a price tag somewhere around $23 million, depending on the cost of the franchise tag in 2016. The 2016 figure is not protected for injury, so at this point the guarantee is just $8.87 million.

If we value Watt’s extension at $15 million a year and assume a virtually guaranteed total of $40 million, that means he is essentially absorbing a minimum of a $54 million injury risk(the cost of the 16 franchise tag plus $40 million protected in the extension) by playing the next two seasons. If he has to play year 3 on the tag then it’s a $40 million risk. For Houston to absorb the risk they need to receive something in return.

Besides the injury risk, Watt also takes on a skill risk. As we discussed earlier the team was proving to be a good pass rushing team from non-traditional spots under their old coaching staff. Does that continue with the new staff? How well does Jadeveon Clowney play in the defense? His emergence could make Watt expendable if the cost gets too high, the way others made Williams expendable in Houston.

Another important aspect to signing now is opening up the path to future earnings. If Watt were to sign an extension this year it would likely be a 4 year deal, running through 2019. That would leave him open to a new contract at 30/31, an age where he could still be very productive. If he is forced to play out the next three seasons he would probably have to sign a pure five year deal, leaving him 33 years old when he hits free agency again. He won’t get much at that age.

What I would do to come up with a fair price for the Texans is to estimate the likelihood of serious injury or skill declines to discount the amount that the team is guaranteeing Watt by extending him now. A study last season by Jenny Vrentas of MMQB indicated that there is around a 3% ACL tear rate in the NFL, which is usually regarded as the worst possible injury. Beyond that we could probably assume a 1%-2% probability that he suffers a different type of serious injury or would see his skills materially decline at the age of 25/26 as he completes his contract.

If we discount that $40 million guarantee at a 4% rate back from the 2016 season into the 2014 season, we would reduce his salary by about $3 million. This type of guarantee is usually equal to the new money in the first two years of the contract. The remaining seasons would not be changed due to signing early as there was never any protection in those years to begin with. That would bring the fair contract value, in 2014, down to about $14.4 million a season. Each year that Watt survives the season without injury and performs well will increase the cost of his contract since he has less to gain by signing early. There are a few ways to play with the numbers based on franchise tags, cap inflation, positional value inflation, etc…, but $14.4 million seems like a pretty reasonable baseline number.

In terms of cash flows I would look at the structure of the Matthews and Williams contract as a guideline. Both are reasonable expectations unlike Johnsons which is very top heavy and Long’s which is an even spread. I’d try to push for the four year extension rather than a five year extension. If the Texans insisted on five years then I think the final season should be tied to the franchise tag that year. There is so much uncertainty in the NFL that you would not want to commit to 2020 without seeing what the 2015 salary cap is. It would give the team a benefit they should not receive. That being said, the four year contract is one most likely only available in the 2014 season and that in 2015 the length will be five years.

Here is what I would think is a reasonable set up for the contract:

	Bonus	P5	PG Roster	Cash	Cap	Dead
2014	$15,000,000	$1,907,385	$0	$16,907,385	$6,576,197	$27,795,197
2015	$0	$9,219,000	$0	$9,219,000	$12,219,000	$21,219,000
2016	$0	$6,400,000	$500,000	$6,900,000	$9,900,000	$9,000,000
2017	$0	$10,500,000	$500,000	$11,000,000	$14,000,000	$6,000,000
2018	$0	$10,200,000	$500,000	$10,700,000	$13,700,000	$3,000,000
2019	$0	$11,250,000	$500,000	$11,750,000	$11,750,000	$0

This works out to a four year contract worth $57.6 million. The first year new money take is $24,150,000 and the full guarantee about $26.12 million with another $6.4 million protected for injury. He’ll receive a $15 million signing bonus, which is pretty much the maximum that the team can add to the salary cap without removing Andre Johnson from the roster. While his cap charge is high in 2015, the Texans salary cap is in much better health. If you went to a five year contract I’d expect the guarantee to be higher (around the $40 million discussed above) and cash numbers slightly higher on the front end as well.

Of course it will be interesting to see what happens in reality with Watt, but this is the ballpark I would think we would be looking at right now. I think his value could both rise or fall depending on how the year plays out. The closer he gets to free agency the closer he can get to the $16 million Williams number, especially if the salary cap keeps increasing at a rapid pace.

I would think both sides should consider a deal this season. Houston is going through a remake of the roster and I think this move would ensure Watt is the face of the franchise and be good for PR in the event things with Johnson continue to get ugly. The cost itself is relatively reasonable and the team will have the ability to walk away via trade or release if they want to move on as early as 2017.

Watt will earn around $10 million more than if he was forced to play the franchise tag game and at least have some added security. Houston has been known to restructure contracts for cap relief and all he needs is a restructure in 2017, which we have kind of made a decision year based on his cap charge, to more or less lock in his cash for 2018. Plus he gets free agency in 2020 with this deal rather than 2021. So I think its relatively fair for both sides and within the market as constructed and Watt’s contributions and performance thus far in his career.

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Looking at the Sando/ESPN QB Rankings from a Salary Perspective

Posted on July 2, 2014July 6, 2014 by Jason Fitzgerald

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Mike Sando did a terrific piece on ESPN Insider (subscription required) in which he polled a number of people in football to rank the starting Quarterbacks in the NFL. Sando grouped the quarterbacks into tiers based on the rankings and also provided their overall ranking in his article. I wanted to examine that list from a salary standpoint and see if the consensus opinions match the price tags associated with each player.

Because rookie contracts are pre-determined I only wanted to look at veteran players (that means no Luck, Bradford, Newton, etc…) who I felt would start (that also eliminates Hoyer for me). That left us with 20 QBs. Just looking at annual contract values and equally dividing the tiers our “salary tiers” are

Tier 1: Aaron Rodgers, Matt Ryan, Joe Flacco, Drew Brees, Peyton Manning

Tier 2: Colin Kaepernick, Jay Cutler, Tony Romo, Matt Stafford, Eli Manning

Tier 3: Phillip Rivers, Ben Roethlisberger, Tom Brady, Alex Smith, Carson Palmer

Tier 4: Matt Schaub, Matt Cassel, Josh McCown, Chad Henne, Ryan Fitzpatrick

Based on Sando’s article the players who would be situated in the proper tier are Rodgers, Brees, P. Manning, Kaepernick, Romo, Stafford, E. Manning, Smith, Palmer, Schaub, Cassel, Henne, and Fitzpatrick. That’s a pretty good list with 13/20 being properly slotted by tier. Here are the tier average salaries:

	APY	ESPN Tier APY
T1	$20,410,000	$18,150,000
T2	$17,803,333	$17,716,386
T3	$11,724,550	$10,089,583
T4	$4,925,000	$4,906,250

ESPN’s tier two was a bit larger than the one I’m using and their tier 1 average is pulled down by Brady’s contract which in many ways is an outlier, but for the most part the average salaries are slotting pretty close to where they should be.

If we examine the list by overal rankings and compare the salary rank to the ESPN rank we can pick out the best and worst salary slotting based on the consensus scoring.

Brady of course is the biggest gainer. He ranks tied for number 1 overall in the Sando article but just 13^th in salary, a 12 slot differential. Brady has always been a unique case, really only receiving one contract in his entire career that would be considered a market setter despite being universally accepted as one of the top two quarterbacks of the last 10 years.

Rivers and Roethlisberger both provide six benefit points. This is not surprising as both signed contracts prior to 2011 when the salary escalation at the position really began to occur. The two of them, Roethlisberger in particular, have provided great value for many years for their teams. Both kind of get lost in the shuffle because one never won a Super Bowl and the other does not put up the huge statistical output some of the other great QB’s put up.

Of the lower tier QB’s the biggest positive would be McCown who ranks 18^th in salary but 16^th in the survey. Other players that would be considered some type of salary bargain include P. Manning, Brees, E. Manning, Tony Romo, and Chad Henne.

Not surprising to me is that the biggest drop would be Joe Flacco. Flacco ranks 3^rd in compensation but just 10^th among Qb’s, a drop of 7 slots. Flacco’s salary was largely driven by his team winning a Super Bowl and the Ravens cap situation at the time. Cutler and Kaepernick both see differences of 6 slots, which is actually a bigger move from a salary perspective than Flacco due to the lack of a middle class in the NFL QB salary scale. Ryan was the other big drop, with 5 slots between his salary and ranking.

If we re-distribute the salaries on a 1-20 basis, using averages for each slot in which there is a tie score, we can look at the players in terms of best and worst bargains in the NFL.

Brady would deserve a raise of a whopping 81.7%, which equates to $9.3 million a season. Again it just illustrates how Brady’s willingness all these years to work with the Patriots has given them more ammo to take risks on players that many others can not. Rivers and Roethlisberger would each deserve in the ballpark of $4 million more a season, which may give some guidelines as to what they will be asking for when their extensions come up for discussion in the near future. Another interesting name is Eli who the consensus indicates should get around a 10% raise and that is coming off an abysmal season. A bounce back season should really increase his stock when an extension comes up as many of the personnel people who ranked Manning seemed to put a great deal of weight in his 2013 season.

From a percentage standpoint both McCown and Henne are big bargains within those lower tiers. Hennehas the chance to earn more based on performance that could bring him to that higher level.

Cutler is the most overvalued in the NFL. He should earn $6.7 million less a season, a decrease of 37% over his current rate. Cutler’s contract was one I did not understand much when signed and he will need to improve greatly as he moves forward to justify it. Kaepernick and Flacco would be the other two that see big decreases in annual value. On a percentage basis Cassel is highly overpaid as is Schaub.

The following chart breaks down each players ranking, their salary, adjusted salaries and anything else discussed. Right now they are sorted by the percentage change in salary that would occur if their salary was based on the consensus ranking. Clicking on a column header should allow you to sort the data in any manner you would like.

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Player	Team	Salary Tier	ESPN Tier	Salary Rank	ESPN Rank	Rank Diff	APY	Adjusted APY	APY Difference	% Change
Tom Brady	Patriots	3	1	13	1	12	$11,400,000	$20,712,500	$9,312,500	81.7%
Josh McCown	Buccaneers	4	3	18	16	2	$5,000,000	$6,750,000	$1,750,000	35.0%
Ben Roethlisberger	Steelers	3	2	12	6	6	$14,664,417	$19,000,000	$4,335,583	29.6%
Philip Rivers	Chargers	3	2	11	5	6	$15,300,000	$19,200,000	$3,900,000	25.5%
Chad Henne	Jaguars	4	4	19	18	1	$4,000,000	$5,000,000	$1,000,000	25.0%
Eli Manning	Giants	2	2	10	7	3	$16,250,000	$17,922,222	$1,672,222	10.3%
Peyton Manning	Broncos	1	1	5	1	4	$19,200,000	$20,712,500	$1,512,500	7.9%
Drew Brees	Saints	1	1	4	1	3	$20,000,000	$20,712,500	$712,500	3.6%
Alex Smith	Chiefs	3	3	14	14	0	$9,258,333	$9,258,333	$0	0.0%
Carson Palmer	Cardinals	3	3	15	15	0	$8,000,000	$8,000,000	$0	0.0%
Ryan Fitzpatrick	Texans	4	4	20	20	0	$3,625,000	$3,625,000	$0	0.0%
Tony Romo	Cowboys	2	2	8	7	1	$18,000,000	$17,922,222	-$77,778	-0.4%
Aaron Rodgers	Packers	1	1	1	1	0	$22,000,000	$20,712,500	-$1,287,500	-5.9%
Matt Stafford	Lions	2	2	9	11	-2	$17,666,667	$15,300,000	-$2,366,667	-13.4%
Matt Ryan	Falcons	1	2	2	7	-5	$20,750,000	$17,922,222	-$2,827,778	-13.6%
Joe Flacco	Ravens	1	2	3	10	-7	$20,100,000	$16,250,000	-$3,850,000	-19.2%
Matt Schaub	Raiders	4	4	16	17	-1	$6,750,000	$5,250,000	-$1,500,000	-22.2%
Colin Kaepernick	49ers	2	2	6	12	-6	$19,000,000	$14,664,417	-$4,335,583	-22.8%
Matt Cassel	Vikings	4	4	17	19	-2	$5,250,000	$4,000,000	-$1,250,000	-23.8%
Jay Cutler	Bears	2	3	7	13	-6	$18,100,000	$11,400,000	-$6,700,000	-37.0%

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Everything You Need To Know Regarding The Potential Effects Of The Jimmy Graham Decision

Posted on July 1, 2014July 2, 2014 by Andrew Cohen

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Any minute now, arbitrator Stephen Burbank will hand down his decision re: Graham v. New Orleans–the highly publicized franchise tag grievance filed by Jimmy Graham and his agents. Burbank’s ruling will have a vast impact on a variety of parties, so here’s an in-depth look at the entire situation and the carryover effect that the decision could create.

The Facts:

The Saints placed the $7.053 million non-exclusive tight end franchise tag on Graham back on February 28^th.
On May 8^th, Graham, who lined up out wide or in the slot for 67% of his 2013 snaps, filed a grievance to be compensated $12.312 million—the non-exclusive franchise tag for wide receivers.
The grievance hearing took place on June 17-18, and a decision is expected later this week.

Scenario 1: Graham is ruled a tight end

Salary cap implications:

If Burbank determines that Graham is a tight end, nothing changes. His 2014 cap hit will remain at its current $7.053 million, and New Orleans will remain under the 2014 salary cap.

Long-term implications:

Franchise tagging a player two years in a row results in a 120% increase in salary from Year 1 to Year 2. If New Orleans wins the grievance, they could essentially lock in Graham for a combined $15.5 million over the next two seasons—an absolute bargain for one of the games best weapons. The Saints would gain a tremendous amount of leverage in long-term contract negotiations if Burbank rules in their favor.

Most likely outcome under this scenario:

Graham, who turns 28 in November, is surely aware of the above. As a late third rounder who’s made just over $3 million during his four NFL seasons, he’s greatly incentivized to sign a set-for-life type of contract as soon as possible. While this outcome will leave the Saints with no reason to pay Graham the type of money he wants (reportedly over $10 million annually), there’s no questioning both sides mutual desire to come to terms on a long-term deal. Graham will be disappointed, but these circumstances favor a long-term deal being reached before the July 15 deadline.

Scenario 2: Graham is ruled a wide receiver

Salary cap implications:

If Graham is rewarded the $12.132 million non-exclusive receiver franchise tag, the Saints will have to act quickly. Currently just $1,588,821 under the salary cap, this ruling will force New Orleans to make cuts or restructure current contracts in order to get back under the cap. Otherwise, they could choose to remove the tag.

Long-term implications:

120% of $12.312 million is $14.774 million, and the Saints currently have one of footballs most unfortunate cap situations. All negotiating leverage would shift to Graham if he were deemed a receiver.

Most likely outcome under this scenario:

An aging Brees and a host of offseason moves that scream “win-now” point towards the Saints making the necessary corresponding moves to keep Graham and get under the cap. However, my money is on this outcome leading to the Graham camp tabling negotiations, agreeing to play the 2014 season under the $12.312 million tag, and taking their chances as a free agent again in 2015.

Scenario 3: A hybrid ruling

Salary cap implications:

It’s possible that Burbank decides to rule in the middle—designating Graham a hybrid WR/TE. The halfway point between $7,035,000 and $12,312,000 is $9,673,500. As in scenario 2, this ruling would still push New Orleans over the cap, though not by much.

Long-term implications:

120% of $9,673,500 is $11.6 million—a substantial difference from the $14.774 million number in scenario 2. With the Saints’ poor cap situation, the $3.1 million difference (when compared with Graham winning the grievance) of placing a second franchise tag on Graham will certainly impact make New Orleans’ willingness to negotiate.

Most likely outcome under this scenario:

Drew Brees recently commented that Burbank told him what his ruling would be. Brees also said “there’s a fair way to do this”. Was he insinuating that a middle ground would be fair? It’s certainly possible. Brees badly needs his most dangerous weapon, and could already be talking to management about pushing some of his own salary forward to not only create the necessary cap room in the present, but also propel a long-term deal. However…

Appeal Process :

A wildcard in all of this is that the losing party will inevitably appeal Burbank’s ruling. As noted by ProFootballTalk’s Mike Florio, a decision on the appeal may or may not be made before July 15—the deadline for player and team to strike a long-term deal.

Graham’s True Worth & The Future of the TE position

Tight ends salaries have grown at a tremendous rate over the past several years.

	Avg. Top 5 Cap Figures of NFL TEs	NFL Salary Cap	% of Cap Comprised By Top 5 TEs
2005	$2.3 mil	$85.5 mil	2.70%
2006	$3 mil	$102 mil	2.90%
2007	$3.4 mil	$109 mil	3.10%
2008	$3.3 mil	$116 mil	2.90%
2009	$4.7 mil	$123 mil	3.80%
2013	$8.3mil	$123 mil	6.80%
2014 (Graham TE)	$7.8mil	$133 mil	5.90%
2004 (Graham WR)	$8.8 mil	$133 mil	6.60%

In 2005 & 2006, the average cap hit of the leagues top five tight ends accounted for less than 3% of the NFLs salary cap. By 2009, with a $123 million salary cap, that figure had increased to 3.8%. Last season, with the salary cap still at $123 million, it was up to 6.8%.

On the surface, this makes sense. The NFLs shift towards a pass-first league theoretically increases the value of skill-players who can catch the ball. However, production from the top of the tight end position has not grown along with this salary increase.

TE1

Shown above is the average production of the top-5 tight ends since 2005, in terms of Yards,TDs and AV (Approximate Value, a ProFootballReference created statistic that attaches a single number to every player season). While touchdown production from the tight end position has increased over this period, yards and AV have remained constant.

Tight end salaries (as a percentage of the salary cap) have likely hit their ceiling, meaning they’re due to plateau in the near future. If Graham loses the grievance and signs an extension before the July 15 deadline, the beginning of a period where tight end salaries decline may begin.

But Graham—a once-in-a-lifetime type talent— is not just any tight end, which is why this ruling holds so much importance. If Graham wins the grievance and hits the open market in 2015—a year where the salary cap is projected to increase—there’s no telling how much money he might get.

And it’s that hypothetical—the prospect of a still-in-his prime Graham hitting the open market in 2015, that ultimately has agents drooling. Not just Graham’s agent, Jimmy Sexton–one of the games most powerful negotiators. But the agents of all tight ends, as the deal Graham signs will be used as a benchmark for tight end deals of the future.

A situation that has been in-flux for months will begin to take shape in the coming days. And it all resides in the palms of one man: arbitrator Stephen Burbank.

Andrew Cohen

@ajcohen03

ajcohen3@gmail.com

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Looking At a Possible Contract for Cowboys WR Dez Bryant

Posted on June 4, 2014August 28, 2014 by Jason Fitzgerald

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I wanted to take a look today at Dez Bryant of the Dallas Cowboys, who is entering the final year of his contract and more or less proclaimed that he is a top five receiver in the NFL. I find Bryant a pretty intriguing contract negotiation since there are arguments that could be made on both sides for his salary and there are many potential risks and rewards associated with an early extension for Bryant.

The Salary Landscape

Here is the list of current top of the market players whose contracts were signed under the age of 30 (Bryant is 26 this season)

Bryant should have two goals in this negotiation. The first is to establish that he is far superior to the bottom four names on this list such that he, at the very least, begins a new salary tier for the position. The second is to argue that he should be paid alongside Johnson and Fitzgerald.

The Second Pay Tier

First I just want to look at base stats to quickly establish Bryant’s position among this group. Here is how Bryant’s three year performance stacks up against the average performance of the four players who make under $13 million a season.

n terms of total usage, Bryant laps the field. He ranks first in games, receptions, yards, and touchdowns. However he ranks below average when we start looking at his performance per play where his yards per reception and yards per target both lag the field. Does that really matter though when working on a contract for a player with the physical abilities as Bryant? Probably not.

The Top Tier

The reason I stated above that the per play type data likely has limited effect on a contract is when you look at the three year numbers of Johnson and Fitzgerald, at the times they signed their contracts, to the average of the four second tier players and add them to the chart you get the following:

Those other players were unable to attain the salary levels of the big two despite the barely average or below average performances in those yards per reception and per target type categories. But Johnson and Fitzgerald were, much like Bryant, considered physical marvels at the position and not interchangeable pieces. The overall usage numbers indicate dominant and durable players at the position and they were thus paid accordingly.

Looking at it this way I think we can definitely make the argument that Bryant, among the group of current veteran contracts, is worthy of being no worse than the third paid player at the position. Getting him above $16 million a season, however, may not be easy.

His greatest asset is the ability to find the end zone. He has more touchdowns over this three year period than the other two did. He also is catching more passes that come his way, though he has played with the better QB over a three year stretch as well. On a per game basis he only slightly trails Johnson at 0.733 to 0.723 touchdowns per game. He is neck and neck with Johnson in receptions as well. His receptions are well behind Fitzgerald’s.

The major negative on Bryant being considered on par with these two players is his usage stats. The next time you see a Bryant outburst on the sideline about getting him the ball (however one wants to spin it) think about the fact that he gets one less target a game than Johnson and 1.5 less than Fitzgerald. That one added target would basically have put him on par with Johnson for yards and Fitzgerald for receptions. At that point you can make the case that he could warrant the largest contract at the position.

The fact that Dallas’ offense has so many passing options through the years has hurt Bryant. Loosely adjusted for games played, Bryant is responsible for about 22.5% of his teams’ targets. Johnson was at 24.4% and Fitzgerald 26.9%. Among the first and second tier, his team usage ranks just 5^th, just ahead of Wallace and Jackson (Harvin and Bowe both benefitted from being on poor teams with limited alternatives).

It’s the one area of statistical dominance that he can not claim right now and it is doubtful that will change. There are a few arguments that he can bring to the discussion regarding that. One is that he is the only one of the two players to play with a dominant tight end in Jason Witten. Jackson had a similar situation with Antonio Gates in San Diego. When it comes to actual attention among wide receivers on the Cowboys, Bryant’s numbers are more impressive.

Secondly I think it would be worth bringing up the fact that Witten is 32 years old and may not have as many seasons left as a dominant player. Once that happens the fact is Bryant can pick up the slack and get those dominant numbers that compare with Johnson and Fitzgerald.

Finally, Bryant is just 26 years old and has years of exceptional football ahead of him. Unlike many other players you are not going to pay for non-results on the backend of a contract, but will get a dominant player for at least four years if not more.

Where Should His Salary Fit

Based on the fact that this is the Dallas Cowboys, who have gone above and beyond for certain players, I think Bryant should have a compelling case to come in very close to those top two players. Can he reach $16 million? I don’t think that is a possibility. Both Johnson and Fitzgerald had their teams over a barrel in regards to salary cap charges and contract structures which helped get them the deals they received. Bryant is by no means an albatross on the Cowboys salary cap right now and Dallas is probably fluid enough with the cap to be able to threaten back to back franchise tags, which would leave him somewhere between $28 and $29 million in earnings over a two year period..

I think the challenge here should come with designing the 1A tier that is lacking. How much above the second tier average of $11.79 million makes Bryant happy while also being acceptable to the Cowboys? I would think the range here would be $14.7 to $15.3 million a season. I think there is also a point to be made here that Johnson’ five year contract value works out to $15.6 million a season, so coming in close to $15 million is really not that far off from true top of the market pricing.

In terms of years I think the deal has to be similar to the big two at 7 years. That is necessary for salary cap flexibility and can also give Bryant the important distinction of having a $100 million contract. If the $100 million number is a big deal they may be able to push the annual value down to the $14.3 million level, but I’m just guessing as to that being a big benchmark for Bryant. It might not be and they may be more interested in hitting $15 million a year as a benchmark.

Cash flows of the contract will be an important issue. Johnson received $45.75 million over the first three years of his contract. Harvin will receive $43.145 million. Harvin also could have been threatened with multiple franchise tags and that had no bearing on his extension numbers. I think Bryant needs to come in between both players and I don’t feel that it would be acceptable to him to receive the $37 million total that went Wallace unless that number was fully guaranteed from day one. Both Harvin and Johnson present better comparisons as well because they both had one year remaining under contract when extensions were signed.

Here is the breakdown of how the Harvin and Johnson yearly annual values work out over the first five years of their contract:

There are a couple of interesting things to note here. One is the structure of the deals. Harvin’s is a pure waterfall style contract that starts high and continues to come down. Johnsons follows a unique pattern in that the APY falls and then rises again in a u-shape. That is very uncommon, but marked the importance for Johnson to eventually get to a final annual value of over $16 million while the Lions were likely stuck working in the $15.5 million range. This is the compromise and the type of structure I would suggest for Bryant as well, except $15 million being his maximum value. The other interesting point is how close the two year values on the contract are. Basically Harvin and Johnson should set the parameters for the first three years of payments pretty easily.

The other thing that stands out is just how strong the Harvin contract was in terms of cash flows. Harvin’s three year annual value was nearly a 1.12 multiple of the five year value. Most other players are in the ballpark of 1. The tradeoff for Harvin was the low guarantee compared to the others at the position. Harvin received just $14.5 million in full guarantees with a maximum guarantee of $25.5 million. Wallace received $27 million fully guaranteed upon signing and $30 million in total guarantees. Johnson received nearly $49 million in fully guaranteed salary. Each of these numbers is important, but the Harvin model should be paid attention to if Bryant’s camp would not agree to a “reasonable” contract and Dallas felt compelled to keep him at a higher number.

Based on the structures of the contracts I would suggest a cash flow to be somewhat along these lines for Bryant, assuming our seven year value ends up around $15 million, which again I think is the maximum he will get.

How might we structure such a deal? Right now Dallas has around $10 million in cap space in 2014 following the $5.5 million in cap savings that they earned from Miles Austin coming off the books. They still have to sign their first two draft picks which will result in a net loss of cap room of about $1.6 million. Assuming that they have no other major signings to make this year they should be able to afford to increase Bryant’s cap charge by $4 million and still get by for the season.

In 2015 Dallas has $138 million currently on the cap, but that includes charges for Doug Free and Kyle Orton, both of whom will have their contracts void, creating another $9 million in cap space. Henry Melton has a $9.25 million cap charge which would never occur. He would either be released or restructured for added cap space. In 2016 the team can begin to turn over the roster without devastating salary cap issues. My goal is to keep the cap charges moderate enough to where I don’t feel forced to restructure the contract in 2015 or 2016.

I think a very fair offer is a $20 million signing bonus with no other change to Bryant’s 2014 salary. That would bump his compensation this year to $22.03 million which actually exceeds Johnson’s salary in his extension year. Dallas can go lower than that and have it still be acceptable but for salary cap purposes I’d rather give the big bonus and work on a payment schedule that the team will find adequate for cash purposes. The initial guarantee would consist of the signing bonus, 2014 and 2015 base salaries and half of the 2016 salary. I’d give an injury guarantee on the other half of the 2016 salary and $10 million of his 2017 salary with the opportunity to earn a full guarantee if on the roster in March of those respective years. That works out to a full guarantee of $31.405 million and injury guarantee of $45.03 million.

I like this structure because it gives me Bryant at reasonable cap figures for the next three years that should not be difficult to handle under the current roster makeup. If I absolutely have to I can take money in 2015 or 2016 and prorate it, but I should not have to here. Bryant will turn 30 in 2018 and I would have a good deal of leverage to bring his numbers down if he was no longer an elite receiver at that stage. If he was still a terrific receiver I have plenty of years to prorate money into and work out more reasonable numbers.

Those numbers seem large, but I would not be that worried in the event he was dominant. In this structure his plus 30 years (2018 to 2021) would amount to $60.6 million in non-guaranteed compensation. Brandon Marshall, who would be the elite standard bearer for the plus 30 extension, will earn $39.3 million over a 4 year period. Assuming $7 million a year in cap growth, Marshall’s contract uses up around 6.8% of the total cap room. If the cap grows at the same figure then it’s about 8.8% for Bryant. That’s certainly higher but it is not crippling.

Potential Risk of Not Signing

Outside of injury risk, which exists for every player in the NFL, there are two unique circumstances that might pertain to Bryant which could impact a contract offer made in 2015. The first deals with his quarterback, Tony Romo. Romo has now undergone two back surgeries in the last two years and I think there are some legitimate questions about his health this season. With Orton claiming he will retire from the NFL that would leave Bryant catching passes from the likes of Brandon Weeden. That can crush his statistical production and bring questions up as to how QB dependent Bryant may be.

The other risk lies with the position where three big time receivers will also be up for possible extensions during this year. Those players are AJ Green, Julio Jones, and Demaryius Thomas. Here is how this group matches up in some of the major receiving categories.

There should be no argument that Green is the superior receiver. The case is going to be made that he is superior to Johnson and Fitzgerald at the times they signed their deals and it is a solid case. The only place where he lacks is touchdowns. The other two players you can make a case for as being somewhat equal to Bryant, depending on how much you believe that the players will remain healthy. Thomas is probably most similar in terms of offensive importance and potential QB dependence.

Now there is nothing wrong with dropping from 3^rd to 4^th or 5^th best, but the danger comes in the contract possibilities. Right now the market is set in stone with overpaid players like Wallace and Harvin and the big two on top. Dallas has always been very fair with their players within the existing frameworks of contracts at a position. The same can not be said of the Denver Broncos and Cincinnati Bengals who seem to be much more difficult to deal with on big contracts.

If Bryant plays things out and those two players decide to sign extensions with their respective teams (Jones would be less of a risk to sign a monster deal off injury) it could change the landscape of the WR market and solidify the Johnson and Fitzgerald deals as unattainable outliers. If, for example, Green signs for $13.3 million a season, Bryant has almost no leg to stand on when asking for the moon. At that point it’s about getting a little more than Harvin with strong up front guarantees. Any of these players coming in low in dollars more or less signals that both the club reps and the player agents agree the Wallace, Harvin, and Bowe deals are all invalid and carry the asterisk that nobody would have close to matching those contracts. It also further solidifies the top two being unattainable.

Of course it can work the other way as well. If Jones or Thomas signed in the $14 million plus range it makes getting $15 million an easier task. If Green somehow was to surpass the Johnson contract Bryant should be able to push even higher than $15 million as it redefines the WR market and validates the contracts at the top and second tiers. I find this scenario less likely, but it could be a consideration.

Bryant also has the ability to explode this year and take the leap into the next level when it comes to production. If he opts to play things out and does something like the 1,700 yard type season Johnson put up in 2011 when he earned the monster extension than Bryant can increase his asking price. That should also give him a year that surpasses anything Green does if Green gets an extension.

These are all considerations that both sides need to take into account if they open negotiations over the next few months.

The Final Verdict

I think both sides will benefit in the long run by trying to do a contract now rather than waiting. I think it benefits the Cowboys on the salary cap and locks up Bryant pretty much for his career. Bryant does deserve recognition as one of the top few players in the NFL at the position and should be paid accordingly. For all of the negatives we hear about Bryant I don’t think it has ever impacted his play nor does he give off the vibe that he is a take the money and run player, cruising through the next two or three seasons and collecting a paycheck. It will definitely be a fun situation to keep an eye on and one that maybe will start to play out over the summer.

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Is Alex Smith Worth $18 Million a Season?

Posted on May 28, 2014 by Jason Fitzgerald

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Earlier today there was some discussion about Alex Smith and the Kansas City Chiefs negotiations being pretty much at a standstill due to Smith believing he should be paid upwards of $18 million a season. This figure should come as no surprise to those who listen to the podcast or follow my Twitter feed as I’ve mentioned that number many times in the past. Smith was basically considered a bust for the first six or seven years or his career and little more than a game manager at his best, but the marketplace puts a premium on QB play and there is little mid tier market that exists at the position anymore.

It was not that long ago that the QB market was kind of filled with a few tiers of players. At the top tier you had Drew Brees and Peyton Manning making around $20 million. Following that grouping was Matt Schaub and Mike Vick in the $16 million range. A step down from there were players like Carson Palmer, Ryan Fitzpatrick, and Mark Sanchez in the $13 million range. In between it all you had the outdated contracts or Eli Manning, Phillip Rivers, and Ben Roethlisberger that had set the market a few years back.

Slowly that mid tier of Vick and Schaub through Sanchez evaporated. The new NFL has essentially divided the QB position into high paid veterans and rookies. Aaron Rodgers, Matt Ryan, and Joe Flacco all make over $20 million a season. The low floor was set when Tony Romo, a statistical gem but with a lack of success, made $18 million a season in a new contract signed in 2013. Matt Stafford, a former number 1 overall pick, signed for about $17.7 million. From there you drop all the way down to Smith at $9.3 million and Palmer at $8 million to get a recent reference point (Tom Brady took unique $11.4 million a year deal that won’t be applicable to anyone else). After that it becomes rookie ball and hanger ons.

My assumption last season was that Jay Cutler of the Bears would be the player to re-define that mid tier contract in the $15-$16 million range. Cutler was a classic player to fit that mold. He was talented and had that draft pedigree but there were flaws which never saw the talent turn into stats or incredibly productive team performance. He was the type of player a contending team would never give up on, but probably not the type of player you build around.

Somehow he ended up surpassing Romo in annual value at $18.1 million a season. That should have sent shockwaves around front offices in the NFL because it signaled that talented veterans were going to get paid at a very high level moving forward. It opened the door for Smith, who had been a bargain the last two seasons, to really reach for the stars in contract talks.

Here are how Romo, Cutler, and Smith stack up in some key categories. Please note that these stats are three year averages and are for the seasons leading up to the extension, meaning 2010-2012 for Romo and 2011-2013 for the other two.

	Romo	Cutler	Smith
Age	33	31	30
Games	12.7	12	13.7
Win %	44.7%	61.1%	74.4%
YPA	7.73	7.23	7.00
YPC	11.63	12.06	11.16
YPG	281.37	221.47	199.85
Comp %	66.4%	59.9%	62.7%
TD/Int	1.94	1.55	3.12
TD/G	1.84	1.42	1.29
TD/Att	0.051	0.046	0.045
Comp/TD	13.13	12.96	13.85
Comp/Int	25.53	20.03	43.18

Outside of age and record it is difficult to see any manner in which Cutler compared favorably to Romo. In fact he was outdistanced by Romo in every other category. Smith and Cutler are certainly comparable players. Cutler is going to throw for more yards but that comes with a far higher risk than Smith, who is not nearly as turnover prone. That probably intensifies the game manager label for Smith, but you are also paying for more games when you get Smith. Though the Bears did not sign a pricey backup for Cutler, most teams would consider signing a higher priced backup due to the injury history. Dallas did that with Kyle Orton in the event Romo had another bad injury. Smith has been durable.

Turning to more advanced metrics which are provided by Football Outsiders, Pro Football Focus, Advanced Football Analytics, Pro Football Reference and ESPN we get the following:

	Romo	Cutler	Smith
ANY/A	6.8	5.89	6.16
AV	11	9	10.7
DVOA	18.30%	-3.93%	4.73%
DYAR	944.7	156	374
EffYds	3795	2207	2718
Total QBR	65.6	57.5	55.4
PFF Pass	13.3	4.47	7.33
WPA	2.77	0.8	0.66
EPA	77.2	22.5	38.2
Air Yards/Comp	6.61	7.4	5.76
Avg. YAC	5.02	4.66	5.40

Even moreso than traditional numbers, these categories are dominated by Romo. What Cutler did besides being younger than Romo to warrant a similar contract is hard to imagine. In these categories Smith would be considered a bit superior to Cutler. Cutler’s main strength is that he throws the ball further down the field than Smith. The YAC is not as strong for Cutler, but he would seem more reliable in getting yards without help compared to the others.

Regardless of how you look at the numbers I think it is clear that Smith has a strong argument to match or slightly exceed Cutler’s salary. Smith is one year younger and in the last three seasons been much more successful. While some of Smith’s wins are attributed to being on an excellent team in San Francisco he should benefit greatly from his trade to Kansas City where the team went from worst in the NFL to a double digit win team with Smith at QB. It has marked three straight years that his teams have gone to the playoffs.

Kansas City’s salary cap situation may make things difficult if Smith signs a Cutler size contract. Their salary cap is incredibly tight and it may require a contract with heavy prorated bonus money. The Bears signed Cutler on terms they wanted. The Chiefs probably can not do that with Smith. If they are not sold on Smith at these numbers then its best to hold off before doing a contract even if, in the long run, it makes the cap numbers more difficult to manage. If they still believe that Smith is a game manager that has been lucky by circumstance the last few years then they are better off waiting on a new contract. If things go poorly for him this year they will reap the benefits down the line. This was one of the mistakes Houston made when they extended Schaub a season too early only to regret the decision before the ink even dried on the contract.

Realistically it is hard to believe that Smith could increase his value that much more by winning a championship. The current low value player who received the salary boost from a Super Bowl win is Joe Flacco at $20.1 million. Flacco was 28 when he signed his contract, three years younger than Smith will be if his contract expires. So you are not looking at a difference of $4-5 million per year if he wins as was the case with Flacco.

The bigger risk for the Chiefs in waiting is what happens with the turnover from the 2004 QB draft class, all of whom are in situations that likely will require extensions by the 2015 season. Manning, Roethlisberger, and Rivers are all playing on contracts that really have no valid place in the market. They only have one more year of NFL experience than Smith and could be comparison points for him. If they all end up over $20 million it could push the value for Smith, even if he has a similar season as he had in 2013. That could also benefit the Chiefs if those contracts do not surpass the $20 million barrier and barely surpass the Cutler contract. Manning and Roethlisberger have more championships and ties to their cities while Rivers is going to be a much stronger statistical performer than Smith. Having a strong understanding of where those contracts could be headed might be important in the Chiefs decision making process.

But the $18 million asking price is not outlandish based on what Smith has done the last few seasons. It’s a valid asking price given the Cutler contract and will likely be around what Smith earns from the Chiefs or another team in the NFL. We’ll see how it plays out over the summer.

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