Roster Moves

Jets Extend WR Jeremy Kerley for 4 Years, $16 Million

Posted on by Jason Fitzgerald

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According to multiple outlets the Jets and wide receiver Jeremy Kerley have agreed to a four year contract extension worth $16 million with $5.4 million of the contract guaranteed.

The reported numbers put Kerley right below recent contracts signed by Julian Edelman ($4.25M per year) and Doug Baldwin ($4.33M). The total dollar figure and guarantee seem to indicate a contract very similar to the one signed by Andre Roberts with the Washington Redskins at $16 million with a $5.25 million guarantee.

I would assume Kerley’s $5.4 million guarantee is a true guarantee and not a combination of full and injury only guarantees based on the other contracts. Kerley’s salary this season was $1.431 million following his earning of the Proven Performance Escalator, and if I had to venture a guess would imagine is now guaranteed. That would leave a signing bonus in the region of $4-$4.6 million depending on how much, if any is guaranteed, in 2015.  Regardless the cap hits on the contract should be very reasonable for the Jets.

Kerley is one of the few bright spots in recent years on the Jets. He developed nicely since being drafted in 2011 into the best receiver on the team and I believe would have put up very strong numbers on a better offense. Following the trade  for Percy Harvin I had assumed that it would have meant the end for Kerley in Jet green, but the front office must believe the two can complement each other in the office.

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The Tampa Bay Buccaneers Heavy Investments in Free Agency

Posted on by Jason Fitzgerald

Thursday night the Tampa Bay Buccaneers put up one of the worst performances in the history of the NFL, falling behind the Atlanta Falcons 56-0 before the Falcons mercifully called off the dogs late in the 3rd quarter. The Buccaneers at 0-3 look to be finished for the season and may soon be a lesson in roster building for the rest of the NFL.

There may be no team in the NFL that was built more via outside organizations than the Tampa Bay Buccaneers. The philosophy is now funneling through two regimes. Last season the Buccaneers fired head coach Greg Schiano and general manager Mark Dominik for the failures of the 2013 season. But somewhere in the organization there must have been a feeling that the team was on the right path because they continued to pursue free agents in a “win now” style and brought in veteran head coach Lovie Smith to make the project work.  Thus far it’s been a colossal failure.

The Buccaneers use a very different contract and salary cap management system than almost anyone else in the NFL. Their philosophy primarily is based on an “all cash” method of management in which the team maintains strong up front cash flow controls by forgoing the use of the traditional signing bonus. This not only avoids those big first year cash payments but also keeps contracts from containing dead money at the back end that might cause a team to keep a player past his shelf life. In theory players can be traded at will and released as soon as the projected skill declines occur.

There is, however, a downside to this system. As a tradeoff to the lack of up front money and dead money protection in a contract the Buccaneers are often agreeing to contracts that are at an extremely high salary level on a per year basis. In addition to ensure that they earn what they would earn from a team that uses large signing bonuses the team is often placed in a position where they over-guarantee the contract, which limits the flexibility they have. For the system to really work properly the team needs to have a very strict conviction to not go back and begin to prorate money, a conviction that the Buccaneers failed to show in 2012.

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The manner in which the Bucs have been built is almost scary. Of their top 15 contracts, valued in terms of annual value, only four are held by homegrown players. Those players are Gerald McCoy, Mike Evans, Mark Barron, and Adrian Clayborn. Of those players only McCoy ranks in the top 8.

That list also does not include all the misses that the team has made and walked away from, perhaps none bigger than the disaster that turned out to be the trade for Darrelle Revis.  The Buccaneers pursuit of Revis really began at the end of the 2012 season when the Bucs front office hastily reworked the contracts of wide receiver Vincent Jackson and guard Carl Nicks late in the season to lead to massive reductions in their 2013 cap charges and open up the cap space needed to make a run at a big player. Tampa would eventually surrender a first round pick to the New York Jets for Revis, who was coming off an ACL injury. Revis was signed for $16 million in 2013. He was subsequently released in  2014 due to his high salary.

Here is the list of recent contract moves made by the Buccaneers in their construction of their team.

PlayerPositionYear SignedHow AcquiredAnnual Value
Darrelle RevisCB2013Trade$16,000,000
Vincent JacksonWR2012Free Agent$11,111,111
Carl NicksG2012Free Agent$9,500,000
Michael JohnsonDE2014Free Agent$8,750,000
Dashon GoldsonS2013Free Agent$8,250,000
Logan MankinsG2014Trade$8,250,000
Mike WilliamsWR2013Extension$7,924,000
Davin JosephG2011Extension$7,500,000
Alterraun VernerCB2014Free Agent$6,375,000
Anthony CollinsT2014Free Agent$6,000,000
Josh McCownQB2014Free Agent$5,000,000
Evan Dietrich-SmithC2014Free Agent$3,562,500
Michael KoenenP2011Free Agent$3,250,000
Clinton McDonaldDT2014Free Agent$3,000,000
Brandon MyersTE2014Free Agent$2,125,000

On that list Revis, Nicks, Williams, and Joseph are all off the team. Revis and Williams lasted one year, Nicks two years, and Joseph three years. Williams and Joseph were the only two on the list whose careers were in Tampa from the start. Many of those players on the top of the list were among the top of their positions when they signed the deals.  Since 2011 the Bucs have won just 15 games. That’s a lot of coin to spend for 15 wins over a 51 game stretch.

I think at this point the Buccaneers really need to begin a hard evaluation process of what they have on this roster moving forward. Clearly the free agent/big contract route has not worked and it may be time to re-tool their whole approach to roster building.

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The evaluation has to begin at the QB position. The signing of McCown, who has been little else than a journeyman in the past, was strictly done because the front office felt a competent veteran was a perfect fit for the team. It wasn’t. With a high draft pick looking like a certainty the team must turn the reigns over to Mike Glennon and see if there is anything there moving forward. He was not terrible last season and he could be a decent option, if not as a starter than as a long term backup solution.

Since most of these contracts contain little prorated money they should begin dismantling most of the team and seeing if there is any value around the NFL in some of their pieces to begin the process of rebuilding through the draft. Mankins, McCown, Dietrich-Smith, Koenen, McDonald, and Myers could all have salaries reduced or be released next season since they can move away from those contracts with minimal cap implications. Goldson and Jackson would be some residuals but their contracts would not be safe. Both of those players, who are on the wrong side of 30, probably have trade value to a contending team, perhaps even this season.

Tampa Bay already has a great deal of cap space in 2015, but there is nothing that is forcing them to spend it. Other than McCoy I don’t believe they have any mega free agents to re-sign next season and that money is best carried over to the future when they do have the talent that justifies the expenses.

There is certainly a time and place for big spending in free agency. But I believe that the time for that often comes when you already have a young core that was built through at least two draft classes in place before you make that move. Preferably that young talent lies in some of the higher priced positions (QB, LT, WR, DE, CB). The Buccaneers big spending binge really began in 2012 and at that point their young core was really McCoy and Williams, both from the 2010 draft, and Josh Freeman from the 2009 draft. McCoy was coming off two injury plagued seasons and Freeman completely unproven. It was not the best of times to begin a free agent invasion of the team. The end result was the product that the team put on the field against Atlanta.

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Patriots Agree to Trade Logan Mankins to Buccaneers

Posted on by Jason Fitzgerald

The Patriots are no stranger to surprising late summer roster moves and this year’s edition sees them moving long time Guard Logan Mankins to the Tampa Bay Buccaneers for Tim Wright and a draft pick.

Mankins, our pick for worst contract on the Patriots over the last two seasons, signed a monster contract in 2011 that he had little chance to live up to. His contract remains the top valued contract among Guards and he is still a top five earner in cash salary, four years into the deal. He carried a $10.25 million cap charge in 2014 for the Patriots which was the 2nd highest in the NFL at the position this year.

Mankins still had $8 million in dead money remaining in his contract, but because this move was made after June 1 the Patriots will split that cost across two seasons. Mankins also earned a $250,000 workout bonus so his cap charge for the Patriots this year will be $4.25 million, a savings of $6.25 million. In 2015 he will count for $4 million against the cap.

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Tampa Bay will assume Mankins remaining salaries in his contract. Those figures are $6.25 million in 2014 and $7 million in both 2015 and 2016. I did read in a few places the suggestion that Mankins could retire rather than accept the trade, but if that were to occur the Buccaneers would have the rights to try to recover the $8 million in signing bonus money left in his contract. This situation occured years ago when the Denver Broncos traded Jake Plummer to the Buccaneers and Plummer did not want to play in Tampa Bay.

I’d consider this a pretty classic salary dump. Nobody knows how long this trade was being discussed but since the Buccaneers brought in Richie Incgnito for a visit yesterday I would tend to think that may have gotten the Patriots thinking they found a team desperate enough to take Mankins off their hands.  The money saved this year will improve their future salary cap position to help extend good players who were drafted in 2010 and 2011 and are up for extensions.

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Vernon Davis’ Potential Holdout Indicates a Possible Fantex Problem

Posted on by Jason Fitzgerald

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According to Mat Maiocco, 49ers Tight End Vernon Davis is seeking a new contract. He is not attending the offseason workout program and will forfeit $200,000 of income by doing so.  Players seeking a new contract is nothing new, but I thought this was a case worth talking about because of Davis’ involvement with Fantex and how this could provide a problem for the NFL in the future.

Fantex is a company that allows people to “invest” in the brand of a NFL football player. Essentially they pay the player a large sum of money up front to receive a percentage of all future earned income. For the most part this income will be derived from playing football. The three brand contracts currently available are for Davis, Arian Foster, and EJ Manuel.

For Davis he was paid $4 million by Fantex for the rights to 10% of his future income. In 2014, Davis was scheduled to earn $5.3 million to play football for the 49ers, so the upfront payment by Fantex covers about 75% of his expected income for the year. Now Fantex is protected from players “resigning” within two years, but there does not seem to be anything related to “holding out” or voluntarily forgoing payments within a contract, such as the $200,000 workout bonus or which Fantex would have received $20,000.

Workout bonuses were designed by teams as a method to encourage near year round supervision by a team and as a means of holdout protection. The basic premise is that if you make the payment large enough the player will attend.  Secondly the CBA contains very harsh language that enables players who hold out of training camp to receive moderate fines and to potentially forfeit signing bonus money previously paid. Usually this money is recovered from the player when the contract situation is resolved and the money taken out of a players’ weekly paycheck. Because these penalties can add up, most players do not want to chance anything more than the minimum allowable holdout that does not incur forfeiture of money.

However, the Fantex business presents a very different opportunity for the player. With $4 million in his pocket, the $200,000 bonus essentially becomes worthless as an enticement to workout with the team.  It makes the risk of fine and forfeiture as he could potentially give up significant portions of money to fight for a new contract since he will have already pocketed 75% of his original expected income for 2014. In addition if weekly paychecks are reduced by fines and forfeited money, the severity of the loss is less due to the Fantex association. For instance a $100,000 fine on a $1 million paycheck should result in a net loss of $90,000 for Davis with Fantex taking on the other $10,000.

I’m not sure how much of a future there is in these brand contracts for the NFL players. The Davis and Foster IPOs were incredibly overpriced, with virtually no chance of the company ever earning back the initial investment in real terms let alone factoring in interest. But if fans are willing to spend money to “own” a part of a player in the ultimate fantasy football scenario they may be able to keep entering into these contracts for years.

If that is the case the NFL is going to have to consider tying more base salary to workout participation through de-escalator clauses or using offseason reporting bonuses as a means of better holdout protection. The Fantex model essentially evades the spirit of the CBA and certain contract language designed to avoid holdouts. It is something they must adjust for.

Davis holding out I guess is somewhat understandable. He is 30 years old and coming off his best season since 2010. The odds of repeating that season are slim. Last year Davis was the teams’ second target due to injuries and lack of depth, and their only real deep threat.  It’s a different landscape in 2014 with Michael Crabtree expected to be healthy for 16 games and a trade for Steve Johnson to play the third receiver role. It will be a struggle to find as many targets in this crowded field.

The 49ers are up against the salary cap wall due to a strong record of successful drafts and veteran acquisitions. My estimates have the 49ers with around $128 million committed to the 2015 salary cap with no Quarterback under contract.  Crabtree is also a free agent and it’s doubtful the team can afford Boldin, Davis and Johnson in 2015.  Releasing Davis saves the team nearly $5 million in cap room   putting him in free agency at 31 years old and likely off a mediocre statistical season to work off of. The 49ers could also decide that Davis is the player they want to keep for one more year and to simply let him play out his contract before he rides off into the sunset at 32, which is certainly not the ideal age to hit free agency when it’s universally accepted that the best years are finished.

Regardless of the reasoning, Fantex is going to empower players to think about holdouts in the future. The NFL usually reacts quickly and I’d expect them to begin thinking of ways to combat this very quickly.

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The June 1 Date and What It Means in the NFL

Posted on by Jason Fitzgerald

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June 1 represents an important day in the calendar year for the NFL. It is a day when various rules and tenders change.

The biggest impact for teams involves the modification of salary cap accounting rules for players whose contracts will be terminated after June 1 or whose contracts were terminated with the “Post June 1” designation.  Prior to June 1 any player removed from a teams roster, either by release or trade, will have all their remaining salary cap allocations accelerate into the current League Year. For example a player with $1 million in prorated money from 2014 to 2017 whose contract is terminated will carry a “dead money” charge of $4 million in 2014.

However, after June 1 that “dead money” charge now splits between two seasons.  Once released the team only needs to account for the current years prorated money in their 2014 salary cap accounting. All future years’ prorated money will now land as “dead money” in 2015. So for the example player above the “dead money” charges will equal $1 million in 2014 and $3 million in 2015. In practice this rule allows teams with underperforming, high priced players to release players before the season and remain salary cap compliant. If such a rule did not exist many teams would have a difficult time, with their salary caps often tight, to release a player with high prorated charges.

It is important to note, though, that the June 1 rule does not apply to future guaranteed salary. Such future guarantees immediately accelerate into the current season if a player is released. There is no split of those figures.

For many teams June 2 will open up significant cap room. This is because players designated a “June 1” cut in the offseason will finally come off the books for those teams. The offseason June 1 designation is used when players do not factor into a teams future plans but the team is usually unable to release the player due to the high “dead money” charge associated with the contract, which, in many cases, would make the team no longer salary cap compliant. Often the team does not wait until June 1 to make the move in order to avoid guarantees kicking in (usually the first week of free agency by sometimes as late as April), roster bonuses from being earned (almost exclusively in the first week or free agency) or non-exercise fees from option bonuses to be made.  Prior to June 1 the players’ entire salary cap charge remains on the books even though they are no longer on the team. On June 2 only the current years’ proration will remain on the books with the balance being charged to 2015.

Here is the list of June 1 cuts who will come off the books next Monday, giving them the space they need for extensions, rookie signings, or just a functional budget for the upcoming season:

PlayerTeamCurrent ChargeNew 2014 ChargeNew 2015 ChargeCap Space Gained
LaMarr WoodleySteelers$13,590,000$5,590,000$8,580,000$8,000,000
Miles AustinCowboys$8,249,400$2,749,400$5,106,200$5,500,000
David BassGiants$8,225,000$3,225,000$3,225,000$5,000,000
Carlos Rogers49ers$8,094,531$1,494,531$1,494,532$6,600,000
Daryn ColledgeCardinals$7,275,000$2,275,000$2,275,000$5,000,000
Thomas DeCoudFalcons$4,800,000$600,000$600,000$4,200,000
Steve SmithPanthers$7,000,000$5,000,000$4,000,000$2,000,000

Not surprisingly every one of these teams has less than $5.5 million in cap room as of May 28, 2014. In the case of the Giants, Steelers, and 49ers it is less than $3 million. So the money is a huge boost to them.

Other teams with very tight salary cap situations include the Detroit Lions ($1.1 million), New Orleans Saints ($1.9 million), Washington Redskins ($2.3 million), San Diego Chargers ($3.1 million), and Kansas City Chiefs ($3.6 million).  Of those teams, the Chargers, Chiefs, and Lions all have their top draft selection unsigned, which will make that space even tighter. The Lions in particular do not have the space to sign TE Eric Ebron whose cap charge will be just over $2.2 million. For these clubs in particular the switch to June 1 accounting gives them some added leverage in talks to renegotiate a contract with or trade a high cap charge player.

June 1 is also the day in which NFL teams have a decision to make on their former players who were Unrestricted Free Agents and remain unsigned. The team has an option to extend a tender offer of either 110% of the players’ prior year salary cap charge (minus workout and incentive payments) if a veteran or 100% of the players prior years base salary if the player was on a rookie contract. If the June 1 tender is made the player has until July 22 to sign with another team. At that point his former team retains exclusive negotiating rights throughout the season. These June 1 tender amounts do not count against the salary cap until July 15.

If no tender is made, which is usually the case, the player immediately becomes what is referred to as a “street free agent”, meaning their rights were relinquished by another team. This is important because the player, if signed, no longer factors into the compensatory pick equation for the 2015 NFL draft. For teams like the Baltimore Ravens and Green Bay Packers who both do their best to avoid signing true UFA’s due to the compensatory draft this now gives them the green light to go back into the veteran player pool and consider bringing in talent.

For Restricted Free Agents who have yet to sign contracts their important date is June 15. It is on this date that the team can reduce the tender to 110% of his prior year’s salary. WR Doug Baldwin of the Seattle Seahawks would be the player to watch for this. According to reports Baldwin is currently negotiating an extension with Seattle.  His RFA tender is a non-guaranteed $2.187 million. If no deal is made Seattle could reduce his offer in the $610,000 range. (Please note that this was written prior to Baldwin signing an extension with Seattle, so while this illustrates the manner this could work it is no longer valid for the specific player)

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Poison Pills and Alex Mack

Posted on by Jason Fitzgerald

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With the news of the Alex Mack contract with the Jacksonville Jaguars fresh in the news a phrase I had not heard in some time is resurfacing- “poison pill”.  A poison pill contract is a type of contract that is given to a player whose rights are still controlled, whether by the restricted, franchise, or transition designations, by another team. The offer sheet is then written with a specific clause that does not allow the other team to match the offer sheet.

The most famous “poision pill” contracts were used by the Seattle Seahawks and Minnesota Vikings who got into a bit of a struggle over free agents. Minnesota fired the first shot when they signed Seahawks G Steve Hutchinson to a $49 million contract, which contained the stipulation that if Hutchinson was not the highest paid offensive lineman on the team the entire contract would guarantee. Seattle already had a highly compensated lineman (Walter Jones) and thus could not match the offer sheet. Seattle fired back signing Vikings WR Nate Burleson to a similar deal that would guarantee if he played at least five games in the state of Minnesota. Burleson quickly became a Viking.

The NFL would eventually ban this practice, explicitly stating “no poison pills”.  Now the terms of an offer sheet must apply equally to both teams. That means you can not craft an offer sheet that gives bonuses for playing games in a certain state or guarantee if the contract is higher than a specific positional players already on another team. For the most part the practice was gone.

Based on some rumors it sounds as if Mack and the Jaguars are going back to an offer sheet made by the New York Jets in 1998 to Patriots’ running back Curtis Martin as a basis for Mack’s offer sheet. The Jets devised a contract where Martin would be paid $4 million guaranteed for the 1998 season, which was a pretty high number in 1998 and near impossible for the Patriots to fit in their cap, but with a twist.

About one month after signing the contract, Martin would have to decide whether or not to exercise a player option that kept in place the remaining five years of the contract. If he did not invoke the option he would become a free agent in 1999 and the team would not have the ability to name him a Franchise or Transition player. If he did exercise the option the remaining years would stay and Martin would be paid an option bonus of over $7 million.

From the Patriots perspective what the contract was trying to accomplish was clear.  Because the decision period was so short, it was almost a given that Martin would void the contract and waltz to the Jets in 1999 if they matched the offer. Since he could not be declared a Franchise player the Patriots would get no compensation when that occurred. In addition if Martin did invoke the option the Patriots would have serious maneuvering to do to get their roster cap compliant. They also knew that Martin was going to exercise the option once he was a member of the Jets. In essence, Eugene Parker (Martin’s agent), Bill Parcells, and Jets cap manager Mike Tannenbaum crafted two contracts- one that would apply to New England and one to the Jets- in one offer sheet. New England protested but eventually Martin became a member of the Jets, who he would finish a Hal of Fame career with. This type of “poison pill” is not banned by the NFL, since it treats both teams equally on paper.

With the Cleveland Browns having so much salary cap space, the only way to steal Mack away is to craft an offer sheet that they can’t match for other reasons. I thought this might be accomplished through well above market cash flows on the front end of the contract, but it sounds as if the Jaguars want to be more certain. Most reports make it sound as if Mack does not want to return to Cleveland primarily because they did not show real interest in keeping him long term at the start of the process. Perhaps the constant turnover in the front office also plays a role in the decision. Using Martin’s contract as a template essentially gives Mack the out he wants. Questions of injury would certainly be an issue but that would be the risk that one takes. They could push the option date further thus giving him time to assess his health and the market, but the further that’s pushed out the more chance there is that the Mack would stay in Cleveland which does not protect the Jaguars interests, though they would likely have moved on by 2015 anyway.

If the Browns lose Mack they have nobody to blame but themselves. Because of the disparity in costs between a center and elite tackle, the tag game should have never really entered the equation. At a $10 million contract Mack would be one of the most overpaid players in the NFL.  It is a position where you simply should begin negotiations as soon as you know you want the player. Considering the cap space and low payroll the Browns have if they must have gone the tag route they should have used the franchise tag to protect their interest. The cost of the franchise tag was only $1.6 million more and it gave the team the ability to receive two first round draft picks if Mack signed with another team.  Now they get nothing if they do not match the offer sheet. The Browns have been poorly managed for years with a revolving cast of characters in charge of the franchise and this is just the latest potential mishap for the team.

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Details of Kenny Britt’s Contract with Rams

Posted on by Jason Fitzgerald

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The signing of WR Kenny Britt by the St. Louis Rams became official yesterday and via a source with knowledge of the contract we have the full breakdown of the contract.

Britt’s contract carries a value of $1,400,000 with $550,000 fully guaranteed. Britt will earn $1,000,000 in base salary in 2014, $500,000 of which is fully guaranteed for skill, injury, and salary cap termination. Britt also received a $50,000 bonus upon signing the contract. Britt can earn a $150,000 roster bonus for being on the active 53 man roster for the first game of the season, up to $100,000 in gameday active roster bonuses and a $100,000 offseason workout bonus. I believe Britt was active for 12 games last season so the initial cap charge should be $1,375,000. Britt can earn up to an additional $1.5 million in incentives, based on playing time, performance, and team success.

All things considered this is a strong contract for Britt. Between injuries, off the field issues, and lack of playing time from the Titans he would have seemed to be a candidate for a one year minimum salary deal. But Britt does have talent and the Rams were willing to go a bit higher in the hopes of finding a decent receiver, someone they have lacked for many years.

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