2023 Compensatory Picks Update (5/24/2022)

Normally, once the first Monday after the draft passes, I take a look at where OTC’s projection for the next slate of compensatory picks stands. This year, however, I decided to wait a couple of weeks to see if a couple of unusual transactions would yield additions and changes to the projection–which indeed happened. We’ll dig into that, as well as other unusual circumstances of this year’s projection thus far below. But first, if you have any questions about how this projection is generated, please take a look at the cancellation charts for all 32 teams here, and also refer to OTC’s compensatory formula page as a reference for where certain contracts are ranked. Also note that special compensatory picks generated from 2020 Resolution JC-2A are separate from the regular compensatory pick formula and thus are not addressed here.

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Maximizing Roster Construction by Valuing Positions in the NFL Draft

Last year as we headed into the NFL draft I took a look at how we should put premiums on certain positions at the top of the draft by comparing salary cap benefits and free agent availability of players at each position. Last year I took a short term view of the league and wanted to expand on it to include more data by looking at the last six years of free agent data.

The first thing I did was go back to 2017 an for each year look at the top 20 contracts, as ranked by annual contract value, and determined how many of the players were acquired in free agency. This is extremely important when determining how we are going to build a team in the NFL since we have to have access to talent and if we pass on a specific position in the draft we should know if we have an alternative route to acquiring that talent.

The second thing I wanted to look at was what financial benefit exists by drafting a player. To calculate this I used our projection for the four year cost of the 16th pick of the draft and compared it to the cost of the 10th highest paid player at a position. This is important because while the draft always gives a team access to low cost talent, the spread between a free agent value and a draft slot varies greatly position by position. Every dollar saved in the draft gives a team more money to spend on the rest of the roster to better the team. Here are how the numbers worked out since 2017.

The teams in the bottom right quadrant should be the premium positions to draft. Availability is historically low in free agency and the cost to acquire a player at those positions is very high. QB obviously has the highest value and I think I would put wide receiver as the 2nd most valuable. The next three- Edge, left tackles, and interior defensive line- I think you can argue about how to rank. Edge has become more available in free agency in recent years while left tackle sees no movement. Often the interior players can be found in later rounds easier than the edge and left tackle.  At all these positions the players will likely live up to the contract even if they are not a star simply because the cost is so cheap. The only risk is if they are a total bust.

The bottom left quadrant has positions with low availability but limited cost benefits of drafting in the first round. There is no real argument to draft a running back in the first round but if your hope was to find the top line player who is 23, then you have to draft them, but no real reason to do so early. Linebacker has seen more availability and in a first round should only be selected if there is a pretty big gap between that player and the next available of the premium players.

Top top right contains just one position-cornerback. There is a clear financial benefit to drafting a corner but there are many avenues to finding good cornerbacks. I think it makes sense to draft over the LB/RB quadrant in all cases but there probably needs to be a reasonable gap between the best corner available and the best edge/lt/wr, etc… to justify picking the corner.

Finally, the top left quadrant are the positions that there is no need to draft in the first round. Usually, these positions are not drafted too often that high but every now and then we get “unicorn” talk and the players get selected. Rarely does it lead to a real unicorn impact on a team. These positions are tight end, safety, center, right tackle, and guard.

I know as we get wrapped up in BPA we will say that this makes little sense but lets just illustrate how this could work in practice. Last year the Falcons were faced with a decision between drafting tight end Kyle Pitts or wide receiver Ja’Marr Chase.  Both had excellent rookie seasons but let’s see the impact on the Falcons.

Draft Cost$8,227,624$8,227,624
FA TE/WR$18,000,000$12,500,000
Total Cost$26,227,624$20,727,624

In the Pitts scenario we have to go into free agency and find a WR. That would be a player like Kenny Golladay/Christian Kirk. Our total cost is $26.2M and that assumes we can sign the WR. Had they drafted Chase they could go and sign a tight end for $12.5M(Hunter Henry) and have a total cost of $20.7 million invested. That would have given Atlanta an extra $5.5 million a year to work with. On top of that the talent pool is somewhat better at tight end and almost every year you can find decent players. Wide receiver you often have to hope to find a player who outplays his contract similar to Robert Woods with the Rams. While it is doubtful that either position would ever have the best player available in free agency the Bengals wound up with the upside of a $21-$24 million per year player while the Falcons have a $15-$16 million a year player within the current market.

I put together a chart that adds a premium for each position based on their salary cap benefit as well as the difficulty in finding a player in a free agency. The adjustment is the premium relative to each position. I added a 6 year and 3 year look at free agency is one wants to focus more on modern trends in free agent decision making.

PositionSalary Cap BenefitCap Benefit over AverageTop 20 Signed in Free Agency (6Y)Free Agent Benefit (6Y)Avg. Adjustment (6Y)Top 20 Signed in Free Agency (3Y)Free Agent Benefit (3Y)Avg. Adjustment (3Y)

It is clear why the NFL values the QB so highly while over the long term wide receiver is a clear 2nd. However if focusing more on recent history teams have been so reluctant to let their tackles walk in free agency you can make a strong argument that left tackle is more valuable in a draft. If trades for veteran receivers also continues to pick up steam I think that also strengthens left tackle a bit but it is certainly close.  The defensive line has dropped in recent years but is strong overall.

I was actually a little surprised to see corner, safety, and linebacker so close with linebacker falling more recently. I think when you get into things like the quality of lower cost free agents and the upside with the top players, corner should get the nod but there certainly could be some arguments that could be made.

Guard, center, and right tackle are the three spots where I’m not sure any case could or should be made to take in the first round unless there is simply nobody else available.  

Roster Turnover in the NFL

Every year when we start making projections for teams we often make  or wind up in discussions about the future prospects of a team. More often than not these discussions focus on how a team did in the prior season, how many expensive players are on the team, and how many good recent draft picks are on the roster. I’ve always thought these are kind of foolish since the NFL is so volatile year by year so I wanted to test out a few concepts about the long term prospects of any current roster in the NFL.

The first thing I wanted to look at was simply year by year roster churn. What I did was go back to 2013 and look at every teams roster at the end of the season and then see if that player was on the team the following season and/or the season after that. Here is how the numbers worked out on a league wide basis.

One Year59.7%53.4%59.4%56.2%53.4%54.7%58.7%55.3%56.4%
Two Years37.1%34.7%35.7%33.3%32.9%36.2%36.0%35.1%

To say NFL rosters are unstable is certainly an understatement. On average only 56% of players return from one year to the next and two years out it is just around 35%. Here are the numbers when calculated on a team by team basis.

Avg. Retention59.9%53.6%59.6%56.6%53.7%54.9%59.0%55.5%56.6%
Max Retention68.8%69.8%79.3%71.2%75.0%68.3%69.8%69.8%71.5%
Min. Retention36.1%39.2%41.8%30.6%23.7%34.3%43.2%28.6%34.7%
Quartile 156.1%48.6%54.1%51.5%47.6%50.0%55.3%52.4%51.9%
Quartile 261.8%53.4%59.4%58.1%56.9%55.6%60.0%56.0%57.7%
Quartile 364.7%58.7%64.3%62.1%59.6%61.8%66.3%59.9%62.2%

So about a quarter of the teams will hold over 62% and usually one team a year is around 70%. Maybe with some of those teams there is some validity to the blind reliance on the current roster when looking toward the future. Two years out though?

Avg. Retention37.1%34.9%35.9%33.5%33.2%36.2%36.2%35.3%
Max Retention52.3%51.5%53.4%49.2%51.7%50.8%52.4%51.6%
Min. Retention20.7%21.1%17.9%14.1%11.8%15.9%16.7%16.9%
Quartile 131.2%29.9%31.5%29.0%26.6%30.5%30.4%29.9%
Quartile 235.5%34.5%36.2%35.6%34.1%38.7%37.0%35.9%
Quartile 342.8%39.1%40.7%38.0%42.1%42.0%42.6%41.1%

Our top teams here barely average 50% retention of players. A quarter of the league is under 30%.

The next thing I wanted to look at was the drivers of roster churn. I categorized the changes in a roster to be based on either salary considerations, front office decisions, or performance. The basis for salary inclusion is any contract that averaged at least $5M a year on a new team. A front office decision would be moving on from a sub $5M a year player who lands on another team. Performance is the category of players who simply do not find a NFL home once they are cut or their contract expires.


The performance numbers here are certainly high with about a quarter of a roster not having a NFL job the following season unless it was on a practice squad or for a short stint during the year. About 16% are lower salaried players who move teams and only 3% are really lost because they are “too expensive”. You can extrapolate the numbers for the 2nd year if you want but generally speaking about 7% of player losses come from contract concerns, around 35% decisions made by the staff, and the rest of the time it is because the player no longer has the ability to contribute in the NFL. The low salary numbers should also give caution to any player being sold to “take one for the team”. Teams rarely lose stars because of cost. They lose them because they are no longer playing at a star level.

Finally I wanted to look at roster stability of expensive players, often considered the “backbone” of the team. These are the most proven players in the NFL, but how do their futures work out?  Here is a look at all players who average over $5 million a year and what their status was the next season (a pay cut means that their next contract no longer averages at least $5 million not just that the salary was reduced).


About 12% of the players who are expensive talents will wind up on a lower contract the following season while about 9% are cut and are out of the NFL. That means about a fifth of the “top” talents are not living up the expectations of the contract. The real numbers are more than that but teams are more limited with options for expensive players due to contractual guarantees, dead money on the cap, etc…

Here is how the expensive players fare over a two year period.

Pay cut19.6%21.0%23.8%22.6%24.6%24.5%23.4%22.8%

Again, it becomes very difficult to rely on today’s performance of the most expensive players in the game when nearly 40% of them are seeing their salaries drop they wind up out of the NFL.

That doesn’t mean that trying to project the future is worthless it’s just that the way we often frame the discussions is way off. There is little to gain from taking the high level view at today’s roster and projecting anything in the future unless the team in question has the Patrick Mahomes, Aaron Rodgers type QB on the roster who is going to consistently drive success as long as they are healthy.

Some Thoughts on Baker Mayfield and the Browns

Recently there has been more speculation about the Browns situation with QB Baker Mayfield. Josina Anderson had a good tidbit on the Browns line of thinking that they can slow play the situation

Many seem to imply that Mayfield has leverage over the Browns here because of the presence of Deshaun Watson and the fact that Mayfield has a fully guaranteed $18.858 million salary that they need to get off the books. The feeling is that Mayfield can somehow control his destiny somewhat because his presence will make for too many distractions for the Browns.

One of the things to keep in mind, however, is that time is actually on the Browns side. The salary is already guaranteed so it’s not as if cutting him lets them escape it. They are not pressed for salary cap space and his money is already in that number. It is not like the Matt Ryan situation in Atlanta where there is a looming date that forces a decision.

The Browns already know what trade market does and does not exist for Mayfield and they should have a strong idea as to how much of the salary teams are willing to pick up in a trade.  As teams get further into training camp sometimes they get more desperate especially if an injury occurs (see the Vikings spending a high draft pick on Sam Bradford a few years ago). Because teams also discount future picks so much they may be able to justify sending a higher 2023 pick versus a higher 2022 pick for Mayfield.

The other important thing to consider is that Mayfield can not just go out there and blow the team up in an effort to get traded or released, unless he wants to risk losing his salary in the process. Guaranteed salary is guaranteed until a player does something that would allow a team to void the guarantee. Just because a player is on a guaranteed option year doesn’t mean that the void provisions vanish in a contract. Per the CBA:

Upon exercise of the Option, the above-described guarantees shall be subject to the terms and conditions of any pre-existing individually negotiated non-compensation term in year four of the player’s contract relating to the forfeiture of guarantees (also referred to as “void provisions” in this Subsection for the sake of convenience), to the extent permitted in 43 Article 4, Section 9(g) (“Voiding of Guarantees”). In addition to applying to the previously non-guaranteed amount in the fourth League Year of the player’s contract, the year-four guarantee void provision shall be carried forward to, and shall be applicable to, the player’s Paragraph 5 Salary in the fifth League Year of his contract (the “option year”) unchanged except to the extent necessary to effect the enforceability of such provisions (e.g., without limitation, changes regarding the applicable contract year of such provisions and the amount of the year-five guarantee). Any such changes shall be deemed to have been automatically made effective upon the Club’s exercise of the Option.

While I do not have the particulars of Mayfield’s contract language, standard blanket language would generally void guarantees include refusing to practice and suspension for conduct detrimental.  Many often have clauses related to being publicly critical of a team that can void a guarantee. In addition Mayfield can rack up hefty fines were he to not show up to camp this year- $40,000 per day missed and $1.048 million for every preseason game missed.  

The point is Mayfield likely has to be a model citizen if he wants his $18.8 million salary to remain guaranteed and he likely needs that salary to be guaranteed if he wants to receive it. Right now he is not a player that can go the scorched earth route taken by an Aaron Rodgers type of player. Those players will get paid from another team the minute they were released. Mayfield likely fall in the range of Mitchell Trubisky and Marcus Mariota which means he would be putting somewhere in the ballpark of $10-12 million at risk if he was thinking of just breaking up with the Browns.

Any type of breach would give the Browns a get out of jail free card with Mayfield especially if they know the trade compensation is going to be low and/or require them to eat millions in salary. All it requires is a bit of patience on the Browns part to wait and see how the situation plays out if they can not find a trade partner leading up to this year’s draft.

Reassessing the Value of Contracts

A recent run of signings in the NFL this March is going to bring into question the way in which we are valuing contracts. Usually, one of the first things we look at when valuing the contract of a player is the average per year (APY) of the contract. While it certainly is not a perfect way to gauge the true intention or strength of the contract it at least gives a pretty reasonable way to look at the market for a particular position. There are usually a handful of red flag type deals but Tyreek Hill signing a “$30 million a year” contract yesterday is really making me question how we should be looking at really assessing the annual value of a contract in the future.

Hill’s contract, for those unfamiliar with it, carries a monster salary in the final year of the contract- $45 million to be exact- and it’s only purpose is to inflate the annual contract value from a pretty impressive $25 million a year to a stunning $30 million a year. From a practical standpoint it is simply functioning as a void year for the Dolphins and if a year like that were included in a lesser player’s contract we would simply value it as a void season.

This concept is by no means new in the NFL but it has been more or less dormant for many years. Back in the earlier days of the salary cap contracts often ran for 7+ years. At the time there was far more of a focus on total contract values than the actually important things for a player- how much will they earn in one year, how much in two years, what are the odds of being cut- and that inflated values for many players. As the NFL cut down on the number of years allowed for salary cap proration and as teams started to realize the benefits of playing younger players those balloon salaries disappeared from contracts. Now it is back and it makes it very difficult to compare apples to apples especially within the wide receiver market.

The first contract where this concept seemed to come back for the receivers was actually the contract of Keenan Allen. The Chargers used a bloated, but at least somewhat realistic, salary in the final year of the contract to move his deal from $19 million a year to over $20 million a year. While clearly a year that is unlikely to be earned you can’t look at it and say that is a bogus year. The Davante Adams and Hill contracts completely changed that dynamic.

Here is how Hill’s and Davante Adams’ yearly “new money” cash flows line up with the rest of the market.

PlayerAPY1st Year Cash2nd Year Cash3rd Year Cash4th Year Cash5th Year Cash
Tyreek Hill$30,000,000$32,300,000$52,065,000$75,000,000$120,000,000
Davante Adams$28,000,000$23,350,000$50,020,000$67,510,000$103,750,000$140,000,000
Deandre Hopkins$27,250,000$39,585,000$54,500,000
Julio Jones$22,000,000$42,974,000$54,487,000$66,000,000
DJ Moore$20,628,000$29,784,000$45,834,000$61,884,000
Keenan Allen$20,025,000$21,500,000$38,000,000$57,000,000$80,100,000
Mike Williams$20,000,000$28,000,000$40,000,000$60,000,000
Amari Cooper$20,000,000$20,000,000$40,000,000$60,000,000

Clearly these are strong contracts. but the APY clearly misrepresents the way they compare. As an easier way to compare let’s look at the yearly APY for each contract. I also included the averages for the bloated contracts at the top and the smaller ones at the bottom.

Tyreek Hill$30,000,000$32,300,000$26,032,500$25,000,000$30,000,000
Davante Adams$28,000,000$23,350,000$25,010,000$22,503,333$25,937,500$28,000,000
Deandre Hopkins$27,250,000$39,585,000$27,250,000
Julio Jones$22,000,000$42,974,000$27,243,500$22,000,000
DJ Moore$20,628,000$29,784,000$22,917,000$20,628,000
Keenan Allen$20,025,000$21,500,000$19,000,000$19,000,000$20,025,000
Mike Williams$20,000,000$28,000,000$20,000,000$20,000,000
Amari Cooper$20,000,000$20,000,000$20,000,000$20,000,000
Hill, Adams, Hopkins$28,416,667$31,745,000$26,097,500$23,751,667
Jones, Moore, etc…$20,530,600$28,451,600$21,832,100$20,325,600
% Difference38.4%11.6%19.5%16.9%

The stated APY indicates that the upper tier is worth nearly 40% more than the lower part of the elite level contracts in the NFL, but the real numbers indicate a much narrower spread, basically somewhere between 15 and 20%. 

This is also why when we hear the overused phrase “this is a gamechanger” (and I am as guilty as anyone of using it) it probably doesn’t mean much. Hill and Adams are two of the best receivers in the NFL and should be the highest paid. Earning 20% or so over the other top players is basically to be expected. Really the only movement at all that could represent a shift at all would be Hill’s third year reaching $25 million per year.

The real reason we got to this spot with this position also comes from another difficult area- how do we value a trade in player contract?  The first time I really remember thinking about this was when the Seahawks traded for Percy Harvin years ago and immediately extended him to a regrettable contract. If we value the contract by new money the way we would a normal extension, Harvin was worth $12.84 million a year. If we look at it as an entirely new contract he would have been worth $11.2 million a year. Trades were so rare then it didn’t really make a difference but as they become more prevalent that also poses a problem.

When a team trades for a player they have no “skin in the game” so to speak with the contract. In Harvin’s case it seemed clear that Seattle was negotiating a six year $67 million contract not a five year extension worth $64.217 million. In Miami’s case with Hill, though, the numbers were clearly designed to fit the model of a traditional extension.

From the player’s perspective the new money is what they do care about but the absurdity of the Hopkins contract is really what has led to the need to do these funny money years at the end. The Cardinals fleeced the Texans in a trade for Hopkins back in 2020 in large part because the Texans did not want to add salary to Hopkins existing contract. The contract had three years remaining at the time.

Arizona was more than happy to negotiate the contract with Hopkins. They would never have access to a player at that talent level in free agency and this was essentially a brand new contract for them.  They gave him his big raise and valued as “new money” it was about a 25% raise over the rest of the market. Because that was the number that was touted when signed it became a number that Adams had to beat. No team in the NFL could come up with a real structure to beat it because in their mind that contract doesn’t exist. If we value Hopkins and Hill from a team perspective the numbers change dramatically.

PlayerAPY1st Year Cash2nd Year Cash3rd Year Cash4th Year Cash5th Year Cash
Tyreek Hill$23,858,750$26,635,000$52,735,000$72,500,000$95,435,000$140,435,000
Deandre Hopkins$18,883,000$29,000,000$42,750,000$60,050,000$79,500,000$94,415,000

Hopkins is worth about $18.9 million per year which is exactly in line with the market at the time. His $60 million three year number just tops $20 million a season and then his value slowly comes down on the back end. That is a traditional contract structure.

Hill’s contract carries a four year annual value of about $24 million. These are really strong numbers throughout and a logical increase from the Jones contract which had been the top contract at $22 million per year.

The question is how many teams will follow suit in the future with this structure. For teams like the Dolphins and Raiders it doesn’t matter. Adams and Hill are third contract players and likely would not see the end of a traditional four year contract so who cares what that salary is since the outcome is going to be a release.

However, for teams extending players or signing a young free agent there are negative consequences. The massive salary prevents the team from being able to use a franchise tag if the player were to still be productive towards the end of his contract. It also forces a cut rather than letting the player go to free agency and potentially get you a compensatory pick. While those players who make it to the end of a contract are rare it does happen.

It presents a challenge for teams, agents, and players alike depending on the situation. I don’t know the best way to handle it, but this is definitely something we need to give more thought to if it spreads more around the NFL in the coming year or two.

OTC Podcast: March 19, 2022

In this week’s OTC Podcast

  • Deshaun Watson to the Browns
  • Aaron Rodgers contract and the QB market
  • Quick free agency thoughts
  • All of your questions for the week

Listen on Google Play Music

Deshaun Watson to the Browns

In a stunning turn of events the Browns went from being out of the Deshaun Watson trade discussion to landing the superstar quarterback via trade with the Texans. As part of the trade Watson secured a new contract that is worth $230 million over five years and is fully guaranteed. I guess as they say “money talks” and the Browns put up a great offer.

The cost is nothing short of stunning and an amazing win for his agency, Athletes First. Watson originally had been schedule to earn $136 million over the next four seasons. Effectively the Browns just threw him a $94 million franchise tag for the rights to the 2026 season. It is an absurd amount of money which I would guess no team in the NFL would come close to matching, especially give the costs of the trade. According to Albert Breer the Browns will give up three first round picks and two other high draft picks in addition to forking over the major contract.

Watson’s new contract will average $46 million per year which will make him the highest paid player in the NFL, depending on how one views Aaron Rodgers recent contract extension which can be valued as high as $50 million per year or in the sub $40 million per year range.

You could arguably value Watson’s number at $50 million per year. Watson never technically played a down that extended into his non-rookie contract years for the Texans under the terms of his extension he signed in 2020. The Texans paid him $20 million in new money for those years. His “veteran” years technically were to begin with the 2022 season. So if we add that raise to this new contract you get $250 million for five seasons, all of which was guaranteed. This might be the greatest job securing money for a player in NFL history.

The Texans will carry $16.2 million in dead money for Watson which will open up $24.2 million in cap room for the Texans. How they will use that is anyone’s guess. Given their recent history they will probably sign 8 players making $3 million a year. That aspect is really unimportant for them as they need to use these pieces to rebuild a franchise that was devastated by bad trades and bad contract decisions.

The Browns will need $35 million in cap space to execute this trade. We currently estimate that they have about $16 million. If they can not unload Baker Mayfield and his $18.828 million salary as part of this trade they will either have to quickly find a trade partner for him or make some other adjustments. They can open up around $15 million in a max restructure of Amari Cooper’s contract and beyond that would likely have to get Denzel Ward to tack void years onto his contract. Another option would be to release Case Keenum with the intent of signing him once Watson’s new contract and lower cap number are finalized. The Browns will open up $9.5 million in cap room on June 2nd so they have plenty of cap room coming in the future.

This trade should open up to discussion the concept of including no trade clauses in NFL contracts. For the most part these were clauses only in the contracts of quarterbacks because there was a feeling that teams would not move their franchise players. However we are now seeing a number of players demanding trades which puts teams in a very difficult spot. When a player can also dictate his destination you lose leverage in the trade talks. The Texans did something unique in that they would not allow teams to talk with Watson until they presented an offer to Houston that would be acceptable, which gave Houston more leverage, but in the future I would expect these clauses to either be gone or teams to go back to the days of using salary advances to try to recover money along with the picks as part of a trade.