Late last week linebacker Lavonte David signed a huge contract extension that certainly caught the attention of people. Playing at the generally underappreciated non-rush outside linebacker position, David not only set the market, he obliterated it. At just over $10 million a season David would earn nearly $1.6 million more a year than DeAndre Levy of the Lions and would earn more than all but three of the rush linebackers in the NFL. But sometimes numbers can be a bit deceiving and to some extent they are in this case. The David deal is a wonderful illustration of ways that a negotiator can build on other contracts and then find ways to improve the bottom line to make sure all sides leave happy.
David’s contract follows the standard pattern for the Buccaneers, which is to avoid the use of prorated bonus money. Instead the team utilizes guaranteed roster bonuses and salaries to compensate the player. The benefits are generally a slower outflow of cash to the player and no dead money (usually) after the second season of the contract. Due to the team benefits of the contract, the Bucs often compromise on the overall contract value and offsets in a contract. While the strategy hasn’t really worked that well thus far (they rank 3rd in dead money this year) and they have whiffed badly on players like Dashon Goldson and Michael Johnson, it does make for a unique approach that more teams seems to be studying.
Just the other day Levy set the market for the 43 outside linebacker position with his four year, $33.75 million deal. People immediately wondered what that would mean for David with some thinking $10 million and others, like myself, thinking just slightly over Levy’s. As things turned out I think both were right and the Bucs clearly built on Levy’s recent contract and then borrowed a page from the Seahawks book with Bobby Wagner to likely make the deal happen. Here is how the first two years of each player’s contract plays out in terms of earned cash:
|Player||Year 0||Year 1||Year 2|
As you can see here, despite the disparity in overall annual value, David’s contract is basically worth $250,000 more over two years than Levy’s. Both deals likely worked off Wagner’s contract as well, whose two year total slightly trails both players. All have similar guarantees, with yearly guarantees being earned early in each League Year. Where Levy and Wagner both have much stronger contracts is in the bonus structure. Levy received a $12 million signing bonus while Wagner will earn $12 million in bonuses over two years. That gives those players some backend cap protection because of the accounting cost associated with releasing them.
When you consider there is zero cost associated with David’s release after next season the backend of the contract is mainly money used to make the contract look to explode past anyone else in the game. This is exactly what the Seahawks did with Wagner, whose contract was actually inferior to the next highest paid player but carried a higher annual value. For David to likely see those last years he will need to maintain a very high level of play. In that respect those backend salaries are basically dangling incentives by the front office. Here is the comparison of the backend salaries.
|Player||Year 3||Year 4||Year 5|
David goes from running neck and neck with Levy to earning about $3 million more each season, just like what Wagner did to the ILB position. But these years are all very questionable years for David. When you consider the Bucs released Johnson after just one season despite the guaranteed salary, David could very well be looking at a one year $10 million deal if something went really badly and the Bucs decide to change course. While that is unlikely to occur, if it happened he would end up with the lowest take of the three.
So while David certainly did set the market Id look at this more as simply building on the Levy deal and hoping to earn those last few seasons to make the deal a major market setter. From an APY perspective I would expect this deal to stand for some time as the chart topper and its up to David to make it last those last three seasons of the deal.