Cordy Glenn signed a five-year contract with the Bills that replaces his franchise tag and is reportedly worth a stated value of $36,000,000, of which $36 million is guaranteed at the time of signing. The Expected Contract Value of the deal is $52,362,561 (87% of the stated value):
|Stated Value: $60,000,000|
|Year||Salary||Expected Outcome||Expected Value||Guaranteed|
|Expected Contract Value:||$52,362,561 (87%)|
This is one of the most player-friendly contracts in the entire league, as is evidenced by the 87% of contract value that Glenn can expect to earn. Most players can expect to earn 65-75% of stated contract value, and very few long-term contracts result in Expected Contract Value greater than 80% of stated value. Not coincidentally, two of Glenn’s teammates – Marcel Dareus and Charles Clay – possess comparably player-friendly contracts.
Glenn’s impressive Expected Contract Value is primarily driven by three factors. First, Glenn will still be 26 at the beginning of the 2016 season, which means that even the final season of the contract will come at an age when an offensive lineman is reasonably likely to remain productive. Second, the contract is not backloaded as many large contracts are, which means the 2019 and 2020 contract amounts are generally in line with the valuation of the contract and therefore represent reasonable compensation if Glenn remains healthy and productive.
Third, and most importantly, most of Glenn’s base salary in 2018 is fully guaranteed. I mentioned in my analysis of Terron Armstead’s contract that no 2016 free agents were able to secure guaranteed 2018 salaries. It is therefore curious as to how Glenn was able to obtain a largely guaranteed third contract season, given that he has less leverage than the unrestricted free agents did.
If the Bills allowed Glenn to play the 2016 season under the franchise tag, and then attempted to re-sign him in the 2017 offseason as an unrestricted free agent, it is likely that the team would only have to agree to guarantee two contract seasons in a new contract (i.e. 2017 and 2018). So instead of guaranteeing one contract season now (2016) and potentially two more contract seasons (2017-2018) next offseason – only if he remains healthy and plays well – the Bills took the risk on all three contract seasons (2016-2018) now, while paying Glenn $19 million for the 2016 season instead of $13.7 million under the franchise tag.
In exchange for this significant extra risk, the Bills obtained two things in return. First, the team secured Glenn’s services for 2017 and beyond without having to compete with other teams in free agency. Given the rate of increase in top-end contracts in recent years, this may result in savings over a three or four year period as compared to attempting to re-sign Glenn next year (assuming the market perceives Glenn to be as productive as the Bills do, and, again, offset by increased risk). Second, the Bills saved $7.5 million worth of cap space for 2016.
One cannot help but speculate that the latter benefit was the primary motivating factor for the Bills. The Bills have developed a habit of assuming unnecessary risk in order to manufacture maximum present-day cap space, such as when the team restructured LeSean McCoy’s risk-free contract after obtaining it via trade, or when the team agreed to include Accelerated Future Team Option Deadlines into the fourth season of Marcel Dareus’s extension, or when the team converted Charles Clay’s roster bonus into a signing bonus earlier this offseason. Assuming additional contractual risk will not necessarily lead to bad salary cap outcomes, but if these players do not remain healthy and productive and the team needs to move on in order to remain competitive, it will find itself with less salary cap resources to work with than other teams and will therefore have fewer and worse options.
This contract moves the Bills into 3rd place in the Commitment Index hierarchy, which means that the team has the third least amount of future salary cap spending capacity. Similarly, the team ranks 5th in 2017 True Cap Space commitments. An extension for Stephon Gilmore or Tyrod Taylor would likely push the Bills to the top position in Commitment Index. None of this means that the Bills will necessarily be in a bad salary cap position over the next few years, but due to the true cap commitments made to the contractual core of Dareus, Glenn, Clay, McCoy, and Hughes, the team will have limited flexibility to add to or change the roster without moving sideways by losing talent currently on the roster.
|Year||Cap Number||Probability||Dead Money||Probability||Expected Cap Number|
|Total:|| || || ||$53,895,900|
Expected Contract Value was created by Bryce Johnston and Nick Barton.
Bryce Johnston earned his Juris Doctor from Georgetown University Law Center in May 2014, and currently works as a corporate M&A associate in the New York City office of an AmLaw 50 law firm. Before becoming a contributor to overthecap.com, Bryce operated eaglescap.com for 10 NFL offseasons, appearing multiple times on 610 WIP Sports Radio in Philadelphia as an NFL salary cap expert. Bryce can be contacted via e-mail at firstname.lastname@example.org or via Twitter @NFLCapAnalytics.
Nick Barton is a junior at the McDonough School Business at Georgetown University. He is majoring in Finance and Operations and Information Management. Nick currently interns with an NFL team . His prior work experience includes interning with CollegeSplits and Dynamic Sports Solutions, and working as a research assistant for the Center of Applied Research of the Apostolate.